The Senate Banking chairman has a more radical idea for restructuring the nation’s banking and insurance industries. By Renuka Rayasam, Associate Editor November 10, 2009 The Obama administration, in its financial reform proposals, backed off of the idea of consolidating banking regulators into a single council. The House never seriously considered the idea. But Sen. Christopher Dodd (D-CT) thinks that’s absolutely the way to go in restructuring the nation's financial architecture. The plan he unveiled this week would combine four banking regulators into one agency. It's an approach that may help Dodd in what’s shaping up as a tough reelection bid next year, but it comes at the high cost of complicating efforts to reform the financial industry.Dodd is eager to shed his image of being too cozy with bankers. He's received more than $8 million from financial firms since 2005, according to the Center for Responsive Politics. Plus he's come under fire for bowing to political pressure from the financial industry. Earlier this year he admitted weakening a stimulus bill provision that allowed insurer AIG, based in his home state of Connecticut, to pay out big bonuses to employees. Dodd’s new financial plan is certainly no sop to bankers, and it may help him show that he is not beholden to them. His sweeping proposal seeks to remake the entire financial services landscape. Banks would report to one powerful regulator that sets capital standards and monitors their overall risk portfolio. They would also have to answer to a consumer protection agency to ensure their lending practices are fair. That’s in addition to creating a more powerful Securities and Exchange Commission, and a host of reforms that curb speculative trading and rein in other major financial firms. In the end, many of Dodd’s proposals won't get very far. In his zeal to prove his populist stripes, Dodd is actually jeopardizing the chances that his bill will ever make through the Senate. It faces stiff resistance from both existing regulators and bank lobby groups. And with the legislative calendar quickly drawing to a close, the Senate has little time to reconcile major ideological differences. Republicans don't like the idea of a consumer protection agency. Even moderate Democrats will oppose stripping the Federal Reserve of its bank supervisory powers and eliminating other regulators. Even if he succeeds in the Senate, Dodd would then have to hammer out a compromise with the House, which has its own plan in the works. Financial reform won’t get to President Obama's desk until early next year. By then, the most ambitious of Dodd's ideas will be long gone. The only regulator that stands of chance of being eliminated is the Office of Thrift Supervision. And a consumer protection agency might have to be significantly watered down to get Republicans on board. Dodd’s staff says they’ve been working on these ideas for months. But if they wanted reform they would have done better to start out with a more pragmatic approach, rather than one that simply puts on a good show.