There are 30,291 commercial banks operating in the United States.
Chart of the number of commercial banks operating in the United States in 1920
This year marks the beginning of a decade of hundreds of bank suspensions per year. During 1921, there are about 500 bank suspensions. The majority of suspensions occur in the midwestern and southern agricultural areas of the United States.
Animated map of where commercial bank suspensions occured in the United States, 1921-1929
February 25, 1927
The McFadden-Pepper Act is signed into law by President Calvin Coolidge.
The law removed a competitive disadvantage for national banks by allowing them to establish and operate branches, with some limitations, in their home city in a state insofar as that state allowed state-chartered banks to operate branches. Up to this point, national banks had not been permitted to engage in branch banking. (They could have additional offices in the city in which they were located, but such offices could only accept deposits and pay out funds, and state banks that operated branches and converted to national banks were allowed to retain them). State laws on branch banking varied, with some prohibiting it and others allowing to differing degrees. Unfettered state-wide branching was relatively rare, but by the mid-1920s about 40 percent of states permitted some form of branching. The McFadden Act implicitly prohibited interstate branching by national banks as it allowed a national bank to branch only in the state where it was located. Nationwide interstate branching would not be enacted until 1994.
The law also significantly changed the National Bank Act. For example, new national banks could open with, in certain circumstances, reduced capital amounts. National banks also were authorized to deal in investment securities with some limitations and were permitted to make certain types of mortgage loans.
The Federal Reserve Act had chartered the Federal Reserve Banks for 20 years. The McFadden Act re-chartered them in perpetuity, eliminating the possibility that those charters might lapse, as had been the case with the First and Second Banks of the United States during the nineteenth century.
https://www.federalreservehistory.org/essays/mcfadden-act
https://www.frbsf.org/economic-research/files/el83-33.pdf
During 1927, there are approximately 670 bank suspensions.
October 28, 1929
Stock Market Crash
After nearly a decade of extraordinary stock market gains during the 1920s, the stock market crashed. On Monday, October 28, the market dropped about 13 percent. The next day, it dropped about an additional 12 percent.
https://www.federalreservehistory.org/essays/stock-market-crash-of-1929
1929
During 1929, there are about 650 bank suspensions.
Animated map of where commercial bank suspensions occured in the United States, 1921-1929