Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. 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 is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.
Are there significant political advantages for commercial banks to become members of the Federal Reserve System? What do you think they stand to gain from this affiliation, considering the regulatory oversight and responsibilities that come with it? This quote suggests that there's no economic advantage in becoming a Reserve Bank, but what would the political advantages be? If there's no economic advantages, then certainly there must be political advantages in becoming an owner of a Reserve Bank, which is a non-profit organization.