At the end of 2025, the banks that belong to the Federal Reserve System had paid in $39.2 billion for stock in its twelve regional Federal Reserve Banks. The law makes buying that stock a condition of membership.
The stock carries few of the rights of ordinary shares. It cannot be sold. Its dividend is capped. The Fed's profits go to the US government instead. Here is who owns the Federal Reserve, who controls it and where its money goes.
Who owns the Federal Reserve? No one owns the Federal Reserve as a whole, the Fed says. Its Board of Governors is a federal agency. Each of the twelve regional Reserve Banks issues stock, which banks that join the System, called member banks, must buy by law.
Member banks earn a capped dividend on the stock they have paid for. Banks with $12.8 billion of assets or less get 6% a year. Larger banks get the 10-year US Treasury note yield, capped at 6%.
After costs and dividends, the Reserve Banks paid their profits to the US Treasury: $1.37 trillion from 2000 to 2022.
From September 2022, the Fed's costs ran above its income. Each Reserve Bank records its own shortfall as a "deferred asset", to be earned back before its payments to the Treasury resume. Across all twelve, the total peaked in January 2026 and stood at $233.1 billion on 30 September 2026.
Who created the Federal Reserve?
Congress created the Federal Reserve with the Federal Reserve Act. President Woodrow Wilson signed it on 23 December 1913. The Act set up a central bank in three parts, as we explain in What Does the Fed Do?:
The Board of Governors in Washington, D.C.
Twelve regional Federal Reserve Banks, each serving one area of the country.
The Federal Open Market Committee (FOMC), which sets interest rates.
The Fed calls the result "a blend of public and private characteristics".
Is the Federal Reserve a private company?
Each Reserve Bank is separately incorporated, with its own board of directors. Every national bank must be a member of the System, while a bank chartered by a state can choose to join. At the end of 2024, 1,366 of the 3,934 US commercial banks were members.
The Federal Reserve Act sets the terms. A member bank must subscribe for Reserve Bank stock equal to 6% of its own capital and surplus. That is the money its shareholders have put in, plus the profits it has kept. Only half is paid in. The Board of Governors can call for the rest. The shares "shall not be transferred or hypothecated", so they cannot be sold or pledged for a loan.
The Fed's answer is plain. "The Federal Reserve System is not 'owned' by anyone," its website says. Holding Reserve Bank stock "is quite different from owning stock in a private company". The Reserve Banks "are not operated for profit".
What member banks get: a capped dividend
Source: Federal Reserve; YX Insights
Chart 1 shows the dividends paid to member banks each year. Since a 2015 law, the rate depends on the bank's size:
Banks with total assets of $12.8 billion or less get 6% a year on their paid-in stock. The threshold rises each year with inflation.
Larger banks get the yield set at the last auction of the 10-year US Treasury note before the payment, capped at 6%.
That law is the Fixing America's Surface Transportation (FAST) Act of December 2015. Before it, every member bank got 6%. Dividends fell from $1.74 billion in 2015 to $0.71 billion in 2016. They hit $0.39 billion in 2020. That year, the 10-year note sold at auction at yields of 0.653% to 1.869%.
Since 2016, every 10-year note auction has set a yield below the 6% cap. The highest was 4.834%, on 9 September 2026. In 2025, the Reserve Banks paid $1.69 billion of dividends. That was about 4.4% of the average stock paid in during the year.
Who controls the Federal Reserve?
Member banks vote for most of each Reserve Bank's board. Control of policy sits elsewhere:
The Board of Governors. Its seven members are appointed by the President and confirmed by the Senate, for terms of 14 years. Kevin Warsh has been Chair since 22 May 2026. The Fed calls the Board "an agency of the federal government".
Reserve Bank boards. Each has nine directors. Member banks elect six of them: three to represent the banks and three to represent the public. The Board of Governors appoints the other three. Those three, with the three elected public directors, choose the Reserve Bank's president, subject to the Board's approval.
The FOMC. The seven governors and five Reserve Bank presidents vote on interest rates. We explain how in How the Fed Sets Rates.
Congress sets the Fed's goals. The Board reports to Congress. Its decisions on how to reach those goals "do not require approval by the President or anyone else in the executive or legislative branches of government", the Fed says.
Where the Fed's profits go: payments to the Treasury
The Federal Reserve and the Treasury are separate bodies. The Treasury is a department of the executive branch. It collects taxes, pays the government's bills and borrows. The Fed is the central bank. Congress does not fund it.
The Fed's income comes mainly from interest on the bonds it owns. The law sets the order of payment. First come the Reserve Banks' costs, then the member dividends. The Reserve Banks also keep a reserve of retained profit, called their surplus, capped at $6.785 billion. Everything left over goes to the Treasury.
Each Reserve Bank does this sum for itself. When a bank's costs exceed its income, it pays nothing. It records the shortfall as a deferred asset: the amount it must earn back before its payments resume.
Source: Federal Reserve; YX Insights
Chart 2 shows the payments each year, net of any rise in the deferred asset. In 2023 to 2025, the deferred asset grew, so those bars fall below zero, in orange.
Payments rose from $25.3 billion in 2000. They grew fastest after 2008, as Quantitative Easing (QE) filled the Fed's balance sheet with interest-paying bonds. We cover QE in What Is Quantitative Easing? Payments peaked at $117.1 billion in 2015. That included a one-off $19.3 billion from the Reserve Banks' surplus, required by the FAST Act. From 2000 to 2022, the Reserve Banks paid the Treasury $1.37 trillion.
In 2025, the Reserve Banks that still earned more than their costs paid $6.3 billion, mostly from the Atlanta Fed. The shortfall at the others grew by $27.5 billion. So the net figure was −$21.2 billion.
Why the Fed ran a loss: the deferred asset
The loss came from interest. In 2025, the Reserve Banks earned $155.3 billion in interest, but paid out $167.4 billion. Of that, $147.7 billion was paid on reserves and other deposits held at the Fed. Reserves are the money banks keep there, which earns the Interest on Reserve Balances rate. Reverse repos, the Fed's overnight borrowing of cash, cost $19.7 billion.
Source: FRED (RESPPLLOPNWW); YX Insights
Chart 3 shows the total deferred asset across the twelve banks each week. It began on 7 September 2022 and peaked at $245.9 billion on 28 January 2026. It has fallen in 28 of the 35 weeks since, because income has mostly run above costs again. On 30 September 2026, it stood at $233.1 billion.
The Fed says a deferred asset "has no implications for the Federal Reserve's conduct of monetary policy or its ability to meet its financial obligations". The cost falls on the Treasury, which receives nothing from a Reserve Bank until its shortfall is made up.
How to check a claim about who owns the Fed
A few checks help:
Follow the money. The Reserve Banks' accounts are independently audited and published every year, with the payments to the Treasury in them.
Watch the deferred asset. It appears each week in the Fed's balance sheet release, called H.4.1, usually on Thursday. Each Reserve Bank resumes payments once its own shortfall is earned back.
The Federal Reserve has no owner in the usual sense. Member banks hold Reserve Bank stock by law, for a capped dividend. A federal agency, the Board of Governors, leads the System. The Reserve Banks' profits go to the US Treasury, once their recent losses are earned back.
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