TCF Financial Corp. is giving the government back its money.

The bank, which has a market capitalization of $1.3 billion, is returning the $361.2 million of TARP dole. What is interesting is that, in returning the funds, TCF has spotlighted what is wrong with the TARP: that it tars and feathers every bank in the program. Here’s how TCF Chairman and Chief Executive Officer William A. Cooper puts it:

In November when we agreed to accept the funds under the Capital Purchase Program, it was with the understanding that only healthy banks would be granted the funds. These healthy banks would then employ the funds within their markets to expand lending to creditworthy individuals and businesses. Recent actions by the U.S. Treasury and possible congressional or regulatory restrictions/mandates changed the rules. As a result, public perception views those banks that took the TARP money as having done so out of weakness and a need to survive without distinction among TARP programs or individual bank capital adequacy. We believe participation in TARP has created a competitive disadvantage for TCF and it is in the best interest of our shareholders to redeem these shares.

Whoa, tell us how you really feel! Just so we’ve got this clear, in Cooper’s view, a) the Treasury and Congress have undermined TARP to the point where it no longer is doing what it was supposed to do; and b) any bank with TARP funds is at a “competitive disadvantage,” or at the least is viewed that way by the public and presumably by the banking industry.

Talk about a broadside from a banker.