During the Civil War, Congress passed the National Bank Act, which provided for the organization and operation of banks under federal law. The Act created the office of Comptroller of the Currency. This title is really a misnomer, for the function of this officer is not so much the regulation of currency issues as the supervision of banking operations. His monetary duties are confined merely to routine matters relating to the issuing and redemption of notes circulated by national and Federal Reserve banks, while, on the other hand, he exercises extensive control over banks, for he possesses the sole right to authorize their organization, and even to close them if conditions warrant such action. He requires them to submit periodic reports concerning their financial condition, and he conducts examinations of their resources and liabilities.

The states also exercise supervision over banks organized under local laws. A few exert control over banks through boards composed of several state officials, and the function of examination is delegated to the same department which investigates other financial institutions, such as insurance companies. It is more customary to confer the supervision upon a single officer known as commissioner or superintendent, and to conduct a separate department concerned exclusively with the supervision of banks located within the state.