" The Act setup operational standards for the banks, established minimum amounts of capital to be held by the banks, and defined how the banks were to make and administer loans. In addition, the Act imposed a 10 percent tax on state banknotes, thus effectively eliminating non-federal currency from circulation. .
The Federal Reserve Act of 1913 established the Federal Reserve System as the central banking authority of the United States. It was created by Congress on December 23, 1913, to provide the nation with a safer, more flexible, and more stable monetary and financial system.
Any bank using the phrase, "National Bank" in its name today must be a member of the Federal Reserve System. They must maintain minimum levels of reserves with one of the 12 Federal Reserve banks and must deposit a percentage of their customers' savings account and checking account deposits in a Federal Reserve bank. All banks incorporated under a national charter are required to become members of the Federal Reserve System. Banks incorporated under a state charter may apply for membership. .
Under the Federal Reserve Act of 1913 and amendments over the years, the Federal Reserve System: .
Conducts America's monetary policy. .
Supervises and regulates banks and protects consumers' credit rights. .
Maintains the stability of America's financial system .
Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions. .
The Federal Reserve makes loans to commercial banks and is authorized to issue the Federal Reserve notes that make up America's entire supply of paper money.
The seven members of the Board of Governors are appointed by the President and confirmed by the Senate to serve 14-year terms of office. Members may serve only one full term, but a member who has been appointed to complete an unexpired term may be reappointed to a full term. The President designates, and the Senate confirms, two members of the Board to be Chairman and Vice Chairman, for four-year terms.