In the meantime, the outlook for the card business is challenging. Credit quality of borrowers won't fully recover until the job market does, and stiff regulation will further push down profits. Issuers will therefore face tough competition for the 'primest' of prime borrowers, a space typically inhabited by American Express ( AXP). Orenbuch said the current environment is "one of the most challenging in the history of the business," predicting "few winners...in 2010." He suggests that investors buy shares of MasterCard ( MA) and Visa ( V), which, as processors, have little exposure to any of the regulatory or credit headwinds. He remains neutral on Capital One and Discover ( DFS), and thinks American Express will underperform because it lacks exposure to the fast-growing debit card business. For diversified lenders, the impact of new rules will certainly be felt in the near-term. But perhaps over the long haul, the CARD Act may actually benefit the banks it sought to redress more than the consumers that it sought to assist. "While the recently instituted CARD Act will reduce near-term profitability, we expect it to lead to a healthier card issuing business with lower credit risk, reducing the sensitivity of the business to economic downturns," William Blair analyst David Long said in a recent report. -- Written by Lauren Tara LaCapra in New York.