WASHINGTON -- The widening gap between what banks pay on deposits and the rates they charge for loans is costing consumers "billions of dollars a year in interest overcharges," the Consumer Federation of America said Tuesday.

One of the wides disparities is between what banks pay depositors on money-market accounts and the rate they charge for credit card borrowing, said Stephen Brobeck, executive director of the federation.

Rates for money-market accounts and six-month certificates of deposit fell below 3% in November, while the average credit card rate remained above 18%, he said.

A Record Spread in Rates

The 15-point spread is the highest ever, Mr. Brobeck added. "Similar, the 13- percentage-point spread between savings rates and personal loan rates has never been higher," he said.

He accused "most banks" of "fattening record profits" through interest overchanges.

The American Bankers Association blasted the study, saying it shows "a lack of understanding of the consumer credit market and how banks price consumer loans."

The market is diverse and fiercely competitive, the trade group said. Six of the top 10 credit card providers and four of the five largest consumer lenders are nonbanks, the ABA said.

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