Rarely does a day go by when some House Republican doesn’t demand an end to Federal Reserve funding of the Consumer Financial Protection Bureau (CFPB). But you will never hear about the Fed’s direct subsidy to private banks that costs over three times as much as the total CFPB budget.

The subsidy comes in the form of a 6 percent dividend, paid on stock that over 2,900 banks purchase to participate in the Federal Reserve system. Very few places where ordinary Americans park their money offer such a risk-free benefit. In 2012 (the last year with available data), the Fed gave away $1.637 billion in dividends to banks, tax-free in the majority of cases. And the Fed has been doing this for the last 100 years. It’s one of the many unknown ways the Fed extends special benefits to Wall Street.

The dividends are one example of the strange manner in which the Fed is both a public and private entity. The Federal Reserve Board of Governors, the main policymaking body, is appointed by the President and confirmed by the Senate. But there are also twelve regional Federal Reserve Banks, whose presidents participate in the committee that sets monetary policy. These Reserve Banks operate as private corporations owned by member banks in their districts, even though they also regulate the same banks. Their websites have a .org, not a .gov, suffix.

As a condition of membership, regional banks must purchase “stock” in their local Federal Reserve Bank. But as the Fed notes, owning Reserve Bank stock bears little resemblance to owning stock in AT&T or General Motors. First, all nationally-chartered banks must join the Reserve system and purchase this stock. No public stock has ever been issued; the banks are the only shareholders. The stock has a set value that never changes, and banks cannot sell, trade, or pledge the stock as collateral. With the price constant, banks cannot lose money on the stock; even if a regional Federal Reserve Bank somehow disbanded, the government is required by law to pay out stockholders at face value. The stock purchase must equal 6 percent of the bank’s total capital and surplus; half gets paid in to the regional Reserve Bank, and the other half is on call. If the bank’s capital goes up they must purchase more stock, and if it falls they get a refund.

In some ways, the stock is a membership fee to fund the regional Reserve Banks’ activities. Only in this case, the stock pays a 6 percent dividend every year that the Federal Reserve makes money, as per Section 7 of the original Federal Reserve Act of 1913. The Fed’s numerous advantages as a market player means it almost always turn a profit, so in practice this is a large, lump-sum annual payment to the roughly 2,900 banks in the Federal Reserve system. Within 17 years, banks automatically earn back the total stock purchase in nominal dollars, making any future dividends pure profit. Banks like JPMorgan Chase, around since the founding of the Federal Reserve, have reaped this benefit for 100 years.