Many of the biggest TARP-baby banks have paid back the government, or have plans to do so, and are considered past the point where they could actually fail. But not so for small banks, which have emerged as a big problem for the federal bailout effort.

A new report from the Treasury has found that "community banks continue to plague the program. A total of 101 bailed-out banks--nearly all are small banks--have missed paying the government a dividend, which was a condition of taking the aid," reports the Washington Post. That's up 25 percent since February and nearly double the November number. If a bank misses six dividend payments, the Treasury can take corrective action in the form of adding members to the banks' boards. Only one bank so far has missed that many payments. But more may soon gain that dubious distinction.

The issue now is what to do with the bailout effort. You can expand the program and throw lifelines to more banks, or you can cut losses. It seems that more oversight of the program would be warranted to make sure that the recovery efforts at banks are in keeping with larger goals, such as small businesses. We'll undoubtedly see more failures. 

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