How Wall Street Will Beat the New Financial Regulations

3. Take it Out on the Customers

This is what Bove considers the most odious part of FinReg—the increased costs through regulation and restrictions will simply, he said, be passed onto customers.

Free checking will not exist anymore and customers likely will have to pay $10 to $12 a month to maintain their accounts, he said, meaning some on lower incomes may be forced to close their accounts.

He used Wells Fargo

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[WFC  Loading...      ()   ] as an example of how banks will find numerous ways to pass costs onto customers.

"Wells Fargo claims they have 86 specific businesses. That means there are about 80 businesses that they can increase prices and charges on, which they've already done" Bove said. "Wells Fargo has not been slow to make adjustments to its costs in order to make sure customers bear the burden of increases in regulatory costs."

A host of large banks already have warned that their earnings could be impacted by the new law.

"They're going to find more ways to make it. They're going to put more fees on customers," said Andrew Neale, partner at Fogel Neale Partners in New York. "That's obviously the first line of defense."

4. Be Big

Perhaps the great irony is that a bill designed to prevent banks from becoming too big to fail— a la Lehman Brothers and Bear Stearns—almost ensures the future of behemoth banks.

Banks that lack the capital to survive will be absorbed by their larger brethren, as has already happened 103 times in 2010. The financial crisis provided plenty of templates: JPMorgan Chase

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[JPM  Loading...      ()   ]swallowed Bear Stearns and Washington Mutual; Bank of America

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[BAC  Loading...      ()   ] took in Merrill Lynch; Wells Fargo ate up Wachovia.

"One unforeseen victor is banks are actually much bigger than they were five years ago. Rather than being broken apart, they're bigger and stronger," said Landy, of Allen and Overy. "What it leaves is a situation where you have six huge banks, a bunch of regional banks and thousands of small banks."

A new ratings system on the banks promises to be kinder to the bigger well-capitalized institutions than those struggling their way through the recession, said Chris DiAngelo financial services partner at Dewey and LeBoeuf ion New York.

"The more the government stands behind the bigger banks the better their ratings will be, thus the lower their costs will be," DiAngelo said.

FinReg provides a resolution mechanism to seize and blow up banks that become too big to fail. But Wall Street is betting it stays at least a step ahead of the Washington regulators.

"We have no doubt that the banks are actively looking at the best possible ways to rework their current business models to take advantage of inconsistencies in this legislation," Landy said. "That's their job and that's what they're good at."