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Attn: TARP Bankers: How good are you at reading the tea leaves?

Banks who have TARP money should give the story above some careful reading. Why? Because TARP is becoming a four letter word to an increasing number of people, some of whom have completely freaked-out over it. If you’ve got customers in your bank who are like the good folks in Greenville, SC, (who completely and thoroughly dissed their congressman this past Friday) well, maybe you need to start thinking about how your bank will fare when these people turn their attention to you.

Apparently, the recent tax protests, Tax Day Tea Parties, have struck a deep chord with people. Given how they treated SC Congressman Barrett, they’re good and mad about the bail out and they are beginning to aggressively confront the people they perceive as responsible. First, it’s the politicians. Next, it may be the bankers.

Here’s what happened:

According to The Scoop, Congressman Gresham Barrett, a Republican, attempted to speak before an estimated crowd of 4,000 people at a Post Tax Day Tea Party in the Upstate only to be greeted by boos from most everyone in attendance. Protesters screamed “go home” and blew air horns during the duration of Barrett’s five minute speech. Some even turned their backs to him. Messages on dozens of signs and hundreds of fliers also expressed a similar contempt for ‘Bailout Barrett’. None of the other speakers — including Gov. Mark Sanford, Sen. Jim DeMint and Lt. Gov. Andre Bauer — were booed.” So much for Southern Hospitality.

So, what are the potential implications for a bank that has TARP money?

Implication Number 1: I think there’s a 15-25% chance that a significant portion of a bank’s customers are harboring resentment toward the bank because they accepted “bail out money” for which they have observed no direct community or customer benefit. The percentage could well be higher if your bank is in a big Republican area.

Implication Number 2: your bank should strongly consider undertaking a survey of your customers and your employees to figure out just where your bank stands with your customer on this tarp issue.

Implication Number 3: if you’re a TARP bank, and you can’t demonstrate that you have put the money to work in your market, you are courting a PR disaster.  Get those TARP funds out there and document what you’ve done.

Implication Number 4: if there are banks in your market who did NOT take TARP money, you should be thinking about how you should respond to any advertising they come up with. So far, the anti-TARP crowd has been pretty smug. Worse, TARP banks have let them get away with it.

Implication Number 5: you should be thinking about ways to quickly provide credible information to your directors, managers and employees that explains why your bank elected to take TARP money – and most importantly, what you plan to do with the money and WHEN you plan to do it.

It would be smart to get in front of this phenomena. Do it now while it will cost less and when you’ll get credit for being a good guy who was willing to help.

Here’s what I think any TARP bank should be doing to mitigate any resentment in its market:

Phase One: make sure you get the message out there that your bank is actually paying the government for the money (and paying for FDIC insurance, too). Make clear that the government is going to make a nice return on the TARP money. That will make the Tea Party people happy – hopefully.

Phase Two: (1) get some loans out on the street, (2) provide some foreclosure assistance, (3) provide some money to organizations (like local food banks) that will be used to help local people in need and (4) be sure you don’t do this under a basket. Get credit for it.  This is not a time for reticence.

Resist the temptation to do what bankers usually do: have meetings about the problem, fuss, fume and complain, and, then, put off a solution, hoping it will go away. It won’t.

Get your TARP Response program going. Do it now. It’s the smart thing to do. It’s the right thing to do. And, it will never cost less to do than it costs now.