There would also be a "prudential financial regulator" for the nation's banks, thrifts and credit unions, in place of the five agencies that perform that task now.
The Office of Thrift Supervision, which oversees savings-and-loan banks, would be shut down and folded into the Office of the Comptroller of the Currency, which oversees the nation's banks.
Like just about everything else in an election year, politics will likely have a large part to play in what the ultimate plan looks like.
Republicans have traditionally sought less government oversight, saying that the economy should be left up to free market forces. Democrats, on the other hand, have sought stronger oversight and more government intervention. Those themes are being played out today in the halls of Congress and on the presidential campaign trail.
Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, was already attacking the plan this morning, saying it would do "little if anything to alleviate the current crisis."
House Financial Services Committee Chairman Barney Frank, D-Mass., is working on his own plan to reshape the regulatory maze in Washington. While he said it was a "constructive step forward" he raised some doubts.
CNBC stock picker and host of "Mad Money," Jim Cramer summed up the feelings of some this morning saying: "We all know it's completely meaningless."
But Rep. Vito Fossella, New York Republican who plans to introduce legislation on oversight, said in a statement that Paulson's plan "is a solid blueprint offered at a critical time."
"The blueprint recognizes that to protect investors and provide stability to the markets requires us to modernize and reform the entire system of financial services regulation. We cannot offer stop-gap, Band-Aid fixes," he said. "The only question now is whether Congress will choose to act wisely or veer off towards overregulation."