Regulations as to minimum reserves against deposits were, even in those states where such reserves are now required, very tardily made, Connecticut leading the way in 1872. The requirement is not yet regarded as important in many states where regulation is directed chiefly to matters affecting directly the safety of the individual bank. Recently most of the states have made some regulations as to reserves, differing among themselves as to amount, form, and enforcement of the requirement. Some states require the same amount of reserve for all classes of deposits, others require different amounts against the different classes; and still others require reserves only against demand deposits. In some states the reserve must be held in cash or bank balances, in others it may consist in whole or in part of securities. In nearly every state bank laws allow the redeposit of reserves only in banks inside the state, although in some states the law designates certain cities outside the state, such as New York, Chicago, etc., where reserves may be redeposited.
Branch banking has not developed greatly in any of the states. State banks, like national banks, are decentralized and locally owned. Certain states forbid the opening of branches; others do not provide for them; others definitely permit them. If they are permitted, additional capital for each branch and special authorization by the banking department are usually required. In some states, a bank, denied branches, may own stocks in other banks or trust companies. Until forbidden in 1908, New York trust companies operated state banks, trust companies, and national banks in this manner. Another method is the ownership by a person, a group of persons, or a holding company, of a controlling interest in several banks or trust companies. This is called "chain banking," and is devised often by promoters to finance their undertakings. This has been limited in some states by limitations of loans on stocks of "moneyed corporations" to 10 per cent of the capital of the corporations whose stock is thus offered as collateral.
Supervision over state banks by special bank commissions arose after 1887. Before that time the banks in certain states made annual reports to some state official. Practically every state now requires reports, and many require yearly several reports of various kinds. The reports are made at the call of the bank supervisor, and are usually timed to agree with the calls of the Comptroller of the Currency. Regular bank examinations started in the New England states, and most states now provide for one or more regular examinations each year as well as special examinations of particular banks. The cost is usually assessed in whole or part on the examined bank. The states also tend to require regular bank examinations by the bank directors. The states put the execution of their banking law into the hands of a superintendent, or commissioner, of banks, whose powers and duties vary widely. Harmony of supervision and uniformity of law are being achieved through the National Association of the Supervisors of Banks. In general, the officials pass upon applications for charters, handle insolvent banks and violations of law, appoint receivers or liquidate failed banks, conduct examinations, call for and publish report, etc. The powers of the supervisors have grown gradually in number and extent.