New York, New York ( TheStreet) --Let the game of cat and mouse begin. Wall Street has always excelled at finding loopholes in the regulatory system. Now that the Dodd-Frank Wall Street Reform and Consumer Protection Act has passed, the banks will begin re-tooling, looking for workarounds and openings where they can squeeze out revenue to replace what's being lost. And the federal agencies that oversee them will be waiting in the wings, according to Harold Reichwald, co-chair of Banking and Specialty Finance at Manatt, Phelps & Phillips, LLP. "It's an interesting thing to contemplate, but the loopholes will cleaned up by the regulatory process," Reichwald says. "The bill delegates an enormous amount
to the agencies. The regulators don't have the same kind of elective pressures put on them so they will have more time to pay attention to loopholes and fix them." Reichwald points out that several of these agencies, which include the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Federal Reserve have been hiring aggressively, and it shouldn't take long for them to propose new regulations that banks will have to abide by. "There will be a good deal of negotiations, so to speak, among these agencies on how these new regulations should be proposed and regulated." If Reichwald is right, banks will have to constantly change to keep up. With the Securities and Exchange Commission flexing some muscle with recent fines on Goldman Sachs ( GS) and now Citigroup ( C), we may be seeing the beginnings of a more combative state of affairs between the regulators and the banks than has been the case in the past. -- Written by Maria Woehr in New York.