I think the biggest responsibility is not to make them loans they can't afford to pay back. More foreclosure relief should be undertaken, but I think the biggest obstacle is the existence of multiple mortgages on the same property, since the second lien holder has little incentive to join in the agreement.
My response to the question is that the first responsibility of banks getting federal assistance is to pay back that assistance. While many have already done so, more need to.
I do think we need to keep a balance in mind on the topic of expanded lending. As the housing bubble/bust and resulting foreclosures demonstrated, we don't do families a favor getting them into a home they can't sustain. Nor do we do a favor to small businesses giving them loans they can't repay. So government policy should refrain from pushing banks to make loans based on political need rather than sound business practices.
That said, lenders should be encouraged to make responsible, sustainable loans. I am not sure I would call that "help." I don't think banks should be giving subsidies or making loans at a loss; after all that's one of the reasons we are in this mess.
For many loans, such as mortgages, the bank is often just the servicer, not the actual owner/investor in the loan. As the taxpayer is currently the largest investor in mortgages, the taxpayer should not be asked to take any more losses (I'm opposed to the notion that since banks got taxpayer-funded bailouts, everyone should then get a taxpayer funded bailout).
I'm no expert in this area, but would say they could probably help in making sure the design of products sold to middle-class people are well-constructed and understood by the people they are selling them too. This is the thesis behind the CFPA about to be proposed out of Senate Banking Committee.
Think they ought review their whole interface with so-called middle-class customers that would be partially providing services that fit with the resources of middle class clients. Conversely, they would be well-advised to make sure that the kinds of transactions and relationships they are offering are fair and, most importantly, well-understood by the people proposing to buy them.
Banks have all sorts of obligations to treat all customers, not just middle class, in a fair way. After all, they are in business to make money, but any well run organization, banks included, should have an ethic, if you will, that recognizes it is a part of their responsibility not just to make a sale, but run an ethical business.
The Wall Street, Main Street issue has been, in a way, overemphasized. I think a lot of the blame for difficulties rests not just with Wall Street, but with other players, most particularly legislators and regulators who interpreted the rules perhaps not strictly enough to head off the problems that we had.
As students of the business cycle (not to be confused with economists) we understand it is normal for non-financial credit growth to continue easing well into the recovery, and only turn up in the wake of the business cycle upturn -- after lenders are less scared and people are eager to borrow again.