Duke told bankers at a conference in Florida that while mortgage rates have come down, Americans are dedicating an above-average portion of their income to servicing debts incurred in the boom.

“Households remain quite burdened by debt payments,” she said at the Consumer Bankers Association annual conference.

She noted that the Fed’s household debt service ratio, which tracks the share of disposable income spent on debt repayment, remains above its historical range even after two years of bank belt-tightening and consumer deleveraging.

Consumer credit has contracted by 5% since 2008, the Fed said Monday, mostly due to banks cutting off credit card lines. Duke noted that 2009 marked the biggest-ever drop in consumer credit.

Duke said consumers “will re-engage slowly” as the recovery proceeds and regulators implement better consumer protection rules. Her comments come a day after Fed chief Ben Bernanke predicted joblessness will remain stubbornly high and said the recovery “won’t feel terrific.”

But it could be worse, as Duke noted in a colorful rehash of the Fed’s decision to bail out AIG .

“Panic was so heavy in the markets that it was almost a physical presence,” she said. “I kept having this image in my head of the panic being like the monster called “the Blob” that I saw years ago in an old movie.

“Like the Blob, panic attacked one institution after another, and with each institution it ate, it grew bigger and stronger. We had just watched it eat Lehman. We could not stop it there because we are only authorized to lend against collateral, and Lehman did not have enough collateral. Now it was focused on AIG.”

The panic, Duke might have added, is gone, at least on this side of the Atlantic. But the debt blob lives on.