Reports were the first eight banks, the big ones, weren’t given a choice, they were told to participate or else. The reason given was Treasury didn’t want taking TARP to be seen as a sign of weakness.
Beyond the big guys, the banks applied to Treasury and were accepted or rejected. I’m sure capital ratios would have been a primary consideration, but I don’t know exactly how Treasury decided who qualified for TARP and who didn’t. As far as I know, information that an applicant had been rejected was not made public by Treasury.
Interesting - thanks for sharing.