Regional Gulf Coast banks, particularly those operating as portfolio lenders, are already suffering.Yet while most of the press on the environmental damage has focused on Louisiana, the real damage for banking is likely to be located among community banks in Florida.

Barron’s recently identified three “top” Gulf Coast banks: MidSouth Bancorp, Iberia Bank, and Teche Holding. Those would not be the only institutions at risk. Regions has always been an active partner with real estate developers in Alabama, Georgia, and Florida. BB&T had a big presence in Florida. This year, it added to that when it acquired the assets Colonial Bank. Synovus owns scores of small town banks throughout the area. (more…)

Yesterday, President Obama signed the Helping Families Save Their Homes Act into law.  What a relief!

There are two main features to this law:

First, it protects renters.  Renters have been one of the groups getting the collateral damage from the foreclosure crisis.  When an investor owner can’t pay his mortgage, he has to turn the home over.  In most cases, that means that the renters need to move on, as well.

Second, it includes a disclosure rule that requires companies buying mortgages on the secondary market to inform borrowers about who now owns their mortgage.

I have talked with so many people who are not sure who owns their mortgage.  I would say that this is a hard thing to understand.  I have tried to explain it numerous reporters.  Many are confused by the idea of a service and an investor on top of an original lender, possibly working with a wholesaler through a mortgage broker.

Definitely my broadcast news reporters couldn’t grasp it.

There are some other good features, too: a two percent cap on origination fees, and a “net tangible benefit” to borrowers during a refinancing.

The ABA and their bankers are a hard group to bargain with.  They have a lot of friends, particularly on the Financial Services Committee.  So, in a way, getting any kind of new law is great.  That said, this law is sort of misleading, because it does not come with the appropriate penalties for financial institutions who break its terms.

That’s because “curing” the problem does not require a systemic fix, but only a solution for the particular borrower.

The new survey on banks is out from JD Power & Associates.  The survey finds that people are growing increasingly unhappy about the level of service that they get at their bank.  The survey covered experiences last year, before the credit crisis really took over the attention of the public.  Presumably, that was also at a time when banks were operating at full speed.

The survey says that consumers resent high fees.  They also find it maddening that it can be so difficult to reach a real live person.

I thought of a few things that banks should do, for free.

Someone at your bank should be able to text or email a consumer when a check clears. This would cost little, but it would increase the certainty that a borrower feels about their funds.  Since banks are at liberty to process checks in a relatively large time frame, this is especially important.

They ought to offer live customer service from a person in the United States.  It is true that lower-cost services can be had overseas.  Banks should reach a higher standard, though, given that they tap so many government resources to provide their products.

Banks should provide free deposits to stored value cards on electronic transactions.  This would transform the “bottom of the pyramid” experience with regard to financial services.

Fraud protection should be for everyone. Right now, if you have VISA or Mastercard, you are entitled to some good protections on wrongful charges.  If you have another card, though, the Federal Reserve puts very few requirements in place to require more protections.

You should be able to choose to have paperless statements. Preferably, you should be able to say that you would like paperless statements on an account-by-account basis.  You should be able to say that you’d like to have your savings account delivered paperless, while still getting mail on your checking account.