A federal report finds at the same time Iowa’s economy made big gains in the past year, many Iowans dug themselves deeper into debt while saving less. Rich Cofer, senior financial analyst with the Federal Deposit Insurance Corporation, says Iowa’s loan demand has outpaced deposits for three straight years.

Cofer is based at the F-D-I-C’s Kansas City Regional Office, which oversees a dozen Midwestern states, including Iowa and Nebraska. Cofer says “What we’ve seen certainly over the last several quarters in Iowa and Nebraska is a continued economic improvement in both of those states and typically when you have economic growth you also have increased demand for lending activity.

We’ve certainly seen that in both Iowa and Nebraska.” He says as people borrow more money and save less, that puts banks in something of an awkward situation. Cofer says “A lot of our banks in Iowa and Nebraska are in rural areas and they’re suffering from long-term depopulation trends and that has put a lot of pressure on their deposit-gathering activity. They all share the same common theme that they they do have difficulty in attracting local deposits in their market.”

He says this pattern can actually work to the consumers’ advantage, as when banks are competing for customers, they may offer higher rates for deposits in savings accounts, money markets and C-Ds. Cofer says “One thing a lot of our community institutions in Iowa and Nebraska have turned to are borrowing from the Federal Home Loan Banks in Des Moines and Topeka.

These are programs where they’re able to pledge some of their real estate-backed loans and receive funding from these entities. So we’ve seen that grow throughout the banks in both states.” To see the agency’s full report on Iowa or any other state, surf to “www.fdic.gov”.