You may have seen or heard the term “dual banking system.” This refers to the fact that both state and federal governments issue bank charters for the need and convenience of their citizens. The Office of the Comptroller of the Currency (OCC) charters national banks; the state banking departments charter state banks. “National” or “state” in a bank’s name has nothing to do with where it operates; it refers to the kind of charter the bank has.
Chartering agencies ensure that new banks have the necessary capital and management expertise to meet the public’s financial needs. The charterer is an institution’s primary regulator, with front-line duty to protect the public from unsafe and unsound banking practices. Charterers conduct on-site examinations to assess bank condition and monitor compliance with banking laws. They issue regulations, take enforcement actions, and close banks if they fail.
The Comptroller ofthe Currency supervises approximately 3,191 national banks. State bank supervisors oversee about 7,524 commercial banks.