Regional banks, usually a financial segment as boring as most of their names, have become one of the hottest topics in the financial news the last few months. And for bad reasons. First, Silicon Valley Bank, a major player in the tech world, nearly collapsed following a run. First Citizens eventually bought out SVB, as the bank was known.

Then came the collapse of Signature Bank, a New York institution that made a name for itself by catering to the cryptocurrency crowd. Flagstar bought up what was left after Signature’s fall. First Republic Bank was next. Another California institution, it targeted a similar customer base to SVB and suffered the same problem as those customers withdrew money to chase higher returns elsewhere. JPMorgan Chase gobbled up that one.

Other names have popped up as candidates for disaster. The first week of May saw the entire community bank segment routed on Wall Street. President Joe Biden and officials from his administration repeatedly assure the public there’s little chance of a new financial crisis like the mortgage crisis of 2008, but many observers remain unsure.

The reasons for these banks’ troubles are many, including higher interest rates and factors unique to each institution. But the rash of problems have created volatility in the stock market and have some calling for increased regulation. The volatility makes lenders more cautious, while new regulation would increase the cost of doing business for these banks.

Both are bad news for commercial real estate, a large segment for community banks. In fact, SVB was founded by a professor of construction management, and one of its early goals was financing the offices for growing tech giants such as Google. Recently, the bank was a major source of funding for affordable multifamily housing.

There are other concerns for small businesses

Community banks were more heavily regulated until a few years ago, when the Trump administration reduced some of those post-2008 requirements. Community bankers argued they lacked the resources of large, national banks to meet these regulations and that the level of regulation should reflect the systematic risk these banks posed. Now some are making the argument that the risk is greater than presented and the regulatory level should return to what it was.

But is this true? Most community banks, as I said, are boring. Their clients are not high-flying techies. They are small business owners.

SVB, Signature, and First Republic seem to fall into a category with another headline-making financial entity — FTX. This was the Bahamas-based crypto exchange that failed earlier this year due to either a Ponzi scheme or just really bad management. These institutions all sought customers who wanted a high rate of return. It turns out these customers are fairly fickle.

The Main Street businesses most community banks serve are more interested in having funds available to meet their needs. This makes them much more loyal. Unfortunately, firms such as yours will pay the price for the high flyers of the world.