Why Aren't Banks Lending with the Taxpayers Money?

Well, when it comes to residential mortgages they are lending and you can get a loan but they aren’t lending as much as they should be.  In The Wall Street Journal article below they said that publicly, officials are pushing banks to make loans, tweaking them for taking government money while they tighten lending standards and turn away borrowers with less than perfect credit records. Privately though, some bankers say regulators are urging them to build capital cushions that are considerably thicker than what is officially required to be classified as a healthy institution.
So where does it go from here?  I don’t know the answer to that but I know they have to be careful to not horde all of the money and at the same time keep their balance sheets solid.  Only time will tell.   

http://online.wsj.com/article/SB123024352610834057.html?mod=todays_us_money_and_investing