WASHINGTON — The Treasury Department issued long-awaited term sheets Tuesday detailing how mutual holding companies may apply for Troubled Asset Relief Program funds, giving them until May 9 to seek government capital.

Industry representatives have been awaiting details on how the Capital Purchase Program would apply to mutuals, but the term sheets appear to leave many out in the cold.

Though the Treasury documents would cover several types of mutual holding companies, they do not include information on mutual thrifts without a holding company. It is unclear if those mutuals, which outnumber mutual holding companies almost 4 to 1, can apply for Tarp capital. As of last year there were 143 mutual holding companies, compared with 555 mutual thrifts without a holding company.

"The various term sheets seem to contemplate where you have a situation where you would have some kind of a parent company over a depository institution," said V. Gerard Comizio, a partner at the corporate department at Paul, Hastings, Janofsky & Walker LLP. "My question is are they suggesting that institutions need to form some kind of a parent company before they are eligible for this program?"

A Treasury spokesman did not comment by deadline.

Industry representatives said they were concerned by the lack of term sheets for mutual thrifts.

"Its disappointing after all this time they are doing mutuals piecemeal," said Robert Davis, executive vice president of government relations for the American Bankers Association. "We're looking forward for term sheets to be made available for mutuals that aren't in a holding company structure. We don't believe it's that complicated to have a structure for all mutuals."

But some were at least grateful they had any details at all.

"It's great they have finally put a term sheet out for mutual holding companies," said Chris Cole, regulatory counsel at the Independent Community Bankers of America. "Up to now the mutual holding companies felt they were left out of the process."

Other companies were forced to give warrants for stock to apply for funds last year, but how to give capital to mutuals has been a hurdle, since some such institutions do not issue stock.

To get around that problem, the Treasury said mutual holding companies that are not subsidiaries would issue senior debt equal to no more than 1% to 3% of risk-weighted assets to the department.

Comizio said using debt instruments makes sense. "They face a conceptual hurdle since mutuals don't issue equity and that's been the basis of the CPP program."

The Treasury released three term sheets for different types of mutual holding companies: publicly traded subsidiary holding companies, privately held subsidiary holding companies and mutual holding companies that do not have subsidiary holding companies. All three types would be subject to dividend restrictions, warrant issuance and executive compensation limits. For executive compensation standards, the Treasury said the mutuals must follow standards "as published and in effect at the time of the investment closing."

The Office of Thrift Supervision said 78 mutual thrifts and mutual holding companies have applied for Tarp funds. The Treasury said those applicants do not need to apply again.

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