UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.  20549



                                       FORM 10-Q



          Quarterly report pursuant to Section 13 or 15(d) of the Securities
                                 Exchange Act of 1934

                   FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997




                            COMMISSION FILE NUMBER: 0-2616



                            CONSUMERS FINANCIAL CORPORATION
                                1200 CAMP HILL BY-PASS
                                  CAMP HILL, PA 17011

            PENNSYLVANIA                                    23-1666392
      (State or other jurisdiction of                 (I.R.S. Employer
            incorporation or organization)            Identification No.)



            Indicate by check mark whether the registrant (1) has filed all
      reports required to be filed by Section 13 or 15(d) of the Securities
      Exchange Act of 1934 during the preceding 12 months (or for such shorter
      period that the registrant was required to file such reports), and (2) 
      has been subject to filing such requirements for the past 90 days.

                             Yes    XX         No         



            Indicate the number of shares outstanding of each of the issuer s
      classes of common stock, as of the latest practicable date.

                                                              Outstanding at
            Class of Common Stock                           October 31, 1997
               $.01 Stated Value                             2,596,155 shares



                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                                         INDEX


                                                                              
            PAGE
                  PART I.  FINANCIAL INFORMATION                              
      NUMBER

      Item 1. Financial Statements:

              Consolidated Balance Sheets -                                   
                  September 30, 1997 and December 31, 1996              3

              Consolidated Statements of Operations -           
              Nine and Three Months ended September 30, 1997 and 1996   4 - 5

              Consolidated Statements of Cash Flows -                         
          
                  Nine Months Ended September 30, 1997 and 1996         6

              Notes to Consolidated Financial Statements                7 - 12

      Item 2. Management s Discussion and Analysis of Results of        
                  Operations and Financial Condition                    13-17


                  PART II. OTHER INFORMATION

      Item 1. Legal Proceedings                                         18

      Item 2. Changes in Securities                                     18

      Item 3. Defaults upon Senior Securities                           18

      Item 4. Submission of Matters to a Vote of Security Holders       18

      Item 5. Other Information                                         18

      Item 6. Exhibits and Reports on Form 8-K                          18





                            PART I.  FINANCIAL INFORMATION
      ITEM 1.  FINANCIAL STATEMENTS

                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
      <TABLE>
          <CAPTION>                                                  September 30, 1997            December 31, 1996
          (in thousands)                                                 (Unaudited)

          <S>                                                                    <C>                          <C>
          Assets
          Investments:
               Fixed maturities                                              $32,459                      $42,618
               Mortgage loans on real estate                                   2,112                        2,286               
               Policy loans                                                                                   518
               Other invested assets                                           1,841                        1,866
               Short-term investments                                          4,747                        3,901

                    Total investments                                         41,159                       51,189

          Cash                                                                   503                          556          
          Accrued investment income                                              596                          731
          Receivables                                                         16,848                       20,290
          Prepaid reinsurance premiums                                        10,926                       17,338
          Deferred policy acquisition costs                                   16,877                       18,949
          Property and equipment                                               2,074                        2,168
          Other real estate                                                    1,012                        1,115
          Other assets                                                         1,495                        2,283

                                                                             $91,490                     $114,619
          Liabilities, Redeemable Preferred Stock and
          Shareholders  Equity 
          Liabilities:
               Future policy benefits                                        $21,074                      $35,386
               Unearned premiums                                              51,836                       56,178
          Other policy claims and benefits payable                             2,482                        2,736
               Other liabilities                                               4,111                        5,495               
               Income taxes:                    
                    Current                                                       21                        1,185
                    Deferred                                                      49                          296

                                                                              79,573                      101,276
          Redeemable preferred stock:
               Series A, 8 1/2% cumulative convertible
                    net of treasury stock                                      4,679                        4,693

          Shareholders  equity:
              Common stock                                                        30                           30
              Capital in excess of stated value                                7,989                        7,966
              Net unrealized appreciation 
                    of debt and equity securities                                230                           70               
               Retained earnings                                                 460                        2,009
               Treasury stock                                                 (1,471)                      (1,425)

                                                                               7,238                        8,650

                                                                             $91,490                     $114,619

         </TABLE>

                      CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                      (UNAUDITED)
      <TABLE>
          <CAPTION>                                              Nine Months Ended             Three Months Ended
          (in thousands, except per share data)                    September 30,                  September 30,

                                                                1997           1996            1997          1996
          <S>                                                   <C>             <C>  
          Revenues:
               Premiums written                               $20,535         $24,328          $7,055        $7,818

               Decrease (increase) in unearned premiums          2,858           (146)            521           260


               Gross premium income                             23,393         24,182           7,576         8,078
               Less reinsurance ceded                           (7,771)        (9,261)         (2,204)       (3,026)


               Net premium income                               15,622         14,921           5,372         5,052

               Net investment income                             1,589          1,578             450           540
               Net realized investment gains (losses)              224           (158)            (22)         (136)

               Fees and other income                               903          1,070             361           318
                                                                18,338         17,411           6,161         5,774

          Benefits and expenses:
               Death and other benefits                          9,456          8,187           2,820         2,739

               Amortization of deferred policy
                    acquisition costs                            7,080          7,434           2,471         2,477

               Operating expenses                                3,711          3,556             992         1,202
                                                                20,247         19,177           6,283         6,418

          Loss from continuing operations before income
              tax benefit                                       (1,909)        (1,766)           (122)         (644)

          Income tax benefit                                      (828)          (440)           (231)         (363)
          Income (loss) from continuing operations              (1,081)        (1,326)            109          (281)


          Discontinued operations:               
            Income from operations of discontinued
              businesses (net of income taxes)                                    435                            57
            Loss on disposal of discontinued
              businesses (net of income taxes)                    (125)                            (7)
                                                                  (125)           435              (7)           57


          Net income (loss)                                    ($1,206)         ($891)           $102         ($224)


         </TABLE>                                     

                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
                                      (UNAUDITED)

      <TABLE>
 <CAPTION>                                              Nine Months Ended             Three Months Ended
 (in thousands, except per share data)                    September 30,                  September 30,

                                                         1997         1996            1997          1996

 <S>                                                    <C>          <C>               <C>         <C>
 Per share data:

        Loss from continuing operations                ($0.55)      ($0.64)         ($0.01)       ($0.15)
        Discontinued operations                          (0.05)        0.17                          0.02

        Net loss                                       ($0.60)      ($0.47)         ($0.01)       ($0.13)


        Weighted average number of shares
            outstanding                                   2,602      2,614           2,597         2,612   




  Loss per common share-assuming full dilution            *            *                *             *
            * Anti-dilutive




 Cash dividends declared per common share                None         None            None          None

         </TABLE>



                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)

      <TABLE>

          <CAPTION>(in thousands)                                                    1997                 1996
          <S>                                                                            <C>                 <C>
          Cash flows from operating activities:

               Net loss                                                              ($1,206)              ($892)

               Adjustments to reconcile net loss to net
                    cash provided by operating activities:
                    Deferred policy acquisition costs                                 (7,543)             (7,427)
                Amortization of deferred policy acquisition costs                      7,080               7,854
                         Other amortization and depreciation                             318                 351
                         Change in future policy benefits                             (3,089)               (102)
                         Change in unearned premiums                                  (4,342)                146
                         Change in amounts due reinsurers                             (1,022)               (232)
                         Income taxes                                                 (1,828)               (426)       
                         Change in prepaid reinsurance premiums                        6,411                 689
                         Change in other receivables                                   4,303               2,006
                         Change in other liabilities                                    (307)               (242)
                         Other                                                            42                (608)

                    Total adjustments                                                     23               2,009

               Net cash provided by (used in) operating activities                    (1,183)              1,117


          Cash flows from investing activities:
               Purchase of investments                                               (12,061)             (7,038)
               Maturity of investments                                                   738               4,929               
               Sale of investments                                                    12,832               3,541
               Purchase of property and equipment                                                            (27)

               Net cash provided by investing activities                               1,509               1,405


          Cash flows from financing activities:               
          Principal payments on debt                                                                   (680)
              Receipts from universal life and investment products                                         3,656
             Withdrawals on universal life and investment products                                        (4,935)
               Purchase of treasury stock                                                (63)                (48)
               Cash dividends to shareholders                                           (316)               (307)

               Net cash used in financing activities                                    (379)             (2,314)

          Net increase (decrease) in cash                                                (53)                208

          Cash at beginning of period                                                    556                 451


          Cash at end of period                                                         $503                $659


         </TABLE>

                      CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)

      1.    GENERAL:

      In the opinion of management, the accompanying unaudited consolidated
      financial statements contain all adjustments (consisting only of normal
      recurring items) necessary to present fairly the Company's consolidated
      financial position as of September 30, 1997, the consolidated results of
      its operations for the nine and three months ended September 30, 1997 and
      1996 and the consolidated changes in its cash flows for the nine months
      ended September 30, 1997 and 1996.  Certain prior year amounts have been
      reclassified to conform with classifications used for 1997.  Such
      reclassifications had no impact on operating results.
       
      Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted.  These  financial
      statements should be read in conjunction with the financial statements 
      and notes thereto included in the Company's 1996 Form 10-K.

      The results of operations for the nine months ended September 30, 1997 
      are not necessarily indicative of the results to be expected for the 
      full year.

      2.    INCOME TAXES:

      Deferred income taxes reflect the net tax effects of temporary 
      differences between the carrying amounts of assets and liabilities for 
      financial reporting purposes and the amounts used for income tax 
      purposes. Significant components of the Company's deferred tax 
      liabilities and assets are as follows (in 000's):

      <TABLE>
          <CAPTION>                                             September        December
                                                                   30,              31,
                                                                  1997             1996 

          <S>                                                       <C>                <C>

          Deferred tax liabilities:
               Fixed maturities                                    $117                $33

               Deferred policy acquisition costs                  5,741              6,366.
                                                                                        00

               Other                                                318                359
                                                                  6,176              6,758

          Deferred tax assets:

          Future policy benefits and financial                    5,158              5,796
          reinsurance
               Net operating loss carryforwards                   1,794              1,589

               Other                                                399                301

                                                                  7,351              7,686
               Valuation allowance for deferred tax              (1,224)            (1,224)
          assets

                                                                  6,127              6,462

          Net deferred tax liability                                $49               $296

                                                                                          
         </TABLE>

                      CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)


      2.    INCOME TAXES (CONTINUED):

            Significant components of the provision for income taxes are as
            follows (in 000's):

      <TABLE>

          <CAPTION>                                Nine months                     Three Months
                                               1997            1996             1997           1996

          <S>                                     <C>             <C>              <C>            <C>          
          Current:

               Federal                         ($609)          ($435)           ($121)          ($48)               
               State                              82               5               31            (80)

               Total current                    (527)           (430)             (90)          (128)


          Deferred                              (301)            (10)            (141)          (235)

          Income tax benefit
                related to

                operations                      (828)           (440)            (231)          (363)
          Income tax expense

                (benefit) included
                discontinued

                     Current                     (47)            305               12            122  
                     Deferred                    (26)            (23)             (26)           (77)  

                                                 (73)            282              (14)            45  


          Total income tax benefit             ($901)         ($158)            ($245)         ($318) 
                
         </TABLE>

                      CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)


      2.    INCOME TAXES (CONTINUED):

      The reconciliation of the provision for income taxes and the amount which
      would have been provided at statutory rates is as follows (in 000's):

      <TABLE>

 <CAPTION>                                                         1997               1996
                     <S>                                            <C>                 <C>
 Loss from continuing operations

     before income tax benefit                                    ($1,909)             ($1,766)



 Income tax benefit at 34% statutory rate on
      pre-tax loss                                                  ($649)               ($600)
 
 Dividends received deduction                                        (149)                (114)

 Effect of rate difference on net operating loss                       (4)                 242
 carryback
 State income taxes                                                    54                   16

 Items not includable for tax purposes                                 28                   68

 Other, net                                                          (108)                 (52)


 Actual income tax benefit                                          ($828)               ($440)<PAGE>





         3.    COMMITMENTS AND CONTINGENCIES:

      In August 1997, the Company received a notice of proposed adjustment from
      the Internal Revenue Service as a result of a recently completed tax
      examination for the years ended December 31, 1992 and 1993.  The Company
      is currently seeking to have the adjustment rescinded.  Based on the
      current status of this matter, the Company does not believe it is 
      probable that a material amount of additional taxes will be due.

      In connection with the cancellation of a joint venture agreement in 1996,
      the Company had agreed to pay $500,000 in cash to its former joint 
      venture partner at the time the merger with LaSalle Group, Inc. (LaSalle) 
      was consummated. As a result of the termination of the merger agreement, 
      as discussed in Note 5, the $500,000 payment will not be made. The 
      agreement with the joint venture partner provides that in the event the 
      merger with LaSalle was not completed, any payment to the joint venture 
      partner would be determined under a separate calculation as follows: 
      (a) if the Company enters into a transaction similar to the LaSalle 
      transaction in which it is acquired by or merged with another entity, the 
      parties have agreed to negotiate a mutually acceptable termination price;
      (b) if the Company enters into a transaction whereby, as part of a plan 
      to terminate its insurance operations and sell all of its

                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)

      3.    COMMITMENTS AND CONTINGENCIES (CONTINUED):

      assets, it sells its credit insurance marketing organization to an
      unrelated third party, the Company has agreed to pay its former partner a
      pro rata share of the proceeds, if any, it receives from the sale of the
      marketing organization. The Company agreed to make such payments to the
      joint venture partner as consideration for terminating the venture, which
      will allow the Company or its successors to retain the profits or losses
      on credit insurance premiums previously reinsured to the partner.

      Reinsured risks would give rise to liability to the insurance 
      subsidiaries only in the event that the reinsuring company might be unable 
      to meet its obligations under the reinsurance agreements in force.

      In March 1997, the Company received a demand for arbitration and 
      statement of claim from a former general agency with whom the Company 
      had a partnership agreement. The partnership agreement provided that the 
      agency would market universal life insurance business for the Company, 
      pursuant to specific criteria established by the Company, and would also 
      be entitled to a share of the profits, if any, which arose from the 
      business produced. The claimant is seeking monetary damages to 
      compensate it for the Company s alleged failure to share profits and for 
      other alleged losses resulting from the Company s rejection of policy 
      applications involving unacceptable risks. While management believes 
      this claim is completely without merit and intends to vigorously defend 
      itself in this matter, the ultimate outcome of this claim cannot be 
      determined at this time.

      In connection with the sale of the business and related operating assets
      of Interstate Auto Auction, Inc. in November 1996, the Company provided
      the buyer with limited indemnifications with respect to certain potential
      environmental liabilities asserted within two years from the closing date.      
      The Company does not believe that these limited indemnifications will 
      have a materially adverse effect on the Company s financial position or 
      results of operations.

      Certain claims, suits and complaints arising in the ordinary course of
      business have been filed or are pending against the Company or its
      subsidiaries. In the opinion of management, based on opinions of legal
      counsel, adequate reserves, if deemed necessary, have been established 
      for these matters and their outcome will not result in a significant 
      effect on the financial condition or future operating results of the 
      Company or its subsidiaries. The Company has taken certain income tax 
      positions in previous years that it believes are appropriate. If such 
      positions were to be successfully challenged by the Internal Revenue 
      Service, the Company could incur additional income taxes as well as 
      interest and penalties.
      Management believes that the ultimate outcome of any such challenges will
      not have a material effect on the Company s financial statements.



                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)

      4.    REINSURANCE:

            The effect of reinsurance on premiums written and earned for the
            periods ended September 30, 1997 and 1996 was as follows:

      
</TABLE>
<TABLE>
 <CAPTION>                     1997                              1996

 (in 000's)          Written           Earned          Written           Earned

 <S>                       <C>              <C>              <C>              <C>
 Direct               $21,408          $23,931          $25,531           $25,340

 Assumed                  734            1,068            1,742             1,787

 Ceded                 (4,449)          (9,376)         (10,761)            1,145


 Net                  $17,693          $15,623          $16,512           $15,677


         </TABLE>

      Ceded benefits incurred through September 30, 1997 and 1996 are 
      $4,567,904 and $7,622,896, respectively.  These losses were deducted 
      in arriving at death and other benefits and the increase in future 
      policy benefits in the Consolidated Statements of Operations.

      5.    OTHER DEVELOPMENTS

      On July 25, 1997, the Company terminated its merger agreement with 
      LaSalle because, despite continued assurances to the contrary, LaSalle 
      was unable to provide the cash funds necessary to complete the merger 
      transaction, which would have provided the Company s common shareholders 
      with cash of $3.78 per share.  On July 28, 1997, the Company signed a 
      letter of intent to sell its credit insurance operations, which includes 
      its inforce block of credit insurance policies and its marketing 
      organization and customer accounts to Life of the South Corporation.  
      The sale transaction is subject to insurance regulatory approval and the 
      approval of the Company s shareholders.  The original letter of intent 
      was amended in September 1997 to modify certain aspects of the proposed 
      transaction.

      The selling price for the marketing organization is contingent upon the
      amount of premiums produced by the Company s current customer accounts in
      the future and will be received over a five-year period.  During this
      period, the Company intends to liquidate its remaining assets and pay all
      creditors and preferred shareholders.  All remaining assets will then be
      distributed to the Company s common shareholders.  However, if prior to
      completing the liquidation process, the Company receives an offer or
      offers to sell, merge or otherwise combine the Company with another
      organization which the Board of Directors believes are more favorable to
      the shareholders, the Company will pursue these potential transactions in
      lieu of a liquidation.


                   CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                      (UNAUDITED)


      5.    OTHER DEVELOPMENTS (CONTINUED)

      If the sale of the Company s inforce block of insurance business is
      completed on the terms which have been agreed to, the transaction is
      expected to result in a significant loss to the Company.  The after-tax
      loss is estimated to be between $3.7 million and $4.2 million.  No
      provision for the estimated loss has been made in the September 30, 1997
      financial statements because the transaction is still subject to the
      execution of definitive agreements, insurance regulatory approval and
      shareholder approval.


              ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                           OPERATIONS AND FINANCIAL CONDITION

                                       OVERVIEW

      The Company reported net income of $102,000 (a loss of $.01 per share) in
      the third quarter of 1997 compared to a net loss of $225,000 ($.13 per
      share) in the same period of 1996. For the first nine months of 1997, the
      Company's net loss increased to $1.2 million ($.60 per share) compared to
      an $891,000 loss ($.47 per share) in 1996.  However, the year-to-date loss
      from continuing operations improved slightly from $1.3 million in 1996 to
      $1.1 million in the current year.  The reduced loss is attributable to
      higher income tax benefits than in 1996.  A more detailed discussion of
      the operating performance of the Automotive Resource Division and a brief
      discussion of certain items which affected the Company's two discontinued
      businesses are presented later in this analysis under Results of
      Operations.

      The Company's planned merger with LaSalle Group, Inc. was terminated on
      July 25, 1997 as a result of LaSalle's inability to provide the funding
      necessary to complete the merger transaction.  On July 28, 1997, the
      Company signed a letter of intent to sell its credit insurance operations
      and its principal insurance subsidiary to Life of the South Corporation, 
      a Georgia-based insurance holding company with administrative offices in
      Florida.  Closing on the transaction is subject to the execution of
      definitive agreements, insurance regulatory approval and the approval of
      the Company's shareholders.  The Company intends to liquidate its
      remaining assets, pay all creditors and preferred shareholders and
      distribute the remaining cash to its common shareholders.  Since the
      selling price for the Company's marketing organization will be received
      over a five-year period, the final distribution to common shareholders
      cannot be made until the end of the five-year period. The planned sale of
      the Company's insurance operations and the liquidation of its remaining
      assets are essential to preserving shareholder value in light of the      
      continuing losses the Company has incurred in recent years.  If, prior to
      completing this liquidation process, the Company receives an offer or
      offers to sell, merge or otherwise combine the Company with another
      organization which are viewed by the Board of Directors as more favorable
      to the Company's shareholders, the Company will pursue these potential
      transactions.

      If the sale of the Company s inforce block of insurance business is
      completed on the terms which have been agreed to, the transaction is
      expected to result in a significant loss to the Company.  The after-tax
      loss is estimated to be between $3.7 million and $4.2 million.  No
      provision for the estimated loss has been made in the September 30, 1997
      financial statements because the transaction is still subject to the
      execution of definitive agreements, insurance regulatory approval and
      shareholder approval.


      The following table presents year-to-date and third quarter revenues and
      operating results for 1997 and 1996.  All amounts relating to the
      Individual Life Insurance Division and the Auto Auction Division for 1996
      have been presented as discontinued operations for comparative purposes.

      <TABLE>
 <CAPTION>                                               Nine months                      Third Quarter

 (in thousands, except per share amounts)            1997            1996             1997            1996

 <S>                                                    <C>              <C>             <C>             <C>
 Total revenues by source:

      Premiums written                              $20,535          $24,328          $7,055          $7,817

      Net investment income                           1,589            1,578             450             540

      Realized investment gains (losses)                224             (158)            (22)           (136)
      Fees and other income                             903            1,070             360             317



                                                    $23,251          $26,818          $7,843          $8,538


 Pre-tax loss from continuing operations:

      Automotive Resource Division                  ($2,162)         ($1,392)          ($230)          ($462)

      Other                                              29             (216)            130             (46)


                                                     (2,133)          (1,608)           (100)           (508)

      Realized investment gains (losses)                224             (158)            (22)           (136)


 Pre-tax loss from continuing operations             (1,909)          (1,766)           (122)           (644)

 Income tax expense (benefit)                          (828)            (440)           (231)           (363)


 Income (loss) from continuing operation             (1,081)          (1,326)            109            (281)


 Discontinued operations, net of income                (125)             435              (7)             56
 taxes<PAGE>

 Net income (loss)                                  ($1,206)           ($891)           $102           ($225)




 Income (loss) per common share:

        Loss from continuing operations              ($0.55)         ($0.64)         ($0.01)         ($0.01) 
        Discontinued operations                       (0.05)           0.17                                  



        Net loss                                     ($0.60)         ($0.47)         ($0.01)         ($0.01) 




                                    RESULTS OF OPERATIONS

      The Company's pre-tax operating results can be best understood through an
      analysis of each of its business units. The Automotive Resource Division,
      the Company's core business, is now the only continuing business segment.
      The Division's principal product is credit insurance, which it markets
      primarily through automobile dealers in six key states. It also markets
      automobile extended service contracts in a general agency capacity and
      generates other revenues from services it provides to its 900 automobile
      dealer customers. The Individual Life Insurance Division has not written
      any new business since 1992. The Company completed the sale of the
      Division's remaining block of insurance business on March 27, 1997 in a
      transaction which was effective January 1, 1997.  Auto auction operations
      were conducted through the Company's subsidiary, Interstate Auto Auction,
      Inc. until the sale of Interstate's business and related operating assets
      in late 1996.    

      CONTINUING OPERATIONS - AUTOMOTIVE RESOURCE DIVISION

      Credit insurance premiums in the third quarter decreased by 9% to $7.1
      million.  For the year, written premiums totaled $20.6 million, which is 
      a 14% drop from the $24.0 million in revenues reported in the first nine
      months of 1996.  A significant portion of the decline in revenues is
      attributable to the cancellation of unprofitable business by the Company.
      In mid-1996, the Company cancelled all of its business in the state of
      North Carolina.  Later in that year, all of the accounts in Tennessee and
      certain unprofitable accounts in Virginia and Ohio were also cancelled. 
      However, even without the effects of the cancelled business, the
      Division's credit insurance premium production is significantly below 
      pre-1990 levels due to the declines which occurred during the economic
      recession of the early 1990's and due to the increase in automobile
      leasing, for which credit insurance is generally not sold. A consequence
      of the decline in written premiums has been a reduction in earned
      premiums, which in turn has resulted in a substantial increase in
      operating expense ratios.  Higher expense ratios are a key reason for the
      unprofitable operating results the Division has experienced in recent
      years.

      Although the Division's pre-tax operating results improved slightly in 
      the third quarter, year-to-date results declined significantly from a 
      $1.4 million loss last year to a 2.2 million loss in 1997. The decline 
      is the result of higher credit insurance claims ratios for both life and
      disability business.  Lower expenses partially offset the higher claims. 
      A decrease in earned premiums due to a decline in the written premium
      base, as discussed above, also contributed to the poorer results.      
      
      The continued unprofitable results in this Division have led to the
      planned sale of the Company's credit insurance operations (consisting of
      its inforce block of business and its marketing organization and customer
      accounts) to Life of the South Corporation, as discussed above.

      DISCONTINUED OPERATIONS - INDIVIDUAL LIFE INSURANCE DIVISION

      As indicated above, effective January 1, 1997, the Company sold its
      remaining block of individual life insurance business. The Company
      continued to administer the business for the purchaser through June 1997
      and received an administrative fee to cover its expenses. In March, the
      Company sold approximately $8.3 million in bonds in order to close the
      transaction and deliver to the buyer cash and other assets sufficient to
      cover the policy liabilities on the business less the buyer's purchase
      price.  

      Those sales resulted in a loss of approximately $123,000, which has been
      included with discontinued operations as an additional loss on the
      disposal of the business. The after-tax loss on the disposal of 
      this discontinued business had originally been estimated to be
      approximately $914,000, which was included in the Company's 1996 
      financial statements.   

      DISCONTINUED OPERATIONS - AUTO AUCTION DIVISION

      In late 1996, the Company sold the auto auction business and related
      operating assets (property and equipment and inventories) of Interstate
      Auto Auction for cash of $4.85 million. The Division's net income for the
      first nine months of 1996, which excludes any continuing overhead, was
      $248,000. This amount has been presented in the current financial
      statements as income from discontinued operations. Approximately $1.7
      million of the proceeds from the sale of the auto auction business was
      used to repay the remaining amount due on the Company's bank loans. The
      Company also contributed $1 million of the proceeds to its principal
      insurance subsidiary. 

                                  FINANCIAL CONDITION


</TABLE>
<TABLE>
 <CAPTION>(in thousands, except per share              September 30,             December 31,
 amounts)                                                   1997                     1996

 <S>                                                              <C>                       <C>
 Invested assets                                              $41,159                   $51,189


 Total assets                                                 $91,490                  $114,619


 Total debt                                                        $0                        $0


 Total shareholders' equity and redeemable
 preferred stock                                              $11,917                   $13,343


 Shareholders' equity per common share                          $2.79                     $3.31

         </TABLE>

      INVESTED ASSETS

      Invested assets at September 30, 1997 were $41.2 million compared to 
      $51.2 at the end of 1996.  A substantial portion of the decline is the 
      result of the settlement on the sale of the individual life insurance 
      business, in which the Company transferred approximately $8.8 million in 
      cash and investments to the buyer. In addition, the invested asset base 
      at year-end included approximately $500,000 which was required in the 
      first quarter of 1997 to pay the Federal and state income taxes on the 
      gain from the sale of the auto auction business in 1996.  

      The Company s bond portfolio is carried at fair value (which approximates
      amortized cost at September 30, 1997) pursuant to the requirements of
      Statement of Financial Accounting Standards No. 115, based on the
      Company's determination that all of its bonds should be considered as
      "available-for-sale", although the Company has no current intentions to
      sell any of these securities. The unrealized appreciation or depreciation
      on available-for-sale securities is reported as a separate component of
      shareholders' equity.  The planned sale of the Company s credit insurance
      business, as discussed previously, will result in the sale of
      substantially all of the Company s bond investments,  since the Company
      must deliver cash to the buyer to cover the difference between the policy
      reserve liabilities being transferred and the buyer's purchase price.

      LIQUIDITY

      The Company's operating subsidiaries have historically met most of their
      cash requirements from funds generated from operations, although reduced
      credit insurance revenues over the past several years have had an adverse
      impact on the insurance companies' operating cash flows. The Company has
      generally relied on its operating subsidiaries to provide it with
      sufficient cash funds to maintain an adequate liquidity position. In that
      regard, the life insurance subsidiaries are also subject to restrictions
      imposed by law on their ability to transfer cash to the Company in the
      form of dividends, loans or advances.  Consumers Car Care Corporation
      provides the Company with sources of cash which are not subject to
      insurance regulations that restrict its ability to transfer cash. 
      Similarly, prior to the sale of its business, Interstate Auto Auction 
      also provided an unrestricted source of cash. The net cash provided by 
      or used in operating activities for the nine months ended September 30, 
      1997 and 1996 is presented in the Consolidated Statements of Cash Flows.

      CAPITAL RESOURCES

      The Company's total equity, including redeemable preferred stock,
      decreased by approximately $1.4 million in the first nine months of 1997.
      The decrease is attributable to the year-to-date loss of $1.2 million and
      $316,000 in dividends paid to preferred shareholders.  Offsetting these
      decreases is a $160,000 increase in the value of the Company's bond
      portfolio.  Shareholders' equity per common share dropped from $3.31 at
      year end to $2.79 at September 30, 1997.

      The insurance subsidiaries utilize reinsurance agreements to finance 
      their credit insurance operations and maintain adequate levels of 
      statutory capital and surplus.  These agreements minimize reductions of 
      statutory capital and surplus which result from new premium production.

                              PART II.  OTHER INFORMATION

      ITEM 1.  LEGAL PROCEEDINGS

      Except for the matters discussed in Note 3 of the Notes to Consolidated
      Financial Statements included elsewhere in this Form 10-Q, neither the
      registrant nor its subsidiaries are involved in any pending legal
      proceedings other than routine litigation incidental to the normal 
      conduct of its business nor have any such proceedings been terminated 
      during the three months ended September 30, 1997.

      ITEM 2.  CHANGES IN SECURITIES

      During the three months ended September 30, 1997, there have been no
      limitations or qualifications, through charter documents, loan 
      agreements or otherwise, placed upon the holders of the registrant's 
      common or preferred stock to receive dividends.

      ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      The registrant has not defaulted in the payment of principal, interest or
      in any other manner on any indebtedness and is current with all its
      accounts.  There is no arrearage in the payment of dividends on the
      registrant's preferred stock.

      ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of the stockholders of the registrant
      during the three months ended September 30, 1997.

      ITEM 5.  OTHER INFORMATION

            None

      ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits required to be filed by Item 601 of Regulation S-K:

                  (11)  Computation of Earnings per Common Share.

            (b)   Reports on Form 8-K:

             On August 11, 1997, the registrant filed a Form 8-K to report the
             July 25, 1997 termination of the Merger Agreement with LaSalle
             Group, Inc. as a result of LaSalle s inability to provide the
             funding necessary to complete the merger transaction.  The August
             11 filing also reported that the registrant had signed a letter of
             intent to sell its credit insurance operations to Life of the 
             South Corporation.

                                      SIGNATURES



      Pursuant to the requirements of the Securities Exchange Act of 1934, the
      registrant has duly caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.



                                          CONSUMERS FINANCIAL CORPORATION
                                                 Registrant




      Date   November 14, 1997            By  /S/ James C. Robertson 
                                                James C. Robertson, President
                                                (Chief Executive Officer)




      Date   November 14, 1997            By /S/ R. Fredric Zullinger
                                                R. Fredric Zullinger
                                                Senior Vice President, Chief
                                                Financial Officer and Treasurer