WASHINGTON -- The American Bankers Association on Wednesday formally opposed a 22% premium increase planned by the Federal Deposit Insurance Corp.

In comments filed with the agency, the ABA said raising deposit insurance premiums now would thwart an economic recovery. "There is no escaping the fact that higher premiums retard bank earnings and capital growth and result in less credit at higher prices," wrote Ed Yingling, the ABA's lead lobbyist.

In May, the FDIC proposed an average premium of 28 cents per $100 in insured deposits, up from the current 23 cents. The increase, scheduled to take effect Jan. 1, would be the fourth since Dec. 31, 1989, when the premium was 8.3 cents per $100.

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