Like many community bankers, Buckner Woodford is eager for his Federal Home Loan Bank to loosen its collateral restrictions and free up new sources of funding.

Mr. Woodford, president of $339 million-asset Kentucky Bank in Paris, Ky., said changes in collateral rules allowed under last year's financial reform bill would help ease the pinch at many deposit-starved community banks. Kentucky Bank's loan portfolio has grown 15% on average in each of the last three years, while deposits have increased just 5%.

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