Here are excerpts from the testimony of Chris Lewis, lobbyist for the Consumer Federation of America, given on Thursday before the House Banking subcommittee on consumer credit.

The banking industry is out of touch with consumers and small-business persons who cry out for credit on fair terms, and it is out of touch with consumer demand for higher yields on savings accounts.

Recent increases in the prime rate at banks have hurt various sectors of the economy that depend on credit, like homebuilding. But it is consumers who shoulder the bulk of the burden of increased payments from the higher cost of credit - billions of dollars of increased interest payments. Deep down in the

trenches, it is consumers who are impacted the most when credit interests rates are raised.

And the abrupt jump in the cost of credit has not been accompanied by an equivalent rise in interest paid to consumers for deposits held at the nation's insured depositories. The net result is that the banking industry, without lifting a finger, is pocketing billions of dollars in new earnings.

While the banking industry may be out of touch with consumers, it is certainly not out of touch with making profits. Last year, the banking industry made record profits of $43.4 billion on top of record earnings in 1992 of $32.2 billion - some $76 billion in profits over the last two years.

We have no problem with banks making an honest buck or with a healthy banking industry. The nation, the economy, and consumers all benefit from a sound banking system. However, unproductive profiteering by publicly insured depositories is deeply troubling...

Disposable Income Hit

The rapid increase in prime rates since the beginning of the year - 1.25% - means one thing to consumers: the loss of billions of dollars of disposable income. [And it means] another thing to bankers and the rest of the finance industry: the gain of billions of dollars in new income.

The impact of a [1.25-percentage-point] hike in interest rates on outstanding consumer debt burden is astronomical. Almost a trillion dollars of reported consumer debt is adjustable...

Taking just outstanding balances on adjustable-rate mortgages, open-ended home equity lines of credit, and revolving credit card debt, we estimate, conservatively, that consumers will pay an additional $12 billion in interest.

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