Nov. 14 (Bloomberg) -- Yields on bonds backed by auto loans and credit card debt stayed at record highs relative to benchmark interest rates on doubts the U.S. government can produce a strategy that will support the nation's consumers.

The gap, or spread, on top-rated credit card bonds maturing in three years remained at 525 basis points more than the London interbank offered rate, or Libor, according to Bank of America Corp. data. Similar auto-loan bonds are trading at 650 basis points over Libor.

Treasury Secretary Henry Paulson has scrapped plans to use the $700 billion Troubled Assets Relief Program to buy devalued mortgage assets and said Nov. 12 his focus has shifted to the woes afflicting consumers. The government hasn't specified what steps it will take to boost investment in consumer-backed debt, discouraging investors from returning to the market.

``They have said things in the past that haven't come to fruition,'' said James Grady, a managing director at Deutsche Bank AG's asset management unit in New York. ``Until we see some concrete actions taken, the market's reaction will be muted. At this point, the burden of proof is on the Treasury and the Fed to back up words with actions.''

Though there are willing buyers for consumer asset-backed bonds at current spread levels, sellers are resisting, Vipul Jain, a strategist at Bank of America in New York, said today in a note to clients.

Mortgage Bonds Fall

Commercial and residential mortgage bonds fell after Paulson shifted his focus. Spreads on top-rated commercial mortgage- backed securities soared 156 basis points to a record 789 basis points more than benchmark swap rates during the week, according to Bank of America.

All 24 ABX credit-default-swap indexes tied to subprime mortgage securities fell to new lows, according to Markit Group Ltd. Top-rated bonds created in the first half of 2007 fell 6.2 percent to 39.21, Markit Group data show.

Paulson's comments were primarily aimed at the market for consumer asset-backed securities, leading investors to feel that mortgage assets are not a priority, Grady said.

``The market recognized that a lot of capital has already been spent, and there is a limited pot,'' Grady said.

Treasury will try to ease the ``distress'' in securities markets that's raising consumer borrowing costs, Neel Kashkari, the department's assistant said today in prepared testimony for the House Oversight and Government Reform Committee's subcommittee on domestic policy.

``We are examining strategies to support consumer access to credit outside the banking system, specifically the asset-backed securities market,'' Kashkari said.

To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net

Last Updated: November 14, 2008 15:08 EST