A survey by the Special Inspector General for Treasury found that more than 80% of US banks that received federal bailout funds said that the money was used in part to increase lending--or if not that, then to avoid cutting back on corporate and commercial lending. Of more immediate impact to the commercial real estate industry, one-third of banks surveyed said they used some of the funds to buy mortgage-backed securities issued by Fannie Mae and Freddie Mac. Another 40% said they used the funds to build up capital in anticipation of unexpected losses in this recession.

Unfortunately, it is the latter category--the banks applying the federal funds to their own balance sheets--that have captured the ire of the public and Congress, says one broker who did not wish to be quoted by name about this program. More than TALF--the Term Asset Lending Facility to buy up asset-backed securities--TARP has become a dirty word on Main Street and in Congress--something that Wall Street is well aware of, this person said.

Still, though, the survey makes clear that banks expanding their lending activities through TARP are in the minority. About 29% claimed to use TARP funds for residential loans, 18% for commercial mortgages and 17% for consumer loans, such as auto loans and personal lines of credit.