The US has one of the most highly regulated banking industries in the world. However, the accent of the regulations is on privacy, disclosure norms, fraud prevention, anti terrorism measures, drive against money laundering, priority credit to lower income segments and so on instead of financial soundness.
In the USA both federal and state laws regulate banking and bank accounts. Bank accounts may be opened at national and state chartered banks and associations.
Title 12 of the Code of Federal Regulations deal with banks and banking sector.
Articles 4A, 5 and 8 of the Uniform Commercial Code deal with letter of credit, fund transfer and securities. Article 3 of the said Uniform Commercial Code deal with relationship between the giver and receiver of checks.
Article 4 of the Uniform Commercial Code, which has been adopted at least in part in every state, governs the relationship between depository, collecting and payer banks for checks and negotiable instruments. It also regulates documentary drafts or credit instruments, which will be honored only on presentation of specified papers such as transportation documents, invoices etc to the payer or his nominee.
Article 3 of the Uniform Commercial Code regulates certificates of deposits, which are in fact a form of negotiable instruments.
The bank failures during the great depression in 1930’s led to the setting up of the Federal Deposit Insurance Corporation. There is insurance cover on bank deposits funded from the premiums paid by member institutions for protection of the bank depositor.
