Under the Federal Reserve Act of 1913, is the Federal Reserve a private corporation owned by its member banks?

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False. Congress created the Federal Reserve System in the Federal Reserve Act of 1913 to serve public purposes, not private profit. While Section 9 of the Act requires nationally chartered and member state banks to subscribe to capital stock in their regional Reserve Banks and entitles them to a fixed 6% annual dividend, that stock is non-transferable, carries no control rights over policy, and cannot be used as collateral (Federal Reserve Act, Section 9; Fed FAQ: Who owns the Federal Reserve? - Federal Reserve Board)). The Board of Governors is an agency of the federal government whose seven members are nominated by the President and confirmed by the Senate, and it reports directly to Congress (The Fed Explained: Who We Are - Federal Reserve Board)). After covering operating costs and statutory dividends, all remaining net income of the Reserve Banks is remitted to the U.S. Treasury under Section 7 of the Federal Reserve Act (Federal Reserve Board press release, Jan. 13, 2023)).

Under the Federal Reserve Act of 1913, is the Federal Reserve a private corporation owned by its member banks?

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