The bottomline is investors hoping for changes to Dodd Frank are likely to be disappointed. KBW expects the changes to be purely "cosmetic" given Democrats control of the senate. At any rate, any changes are "unlikely to benefit large banks and will be targeted to benefit community banks," says Gardner. Only 133 rules have been finalized so far under Dodd Frank. Another 133 rules have been proposed but are yet to be implemented, while 132 more are yet to be proposed, even though the deadline for some of rules has already passed. Gardner expects the Volcker rule, the first wave of nonbank systemically important financial institution (SIFI) designations, heightened prudential standards for bank and nonbank SIFIs, as well as mortgage and risk retention regulations to see the light of day in early 2013. The analyst also sees a growing role for the Consumer Financial Protection Bureau in 2013, with rules on qualified mortgages likely to be on the top of the agenda. The agency will also likely focus on payday lending and bank overdraft rules by the end of the year. As for mortgage finance, there may be little progress in addressing the issue of winding down Fannie Mae and Freddie Mac and re-privatizing the mortgage market. High on Obama's agenda will be replacing FHFA director Edward DeMarco but Gardner wonders if anyone really wants the job. "Part of the reason why there has been no subsequent nomination is the FHFA directorship is not one of the most sought-after jobs in Washington. While housing and consumer groups want to replace Mr. DeMarco with a director who will aggressively pursue principal write-downs on loans held by or backed by the GSEs, finding a person who wants the job and can get confirmed by the Senate is harder than many realize," says Gardner. "We expect that the Administration will try and find a replacement for Mr. DeMarco but we also think he will remain on the job for several months, maybe into the second half of the year." -- Written by Shanthi Bharatwaj in New York.