Federal bank regulators have recommended some modifications in enforcement guidelines for the Truth-in-Lending Act, as it applies to millions of dollars in refunds due consumers for inadvertent mistakes by banks in previous years.

Speaking to a group of black bankers here over the weekend, Comptroller of the Currency John Heimann said an interagency regulatory body that he heads, the Federal Financial Institutions Council, is calling for doubling to one-quarter percent of the total charge any permissible errors made in rounding off charges for a loan. Variations beyond this "tolerance level" would trigger refunds.

In addition, the retroactive date for reimbursements would be shortened.

Rules to correct mistakes under the law -- mostly small interest rate errors -- were developed over two years and were designed to translate violations of the law into cash penalties for banks. The Truth-in-Lending Act was enacted to establish standardized information for loans.

"Unfortunately . . . what began as a simple and sensible idea seems to have grown into a Frankenstein monster over the years," noted Heimann in an address to the National Bankers Association.

Initially, Heimann's office sent out about 2,300 orders to banks requiring refunds. Other banking agencies found several hundred instances of violations at institutions under their supervision.

Because of the complex nature of the alleged violations -- often involving a few dollars per customer -- the guidelines on refunds were met with a storm of adverse reaction in the banking industry, especially because the alleged violations were inadvertent to begin with. The American Bankers Association sought to block forced refunds in a lawsuit.

Moreover, as Heimann has admitted, banking examiners from the federal government failed to uncover the alleged mistakes in normal reviews of bank records.