In the United States, a state-chartered
bank that has opted not to join the
Federal Reserve System. Such banks are required to place a certain number of their accounts at a Federal Reserve Bank so as to meet
reserve requirements. However, nonmember banks allowed access to the Federal Reserve's
discount window are not required to purchase
stock in the Federal Reserve. In general, nonmember banks are less regulated than member banks. For example, they are allowed to keep at least a portion of their reserves in interest-bearing securities. They are subject only to the laws of the states in which they are chartered.