'There were Hispanic, black and Chinese S & Ls—why not one for gays?

John Schmidt recalls the way it used to be when two men applied for a mortgage together: "The loan officer would look down his nose and say, 'Are you both going to live there?' " In the but-toned-down world of banking, as elsewhere, homosexuals were pariahs, routinely denied access to mortgage money simply because of their unorthodox living arrangements. Discrimination, though it is more subtle, still exists. But now comes a unique solution: the nation's first gay financial institution, Atlas Savings and Loan of San Francisco. "Here," says Schmidt, Atlas' founder and chairman, "gay couples will be treated the same as married couples."

Atlas looks like any other S & L, with sober gray walls and a funereal air (appropriate, since it is housed in a former mortuary), and Schmidt, in his gray three-piece suit, looks the typical banker. But the Castro district, which Atlas serves, is home to many of San Francisco's estimated 100,000 homosexuals.

Schmidt, 51, got the idea for Atlas in 1978, when he and fellow members of the gay Golden Gate Business Association realized that no financial institution was represented in their group. "There were Hispanic, black and Chinese savings and loans," says Schmidt. "Why not one for gays?" When Schmidt went to the Federal Home Loan Bank with a charter for a gay savings and loan, he notes, "Eyebrows were raised in Washington. They were probably saying, 'Only in San Francisco!' " Schmidt capitalized Atlas with $2 million from 2,000 stockholders—a record in the nation, where the average S&L has 400 to 500 initial investors. Since opening its doors last November, Atlas has acquired deposits of $2.3 million in 1,200 accounts—900 on the first day alone—from almost every state plus England, France, Japan and even Tahiti.

To run Atlas, Schmidt assembled 10 gay directors, eight men and two women, from San Francisco's financial community. He also hired Jerry Flanagan, who had successfully founded the nation's first Hispanic S&L in San Fernando, as president. Flanagan, 45, has been married for 20 years and is a grandfather. His colleagues jokingly refer to him as "the house straight." "This is a trailblazing kind of thing," Flanagan says. "I find it very exciting."

Schmidt spent most of his life concealing his homosexuality. The eldest son of a Chicago insurance investigator, he graduated from high school at 16 and attended the Illinois Institute of Technology. At 19, he enlisted in the Marines, and he was chosen as a presidential guard during the Eisenhower Administration. "There were many other gays in the Marine Corps, but we kept quiet about it," he says. "We had our own social group. It was a positive experience." Schmidt left the Marines to finish his education in math and chemistry at the University of California at Berkeley, then rejoined as an engineer. After his discharge in 1960 he went into the insurance business, eventually becoming regional vice-president of Mission Equities Corp. In 1970, with his sister, Ila, he started Schmidt and Schmidt Insurance, a $2 million-a-year Bay Area firm he still runs.

Since 1966 Schmidt has lived with a mental health counselor in San Francisco; together they own a country house in nearby Port Costa, where they can home-grown vegetables on weekends. By the mid-'70s Schmidt had become active in local gay politics and was quoted in an Associated Press story about homosexuals in politics and business. "Until then everyone suspected I was gay," he says, "but it was something we never talked about." His brother and two sisters saw the story and warned Schmidt, "If the folks see this, it's going to kill them." But Schmidt told his parents about his homosexuality and they accepted it. "I didn't lose one customer or one insurance company," he says. "Everyone could still look me in the eye and shake my hand. They didn't think I was going to contaminate them."

Schmidt tries to set an example for his fellow gays. "I don't wear dresses, I don't wear makeup and I don't hang out in bars," he declares. "The impression I want to leave with people is that not all gays are that way. Gay people pay taxes, support charities and hold good jobs. They are also," he adds, "good business."