If you're a banker upset because credit unions don't pay federal taxes, brace yourself. It turns out that for at least 50 years the Federal Deposit Insurance Corp. has used an undetermined portion of your deposit insurance premiums to give office space and utilities to the FDIC Federal Credit Union.

Banks are subsidizing a credit union? You heard right.

And it's not just the FDIC, either. The Federal Reserve Board, which earns interest on the sterile reserves that it collects from banks, has an employee credit union, too.

An Accounting Sought

In addition to free space, the Fed gives its credit union free utilities and free computer time.

At the request of Harold Stones, executive vice president of the Kansas Bankers Association, the FDIC is trying to determine exactly how much it has spent housing its $45 million-asset credit union.

"We think it is terribly unfair," Mr. Stones said last week. "But it goes far beyond unfair. What it goes to is a fiduciary responsibility the FDIC has to preserve the fund in all ways possible."

After learning last summer that the federal government gives employee credit unions free office space, Mr. Stones asked FDIC Chairman William Taylor whether his agency does the same.

"Yes," came the reply from the FDIC's top accountant, Stanley J. Poling, in a July 15 letter. "You are correct in the assumption that space and utility expenses of the FDIC Federal Credit Union have been charged to the Bank Insurance Fund for over 50 years."

As you may have guessed, Mr. Stones and his colleagues were anything but amused.

"Next to the tax exemption, the biggest advantage credit unions have is rent-free space," said Ed Yingling, head lobbyist for the American Bankers Association. "When it's in our own agencies, it really is sticking it in our eye."

Mr. Taylor said in an interview last week that his agency's senior policy committee was reviewing the issue.

But he hinted that the FDIC Federal Credit Union's future is secure. "My impression is, it's a pretty small space," he said. "Not a lot of lavish support is given."

Regardless of the total cost, it's the disregard for principle that galls Mr. Stones.

"It is not a big thing; it is a small thing when you consider the billions of dollars we're dealing with here," he said. "But life's perceptions are built on small things."

Mr. Stones is confident that Mr. Taylor will understand that and force the FDIC credit union to pay rent and utilities bills. He may be right. The Fed's credit union, which has its office near the employees' squash courts, will lose free computer access.

"That is being phased out," Fed spokesman Joe Coyne said last week.

Benefits for Agency Cited

The in-house credit union is a convenient way to distribute FDIC salaries, Mr. Taylor said. Mr. Poling added that the credit union offers an easy way for FDIC employees to comply with laws that restrict borrowing from institutions an FDIC employee regulates.

Mr. Taylor stressed that he does not have an account at the FDIC credit union. He is, however, a customer of the credit union at the Fed, where he worked for 20 years before taking the helm at the FDIC.

"I wonder if that's like smoking marijuana but not inhaling," quipped Mr. Stones.

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