The Federal Reserve Banks have an intermediate legal status, with some features of private corporations and some features of public federal agencies. The United States has an interest in the Federal Reserve Banks as tax-exempt federally created instrumentalities whose profits belong to the federal government, but this interest is not proprietary.[76]

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"The Reserve Banks are "not" Federal instrumentalities... but are

" Independent, "Privately Owned" and Locally Controlled " CORPORATIONS "

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In Lewis v. United States,[77] the United States Court of Appeals for the Ninth Circuit stated that:

"The Reserve Banks are not federal instrumentalities for purposes of the FTCA [the Federal Tort Claims Act], but are

" Independent, "Privately Owned" and Locally Controlled " CORPORATIONS "

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The opinion went on to say, however, that: "The Reserve Banks have properly been held to be federal instrumentalities for some purposes." Another relevant decision is Scott v. Federal Reserve Bank of Kansas City,[76] in which the distinction is made between Federal Reserve Banks, which are federally created instrumentalities, and the Board of Governors, which is a federal agency.

Regarding the structural relationship between the twelve Federal Reserve banks and the various commercial (member) banks, political science professor Michael D. Reagan has written that:[78]

... the "ownership" of the Reserve Banks by the commercial banks is symbolic; they do not exercise the proprietary control associated with the concept of ownership nor share, beyond the statutory dividend, in Reserve Bank "profits." ... Bank ownership and election at the base are therefore devoid of substantive significance, despite the superficial appearance of private bank control that the formal arrangement creates.