The American Bankers Association asked Congress Thursday to let rural banks raise money in capital markets to meet the increasing demand for farm loans.

"Banks need new sources and types of lendable funds," because deposit growth alone cannot fund agricultural credit needs, said ABA representative Dennis Everson, a senior vice president of First Dakota National Bank in Yankton, S.D.

He told the Senate Agriculture Committee that rural banks want access to the same funding sources as the Farm Credit System, a government-sponsored enterprise composed of farmer-owned cooperatives.

In addition, rural banks need a secondary market for economic development loans and support for public/private partnerships that would supply equity capital to start-up business, Mr. Everson said.

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