ederal regulators intended to set more stringest standards for credit card lending practices when they recently issued new guidelines.

Some industry experts say, though, that the rules lack the impact of the initial draft submitted for review in July 2002 and won't do enough to eliminate inappropriate practices or to reduce increasing consumer debt and defaults.

The regulators, from a group of four agencies operating under the auspices of the Federal Financial Institutions Examinations Council, which oversees the financial services industry, developed the rules in response to recent examinations that disclosed a number of inappropriate account-management, risk-management and loss-allowance practices.

The guidelines will apply to all banks and thrifts but are aimed at credit card companies that target customers with poor credit histories. According to the Wall Street Journal, some analysts and investors believe that the final version of the guidelines has been diluted from those that were originally drafted and really only benefits the credit card companies.

Three companies that deal with the sub-prime market all posted market gains the day the regulations were issued; Capitol One stock was up 10%, Providian Financial Corp. went up 3.3% and Metris Companies was up 12%.

In particular, the final version of one rule that deals with over-limit fees charged to customers was softened considerably from the earlier proposal. When it was first submitted, regulators were ready to end the practice; financial institutions were allowed to review and respond to the proposed guidelines.

Thanks to successful lobbying, the final rule restricts, not prohibits, those fees, which have been significant revenue generators for the companies. At Capitol One, over-limit fees bring in an estimated $650 million, or 7% of its total annual income.

The agencies (Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision) believe the guidelines will serve the purpose for which they were intended. The regulating agencies also are expecting ongoing full compliance with generally accepted accounting principles and existing interagency policies as well as with the new rules.