Chris White said that the lender was being unfairly punished for mistakes made by other organisations.
Hinckley & Rugby has paid £357,000 to the compensation scheme this year, a sharp increase on the £175,000 levy it paid in 2012.
The mutual said that the FSCS should take into account its low risk approach to lending before deciding what fees to charge. Hinckley & Rugby has paid £1.15m to the FSCS in the past five years, something the organisation said could have funded a discount of 25 basis points on all its mortgage products.
White said: “The scale of our mandatory contributions to a scheme that mops up after other bodies’ mistakes is staggering. Our relative share of this enormous bill bears no relation to the relative risk to our savers.
“We support the existence of the FSCS safety net, which gives welcome confidence to savers, but we argue that the share of the burden our customers shoulder is completely out of kilter with the nature of our activities.”
He then called on the government to make banks and bigger lending institutions foot a larger share of the bill.
“Hinckley & Rugby is paying huge sums whilst representing little of the risk. Our mortgage arrears are £22,000 from a mortgage book of £442million.
“Whilst banks come under fire for the inadequacy of their capital base, we could double the size of our balance sheet and still be compliant with the rules.
“We are calling on the government to level the playing field and make the big banks take a bigger, fairer slice of the bill.”
