Interstate Branching

The passage of the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 will usher in an era of widespread branch banking, changing the landscape and structure of the banking industry throughout the United States. Banks already are beginning to restructure to take advantage of the efficiencies of the act. Widespread branching networks, as well as regional networks supported by affiliated bank relationships, can be expected.

Anticipating these changes, the Federal Reserve has designed a new approach to providing accounting services and a new reserve account structure. To meet the needs of depository institutions for the convenience of consolidated account management as well as the flexibility of multiple accounts, the Federal Reserve has proposed that each depository institution hold a single master account, which would be the view of the institution’s actual credit and debit position vis-à-vis the Fed, with optional informational subaccounts.

The new account structure was developed in response to input from depository institutions about their needs and after assessment of the Federal Reserve’s current account structure. The new account structure, with new accounting information services, will be implemented on January 1, 1998. In addition, the Federal Reserve will support special transitional arrangements as institutions undergo organizational changes.
The following documents provide more information on the new account structure. As more information becomes available, these documents will be updated and supplemented.
Press Release: New Account Structure Will Support Interstate Branching
Interstate Branching: New Account Structure—Questions and Answers
Interstate Branching: Interviews with Depository Institutions
Regarding Federal Reserve Accounts (449K PDF)