Banking regulators are government officials and agencies that set rules for banks, check whether banks follow those rules, and step in when a bank fails or breaks the law.

In the United States, banking regulation is split among several federal agencies and state banking departments. The Federal Reserve supervises large banks and bank holding companies. The Office of the Comptroller of the Currency (OCC), which sits inside the Treasury Department, charters and oversees national banks. The Federal Deposit Insurance Corporation (FDIC) insures deposits and regulates banks it insures. State banking regulators oversee state-chartered banks that operate within their borders. Each agency has overlapping authority, which means a single bank may answer to more than one regulator.

Regulators do not run banks or make decisions about who gets a loan. They set minimum standards for how banks must operate, how much capital banks must hold, what kinds of loans banks can make, and how banks must treat customers. When you have a problem with your bank—a fee you think is wrong, a loan you think was unfair, a deposit that went missing—you can complain to the regulator that oversees that bank, and the regulator will investigate.

Key Takeaways

  • The Federal Reserve, OCC, and FDIC are the three main federal banking regulators, and they divide supervision of different types of banks.
  • State banking departments regulate banks chartered under state law, and some banks answer to both state and federal regulators.
  • Regulators set rules about capital, lending, customer treatment, and data security, but they do not run day-to-day bank operations.
  • If you have a complaint about your bank, you can file it with the regulator that oversees that bank, and the regulator will investigate at no cost to you.
  • When a bank fails, the FDIC takes over and protects deposits up to $250,000 per account holder per bank.

The Federal Reserve and its role in banking

The Federal Reserve is the central bank of the United States. It sets interest rates, manages the money supply, and supervises large banks and bank holding companies—firms that own one or more banks. The Federal Reserve has 12 regional banks across the country, each overseeing banks in its district. If you bank at a large institution like JPMorgan Chase, Bank of America, or Wells Fargo, the Federal Reserve is one of your bank's regulators.

The Federal Reserve does not insure deposits or take over failing banks. It focuses on whether banks are stable enough to survive a financial crisis, whether they have enough capital to absorb losses, and whether they are following federal law. The Federal Reserve also sets rules about how much interest banks can pay on certain accounts and what fees banks can charge for overdrafts.

The Office of the Comptroller of the Currency

The OCC is a bureau of the U.S. Treasury Department that charters and regulates national banks—banks whose names usually include the word "National" or whose charter comes from the federal government rather than a state. The OCC examines national banks to make sure they follow federal banking law, have enough capital, and are not taking on too much risk.

The OCC also handles consumer complaints about national banks. If you have a problem with a national bank and the bank does not resolve it, you can file a complaint with the OCC. The OCC will investigate and can order the bank to refund money, change its practices, or pay a fine. You do not pay to file a complaint.

The Federal Deposit Insurance Corporation

The FDIC insures deposits at member banks up to $250,000 per depositor per bank. This means if your bank fails, the FDIC will pay you back up to $250,000 of your deposits, even if the bank has no money left. The FDIC also regulates banks it insures and examines them to make sure they are following the rules.

When a bank fails, the FDIC takes over the bank's operations, sells its assets, and pays off its debts. The FDIC tries to find another bank to take over the failed bank's deposits and branches so customers can keep banking without interruption. If no bank will take over, the FDIC pays depositors directly. The FDIC has a fund built from fees that banks pay; it does not use taxpayer money to insure deposits.

State banking regulators and dual regulation

Every state has a banking department or division that charters and regulates state banks—banks whose charter comes from the state rather than the federal government. State regulators set rules about what state banks can do, examine them for safety and soundness, and handle consumer complaints. A state bank may also be insured by the FDIC, which means it answers to both its state regulator and the FDIC.

This system is called dual regulation. A state-chartered bank that is FDIC-insured must follow both state banking law and federal banking law. It may be examined by its state regulator, the FDIC, and sometimes the Federal Reserve. The regulators coordinate to avoid duplicating work, but the bank must meet the standards of all of them.

What regulators actually check during an examination

Banking regulators send examiners into banks to check whether the bank is following the rules. Examiners look at the bank's capital—the money the bank has set aside to cover losses. They review a sample of loans to make sure the bank is lending fairly and not taking on too much risk. They check whether the bank has systems in place to prevent money laundering and terrorist financing. They verify that the bank is protecting customer data and following privacy laws.

Examiners also look at whether the bank is treating customers fairly. They check whether the bank is charging fees it disclosed, whether it is following rules about overdraft protection, and whether it is handling complaints from customers. If an examiner finds a problem, the regulator will order the bank to fix it. If the bank does not fix it, the regulator can fine the bank, remove its leaders, or take away its charter.

How to file a complaint about your bank

If your bank has treated you unfairly—charged a fee you did not authorize, refused to refund a fraudulent charge, closed your account without explanation, or violated a promise about interest rates—you can file a complaint with the regulator that oversees your bank. First, try to resolve the problem with the bank itself. Contact the bank's customer service or file a complaint through the bank's website or by mail.

If the bank does not resolve it within a reasonable time, you can file a complaint with the regulator. To find out which regulator oversees your bank, go to the FDIC's Bank Find tool at banks.fdic.gov and search for your bank by name. The result will tell you whether the bank is national, state-chartered, and FDIC-insured. Then contact the appropriate regulator: the OCC for national banks, your state banking department for state banks, or the FDIC for any FDIC-insured bank. You can file a complaint online, by mail, or by phone. There is no cost, and you do not need a lawyer.

Frequently Asked Questions

What happens if my bank fails?

The FDIC takes over the bank and protects your deposits up to $250,000 per account holder per bank. If you have more than $250,000 at the bank, the amount over $250,000 is at risk. The FDIC usually transfers your account to another bank within one or two business days, so you can keep using your debit card and accessing your money.

Can a regulator force my bank to give me money back?

Yes. If you file a complaint and the regulator finds that the bank violated the law or broke its own rules, the regulator can order the bank to refund the money, pay you damages, or both. The regulator can also fine the bank. However, the regulator will investigate only if you file a complaint first.

Do all banks have the same regulator?

No. National banks answer to the OCC. State banks answer to their state regulator and may also answer to the FDIC and Federal Reserve. Large banks answer to the Federal Reserve. Credit unions are regulated by the National Credit Union Administration, not by banking regulators. To find your bank's regulator, use the FDIC's Bank Find tool.

Can regulators prevent a bank from charging a fee?

Regulators cannot set the fees banks charge, but they can require banks to disclose fees clearly and can stop banks from charging fees they did not tell you about. If your bank charged a fee that was not in the account agreement or that the bank did not disclose, you can complain to the regulator and ask for a refund.

What is the difference between a bank regulator and a bank?

A bank is a business that takes deposits, makes loans, and provides other financial services. A regulator is a government agency that sets rules for banks and makes sure banks follow those rules. Regulators do not run banks or make lending decisions. They oversee banks to protect depositors and keep the financial system stable.