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Elizabeth Warren's Win Changes Little: Street Whispers

Tickers in this article: GS JPM C WFC BRK.A BAC

NEW YORK ( TheStreet) -- Consensus is that after Elizabeth Warren was elected as the next Senator for Massachusetts, the former Harvard Law School professor and figurehead of the Consumer Financial Protection Bureau will use her bully pulpit to dismantle Wall Street mega banks like Citigroup(C) and Bank of America (BAC) .

Were Warren to emerge in the Democratically controlled Senate as the chair of its Banking Subcommittee, many are already envisioning a crackdown that may pressure the likes of Citigroup, Bank of America and even JPMorgan Chase (JPM) to split investment banking businesses from consumer lending operations.

Warren, after all, made it a point of her Senate pitch to Massachusetts voters that she'd consider reinstating the Glass Steagall Act , a post-Depression banking sector reform that split off investment banking from ordinary Main Street lending.

Meanwhile, former administration officials who played key roles in President Obama's first-term banking sector fixes and reforms say that a strong Election Day showing by Senate Democrats augur poorly for banks, while strengthening the mandate for reforms like the 2010 Dodd Frank Act

"Wins by Warren, Sherrod Brown & Grayson means bad day for the banks and a very good day for supporters of real regulatory reform," wrote Neil Barofsky, the former inspector general for the Treasury's Troubled Asset Relief Program , on Twitter.

But industry insiders may be overreacting to Warren's election, in favor of Republican Scott Brown, who was portrayed in a lengthy Businessweek profile as "Wall Street's hope to stop Elizabeth Warren."

Why an Obama Financial Selloff Would be an Investor Gift .

Were Warren to become chair of the Senate's Banking Subcommittee, her impact might be felt most by pushing a completion of Dodd Frank , which could help clarify how banks will earn their way out of a long post-crisis profit slog.

Instead of spending efforts trying to repeal Dodd Frank - as Republican presidential candidate Mitt Romney indicated he'd do -- banks may now take Warren's election and her expected top legislative position on the industry as reason to problem-solve lingering uncertainties and issues surrounding the law.

Already, Jamie Dimon, the head of the nation's largest bank JPMorgan, and Lloyd Blankfein, CEO of Goldman Sachs (GS) have publicly said many parts of Dodd Frank are beneficial to the financial sector, even if the industry generally oppose reform.

Meanwhile, the nation's top performing banks like JPMorgan and Wells Fargo (WFC) , and those on the mend like Bank of America and Citigroup are in their strongest post-crisis position when it comes to capital and normalized earnings. Housing markets are on the rebound , and recent quarterly reports show strong growth in mortgage lending.

Why Goldman Sachs and JPMorgan can fall off the 'fiscal cliff.'

In fact, financial sector bellwethers like Warren Buffett-run Berkshire Hathaway (BRK.A) are also making big acquisitions to boost exposure to a recovering housing market, after previous calls of a housing bottom fell flat.