Now that three state-chartered banks have received nearly $42 million in federal funds, the Idaho Department of Finance has put out a news release telling everyone to stop calling the money a bailout.

The department is receiving an increasing number of questions and complaints about the U.S. Treasury’s Capital Purchase Program, and “most of them are based on misperceptions,” said Director Gavin Gee. The program is part of the government's Troubled Asset Relief Program, called TARP.

“The term ‘bailout’ does not apply to this program, and its use does a disservice to the banks that participate, and is misleading to the public,” Gee said.

Gee didn’t list the Idaho banks, but they are:

• Intermountain Community Bancorp, the Sandpoint holding company for Panhandle State Bank, which got $27 million.

• Syringa Bancorp, Boise, $8 million.

• Idaho Bancorp, Garden City, $6.9 million.

The list will probably get longer as 2009 advances.

The Treasury Department says money from the $250 billion program goes only to banks considered healthy.

The money comes with restrictions. Banks get it by selling preferred stock to the government. They must pay dividends of 5 percent a year on the money for the first five years and higher amounts thereafter.

Gee notes that the program’s goals are to restore confidence in the financial system and encourage banks to build capital to increase lending to businesses and consumers.

“Whether or not a bank participates in the CPP should not be interpreted by the public as
any indication of the bank’s condition,” Gee said.

(Business reporter Bill Roberts contributed.)