Myth 2: The Fed isn't part of the US government
This myth is a bit similar to the last one, but it has a life of its own. For this one, we turned to David Wyss, former senior economist at the Federal Reserve Board.
"The Board of Governors of the Federal Reserve System is a government entity. The seven members (including the chairman) are appointed by the president with the advice and consent of the Senate, and report semiannually to Congress," Wyss says.
Where it gets a bit more complicated is with the 12 Fed district banks. Wyss says the district banks "are quasi-private and are legally owned by the member banks."
"Each district bank has a board of directors, with three appointed by the Board of Governors and six elected by the member banks in the district. Each member bank owns a share in its regional Fed, which pays a 6 percent dividend. All earnings above that percent go to the U.S. Treasury," he says. If you define the member banks in terms of where they pay their profits, they go straight into federal coffers.
By the way, the U.S. flag flies outside the Federal Reserve's headquarters in Washington, D.C.