National Economic Council Director Gary Cohn, left, and senior adviser Jared Kushner listen to President Trump deliver opening remarks during a meeting with business leaders at the White House on Jan. 23. (Chip Somodevilla/Getty Images)

This story has been updated.

White House economic adviser Gary Cohn told lawmakers this week that he supports a potential breakup of the country's big banks, a step that would force a sweeping restructuring of the way Wall Street works.

The issue emerged in a meeting between Cohn, the head of the powerful National Economic Council, and several members of the Senate Banking Committee earlier on Wednesday. Sen. Elizabeth Warren (D -Mass.), a longtime critic of Wall Street, asked Cohn whether the Trump administration planned to follow through with a campaign promise to separate traditional commercial banking from Wall Street investment banking, according to two people briefed on the conversation who spoke on the condition of anonymity because they were not authorized to discuss the private get-together.

Cohn said he was open to those discussions, which would largely revolve around a revival of the Glass-Steagall Act, a Depression-era law that restricted the kinds of activities banks could engage in. The meeting was reported earlier by Bloomberg News.

While the Republican 2016 platform called for bringing back Glass Steagall, the banking industry has largely played down the possibility. The idea is popular among many Democrats, but some Republicans have said it would be an unnecessary burden on the financial sector.

Cohn's statements rattled some industry insiders, who said it appeared to show the White House may be more serious about the idea than they initially thought.

“The President spoke to the need for a simplification of the banking system on the campaign trail, what he called a '21st century Glass-Steagall,' to make it easier for businesses to grow and create jobs in their communities," a White House spokesman said in a statement. "Gary Cohn was simply discussing the President's previously stated position.”

The original Glass Steagall Act forbid banks that largely served consumers -- offering checking and saving accounts or making loans --from also being involved in the riskier investment banking world, including helping companies raise money by selling stock.

The law was repealed in 1999, and in the years since, U.S. banks have grown larger and more complex. Banks such as JPMorgan Chase and Bank of America now have trillions in assets with highly intertwined commercial and investment banking operations. Separating those businesses would be costly and time consuming, and could put U.S. institutions at a disadvantage with others around the world, industry experts say.

"There is broad agreement, including among all our bank regulatory agencies, that Glass-Steagall would not have prevented the crisis or the housing market collapse," Rob Nichols, president of the American Bankers Association, said in a statement. "America’s economy depends on banks of all sizes to meet the needs of a large and diverse group of clients, customers and communities.”

Despite the idea growing apparently more popular within the White House there are still many roadblocks, including what form such legislation would take. During his confirmation hearing, Treasury Secretary Steven Mnuchin said he doesn’t support going back to the original version of Glass-Steagall. But, he said, there could be a newer version.

But that would require congressional action and lawmakers haven't made breaking up big banks a priority. "Republicans in particular are far more interested in making regulations easier for banks, not adding new ones. And even that isn’t going to be easy," Ian Katz, financial policy analyst with the research firm Capital Alpha, said in a research note.

Still, a bipartisan group of lawmakers, including Warren and Sen. John McCain (R-Ariz.) pounced on Cohn’s statement and announced Thursday that they would introduce the “21st Century Glass-Steagall Act.”

"For 50 years, the original Glass-Steagall Act helped produce broad-based economic growth and avoid any major financial crisis. The 21st Century Glass-Steagall Act will re-establish the wall between commercial and investment banking and make our financial system more stable and secure,” Warren said.

The legislation is also sponsored by Sens. Maria Cantwell (D-Wash.) and Angus King (I-Maine).

If done correctly, reviving Glass Steagall could reduce the risks posed by "too-big-to fail banks" that can require billions in taxpayer bailouts when they stumble, said Dennis Kelleher, president of Better Markets, a nonprofit advocacy group.

It could also be used to help banks such as Goldman Sachs, where Cohn spent more than 20 years before joining the Trump administration, Kelleher said. Goldman Sachs has traditionally thrived in the investment banking world but the elimination of Glass Steagall introduced new competition from financial institutions such as Citigroup and JPMorgan Chase. The market became even tougher after the financial crisis when the industry faced an avalanche of new regulations, he said.

Bringing back a version of Glass Steagall could force some of Goldman Sachs' competitors out of the lucrative investment banking world, Kelleher said. "It is a brilliant strategy if what Gary Cohn wants is to kill Goldman Sachs' toughest competition," he said.