VAPDC Winter Conference Activities on Friday, February 12, 2016
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Federal Reserve System
On December 23, 1913, the Federal Reserve System, which serves as the nation's central bank, was created by an act of Congress. The System consists of a seven member Board of Governors with headquarters in Washington, D.C., and twelve regional Banks located in major cities throughout the United States, which divide the nation into 12 districts, acting as fiscal agents for the U.S. Treasury. The twelve banks are located in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco, and St. Louis.
The Board of Governors of the Federal Reserve System
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. The President designates, and the Senate confirms, two members of the Board to be Chairman and Vice Chairman, for four-year terms. Only one member of the Board may be selected from any one of the twelve Federal Reserve Districts. In making appointments, the President is directed by law to select a "fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country." These aspects of selection are intended to ensure representation of regional interests and the interests of various sectors of the public. The primary responsibility of the Board members is the formulation of monetary policy.
In addition to monetary policy responsibilities, the Federal Reserve Board has regulatory and supervisory responsibilities over banks that are members of the System, bank holding companies, international banking facilities in the United States, Edge Act and agreement corporations, foreign activities of member banks, and the U.S. activities of foreign-owned banks. In addition, the Board plays a key role in assuring the smooth functioning and continued development of the nation's vast payments system.
Another area of Board responsibility is the development and administration of regulations that implement major federal laws governing consumer credit such as the Truth in Lending Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act and the Truth in Savings Act.
Richmond Fed History
The Richmond Fed was organized in May 1914, following the enactment of the Federal Reserve Act in December 1913 and after the completion of a process to select host cities for Reserve Banks.
Following the enactment of the Federal Reserve Act in December 1913, nearly 40 cities competed to become a Fed location. George Seay, a prominent banker who would become the Richmond Fedâ€™s first governor (president), spearheaded the effort to bring the Bank to Richmond. He and other supporters pointed to Richmond's geographic location, its importance as a commercial and financial center, and its transportation and communications facilities, as well as Virginia's leading regional role in the banking business.
The Richmond Fed serves the Fifth Federal Reserve District, which includes Maryland, North Carolina, South Carolina, Washington, D.C., and most of West Virginia.
The Bank's headquarters has had three locations in downtown Richmond, starting in offices near the federal courts in 1914. In 1921, the Bank moved to a new headquarters building on the city's historic Capitol Square. The current headquarters building, overlooking the James River, opened in 1978. The Richmond Fed has had offices in Baltimore since 1918 and in Charlotte, N.C., since 1927. The Bank formerly had operations in Charleston, WV; Columbia, SC; and Culpeper, VA.
Since its founding, the Richmond Fed has had seven chief executives, starting with George Seay, who in addition to campaigning for Richmond played a key role in many early policy decisions. He served as governor from 1914 until 1936. Following Seay, the presidents of the Richmond Fed were Hugh Leach, Edward A. Wayne, Aubrey N. Heflin, Robert P. Black and J. Alfred Broaddus Jr. The Bank's current president is Jeffrey M. Lacker, who was appointed in 2004.