NEW YORK (Fortune) -- Wells Fargo wants taxpayers to know their investment is already paying dividends...literally.

The San Francisco-based bank said Monday it paid a $371.5 million quarterly dividend to the U.S. Treasury on the preferred shares the bank issued to the government in last fall's banking industry rescue.

Wells (WFC, Fortune 500), which got $25 billion from Treasury last October in the first installment of the Troubled Asset Relief Program, or TARP, also said that it has been lending money aggressively even as the economy sputters.

"Last quarter alone, we made $22 billion in loan commitments and $50 billion in mortgage originations," Wells finance chief Howard Atkins said in a midmorning press release Monday. He added that this is almost three times what the Treasury invested in the bank.

What banks are doing with the money the Bush administration's Treasury Department showered on them beginning last fall has become a major issue on Capitol Hill. Congressional Democrats are demanding that any further aid to the financial industry come with strict terms for how much recipients of TARP funds must lend, how much they can pay their executives and how they keep track of where the money is going.

The Obama administration has signaled it is receptive to those ideas, saying for instance that future recipients of any "exceptional" government aid would have to cut their quarterly dividend to a penny a share. But the full terms of any future assistance remain unclear.

Last week, Bank of America (BAC, Fortune 500) -- the troubled Charlotte-based lender that, like rival Citigroup (C, Fortune 500), has received two infusions of federal funds -- became the first big bank to say it would track and disclose its lending and investing activity across 10 key areas.

Wells' dividend payment to Treasury isn't unusual, though the bank appears to be the first financial titan to announce the payout in a press release.

Firms that received aid under the TARP capital purchase plan agreed to issue the government preferred shares paying a 5% dividend for the first five years and 9% thereafter. The government also got warrants to buy common stock in the future.

In Wells' case, Treasury got warrants to buy 110 million Wells shares -- equivalent to about 3.3% of shares outstanding -- at $34.01 each. But bank shares have been in free fall the past few months. The KBW Bank Index has lost half its value since mid-October.

Wells, despite reporting better-than-expected results last week and saying that it will not need more TARP money, has been no exception. The stock was trading around $18.83 in midday action Monday, which means the taxpayers' warrants have lost about $1.7 billion of their value on paper.



