The U.S. Treasury Department yesterday released a term sheet detailing the requirements for private banks that wish to participate in the Capital Purchase program, a piece of the $700 billion financial rescue package approved by Congress in September. As with publicly traded banks that have already signed on to the plan, the new terms will allow private banks to issue preferred stock in exchange for at least 1 percent and up to 3 percent of their Tier 1 capital.

Several private banks in Greater Des Moines have said they would consider participating once they received additional information about the program. Program details for subchapter S banks are still forthcoming, according to the Treasury Department.

Under the new guidelines, private banks that receive capital infusion investments of $50 million or less will not be required to issue warrants for the purchase of additional preferred stock. The deadline for private banks to apply is Dec. 8.

By the end of October, nine major financial institutions, including Wells Fargo & Co., had signed on to receive the first $125 million of the $250 million program. West Bancorporation Inc., in West Des Moines, parent of West Bank, is among the smaller publicly traded banks that have applied.

More than $33 billion was awarded by the Treasury Department to another 21 banks in a second round of payments from the $700 billion bailout fund, the Associated Press reported. The department also announced that another 3,800 banks, classified as C-Corp institutions for the part of the tax code that applies to them, can apply for funds by Dec. 8.

Another 2,500 S-Corp institutions also will be able to apply for funding, but a deadline for their applications has not been set. The largest government stock purchase in this latest round was $6.6 billion paid to U.S. Bancorp.

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