State bank

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State bank

A bank authorized in a specific state by a state-based charter, with generally the same functions as a national bank.

State Bank

In the United States, a bank that has received its charter from a state government rather than the federal government. A state bank has the option of whether or not to become a member bank in the Federal Reserve System. If it elects to become a member, there is no real difference between a state bank and a federal bank, except that the state bank generally does business only within a state. If it does not become a member, it is regulated only by the state in which it is based. See also: Nonmember Bank.
References in periodicals archive ?
The activities of state banks are further regulated at the federal level--by the Federal Deposit Insurance Corporation (FDIC), in the case of insured state nonmember banks, and by the Board, in the case of state banks that are members of the Federal Reserve System.
The framework in place for regulating and supervising state banks ensures that the federal interest is taken into account.
In granting applications by state banks to become members of the Federal Reserve System, the Board takes into consideration whether the conduct of certain activities directly by banks could have a seriously adverse effect on the safety and soundness of the institution and on the nation's banking system.
The OCC's actions have disrupted the competitive balance between national banks, state banks and nondepository institutions that compete with banks.
NAR is also concerned the petition will open the door to state banks becoming involved in commercial activities.

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