have access to some of the same services as member banks, including borrowing privileges (Particularly since the Depository Institutions Deregulation and Monetary Control Act of 1980. Saint Phalle, 1985). In addition, nonmember banks are now subject to the same reserve requirements as member banks. Member banks benefit from access to the credit and clearing facilities provided by the system. But each must conform to minimum capital requirements and restrictions on loans and investment, adhere to reserve requirements established by the Federal Reserve, and submit to on-the-spot examination by federal authorities. Many smaller banks believe that the burdens of membership outweigh the benefits (Greider, 1987).
The Board of Governors consists of seven members appointed by the president of the United States and subject to senate confirmation (Kettle, 1986). They serve overlapping terms of 14 years and cannot be removed from office except for personal delinquencies. The president appoints a chairman from among the board members
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