The Treasury Department is working on a system for appointing board members to government-supported banks that have fallen behind on dividend payments to taxpayers.

Among the issues the Treasury is considering is the willingness of qualified private-sector individuals to serve as Treasury appointed directors of small struggling banks.

Unlike private investors, the Treasury cannot name its own employees to serve on bank boards, so it must turn to outside help.

"We are considering various options on how to properly exercise our contractual rights so to best protect the taxpayer's interests," Treasury spokesman Mark Paustenbach said.

The banks whose boards are in play are participants in the Troubled Asset Relief Program.

The banks received taxpayer loans under terms that require them to pay quarterly dividends.

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