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The 12 regional Federal Reserve Banks (not to be confused with the "member banks"), which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations—possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to "member banks." However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock by a "member bank" is, by law, a condition of membership in the system. The stock may not be sold or traded or pledged as security for a loan; dividends are, by law, limited to 6% per year.[2] The largest of the Reserve Banks, in terms of assets, is the Federal Reserve Bank of New York, which is responsible for the Second District covering the state of New York, the New York City region, Puerto Rico, and the U.S. Virgin Islands.
The dividends paid by the Federal Reserve Banks to member banks are considered partial compensation for the lack of interest paid on member banks' required reserves held at the Federal Reserve Banks. By law, banks in the United States must maintain fractional reserves, most of which are kept on account at the Fed. The Federal Reserve does not pay interest on these funds.
The basic structure of the Federal Reserve System includes:
* The Board of Governors
* The Federal Open Market Committee
* The Federal Reserve Banks
* The member banks.
Each Federal Reserve Bank and each member bank of the Federal Reserve System is subject to oversight by the Board of Governors (see generally 12 U.S.C. § 248). The 7 members of the board are appointed by the President and confirmed by the Senate.[8] Members are selected to terms of 14 years (unless removed by the President), with the ability to serve for no more than one term.[9] A governor may serve the remainder of another governor's term in addition to his or her own full term.
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http://en.wikipedia.org/wiki/Federal_reserve