Other Iowa banking officials agree there is little reason for concern. The quality of the loans the banks have outstanding are in very good shape. Despite lack of concern from Iowa officials, a federal report earlier this month urged banks to look more critically at their loans. These early signs of adverse trends across the board call for our continued close monitoring of . . . Although not a widely held belief, some Iowa bankers say they agree with the FDIC that banks are somewhat overextended.
Banks are so loaned up that they can be a little pickier.
Gruenwald said overly easy access to credit is making bankruptcy more common and he doubts that the economy will retain its level of strength much longer. Last month, Norwest CEO Richard Kovacevich said banks in his company's 16-state chain will further discipline lending this year because the U.S. economy may be peaking. In Norwest's annual report, Kovacevich said increased competition among lenders over the past year has forced many banks to make riskier loans. Kovacevich said Norwest instead will rely on expanded brokerage, money management and mortgage businesses to offset declining profit from bank lending. With about 11 percent of assets held by Iowa-chartered banks, Norwest can set the tone for other banks.