It has been a big month for West Virginia's Centra Bank, whose executives have been interviewed in the New York Times, USA Today, the Wall Street Journal and on Fox News. On March 31, Centra became one of the first five banks to repay a TARP loan -- and it's mad as hell about the terms. The way Centra sees it, the bank was stuck with what it terms an "early repayment penalty" of $750,000 for paying back its $15 million injection just ten weeks after it had received it.

"What they did is wrong and fundamentally un-American," Centra CEO Douglas Leech told the Times, comparing the payout to being charged a 60% interest rate. Today John Fahey, a vice president at the bank, likened the transaction to being forced to pay a 999% premium Fortune.

Behind those bits of somewhat wild analogizing is a major campaign by big banks to get out of paying the government in full if they choose to return their TARP money early. Jamie Dimon and Lloyd Blankfein respective CEOs of JP Morgan and Goldman Sachs, took up the issue with Obama himself at their April 10 meeting, and the American Bankers Association is lobbying Congress to relax the "penalties."

Here's their argument: TARP funds came with options to buy stock in the bailed out banks. The idea was that if the banks profited from the Treasury's injection of capital, taxpayers could share in the profits. The strike prices on the options were calculated on the basis of the average of the bank stocks during the 20 trading days prior to the TARP injections, and the warrants on all but fifteen of the 321 publicly-held banks are currently "out of the money" -- or considerably higher than it would cost to buy the shares today. But the warrants don't expire until 2018, so presuming bank stocks rise over the next decade, they are quite valuable. One analysis estimates that the government's warrants to buy Goldman Sachs and JP Morgan stock alone are worth $2.7 billion. If Goldman returned its TARP money this month, that would effectively mean they had paid a 19% annualized interest rate on the TARP funds, or nearly 10% of the entire injection -- a stiffer "penalty" than even Centra's 5%.

Leaving aside the various "backdoor" federal bailouts from which Goldman and JP Morgan have benefited, however, it's critical to remember that TARP funds weren't technically loans but government investments in preferred shares of the banks. In late September Warren Buffett struck a similar deal to inject $5 billion into Goldman -- with a much more valuable warrants package attached. Buffett's warrants -- more than 43 million with a strike price of $115 -- are already in the money. The government invested twice as much in Goldman for a mere 12.207 million warrants with a strike price of $122.90. The bankers argue that the options were granted before TARP money became stigmatized, and subject to all manner of thorny limitations. At JP Morgan and Goldman Sachs, which have announced their intention to buy back their shares, the laws limiting executive compensation to $500,000 a year are the main bone of contention with the TARP, and giving it back is a show of financial strength.

But for a privately-held community bank like Centra, the drawbacks to holding onto the TARP money are less clear. Privately-held firms have no wider investment community to impress with the show of strength. And it's not about pay limits either, the bank's vice president told USA Today last week:

John Fahey at Centra Financial, says his bank's payroll for 248 employees is $14 million, so he wasn't worried about compensation. "But when the government tries to tell you how to run employee training or rescind job offers, it's cumbersome," he says.

Odder still, Centra received its TARP funds on January 16, well after executive pay limits and other provisions had been passed. So why did they take the money in the first place? Earlier this week Leech told Fox News' Neil Cavuto it was "in the spirit of good faith and as a matter of patriotic duty." Zonnie Breckinridge, a Dallas attorney whose firm Hunton & Williams represents hundreds of community banks, says the government laid on patriotism appeals fairly thick in their initial pitch of the program to small banks. But very few of their clients, she says, ended up taking TARP funds, not because of the limitations but because the sudden PR stigmas associated with taking bailout money. As the bailout has bloated and become more and more politically unpopular, banks that didn't participate in the TARP have been trumpeting their "independence" to gain market share. In Austin, she says, credit unions erected billboards with the slogan "Not a bailout bank."

"They were going to be touted as heroes in their community for doing it, and those who jumped on the bandwagon were expected to take the cash and leverage it out for at least three to five years" -- enough time, she explains, to make up for giving away the warrants -- "and then the whole tenor of the program went from that to 180 degrees in the opposite direction." Now small banks that took the money in regions of the country more "susceptible to that negative kind of negative advertising" want to lose the stigma.

But banks like Centra, she maintains, "knew exactly what they were doing" when they issued the warrants; she thinks it's one of the reasons only 43 privately-held banks -- for whom the government valued the warrants at a flat 5% of the government investment because their shares aren't traded on any stock exchange -- have thus far participated in TARP. And the PR value of the sympathetic media attention it has received for being one of the first banks to repay the funds will no doubt go part of the way toward repaying Centra's $750,000.