Certified Financial Management Specialist Practice Exam

Which agency regulates state-chartered banks in the U.S.?

1. Federal Reserve System

2. Consumer Financial Protection Bureau

3. Office of the Comptroller of the Currency

4. National Credit Union Administration

The correct answer is: Consumer Financial Protection Bureau

The agency that effectively regulates state-chartered banks in the U.S. is the Federal Reserve System. State-chartered banks can choose to be members of the Federal Reserve System and, if they do so, they are subject to the regulations imposed by this central banking authority. The Federal Reserve oversees monetary policy, supervises its member banks, and provides certain banking services, which includes ensuring the stability and efficiency of the banking system. While the Consumer Financial Protection Bureau focuses primarily on consumer protection in financial products and services, it does not serve as the primary regulatory body for state-chartered banks. Instead, those banks might be regulated by state banking authorities or the Federal Reserve if they are members. Other agencies mentioned serve different functions; the Office of the Comptroller of the Currency primarily oversees national banks and federal thrifts while the National Credit Union Administration regulates federal credit unions. Hence, the Federal Reserve System is the correct choice for overseeing state-chartered banks' regulatory aspects when they opt into the Federal Reserve System.