Chris Dodd’s proposal to house a consumer protection agency inside the Federal Reserve, where it already exists, is not exactly getting rave reviews inside the Democratic caucus. At least four Democrats have attacked the idea already, and the plan is not even a day old.

Byron Dorgan and Bernie Sanders told the Hill that the deal stinks on ice:

“It’s a horrible idea. It’s a terrible idea,” Dorgan told The Hill. “I don’t support it and I’ll try to change it.”

Sanders added that the creation of a Fed-based agency “will not preclude me from fighting [against] it through the amendment process or one way or another.” [...]

“Consumers need real, real, real protection. To do that you’re going to need at the very least, a strong consumer agency dedicated just to protecting them,” he told reporters. “Some of us think that the Fed is not primarily there to represent the middle class and working families and the average consumers.”

While Dick Durbin and Sheldon Whitehouse expressed some openness to the proposal in that story, another member of the Senate leadership, Chuck Schumer, joined Dorgan and Sanders in casting doubt on it.

Schumer said he is ” very leery of any consumer regulator being placed inside the Fed [...] In my 20 years of trying to get the Federal Reserve to properly protect consumers, it has been an uphill, and very often unsuccessful, battle,” Schumer said.

Now Sen. Jeff Merkley, who voted against Ben Bernanke’s confirmation for a second term as Fed chair, is out with a statement opposing placing the CFPA at the Fed:

“The Federal Reserve currently has authority over consumer issues, and it has done an abysmal job in standing up for middle class families and small businesses. The Fed’s leadership cares first and foremost about monetary policy – that’s in the penthouse. Safety and soundness considerations come next. Then, way down in the basement is consumer protection. While a new consumer division would presumably have more power and independence, there is no reason to believe that the culture of the Fed will change.

“I applaud Senator Dodd for the work he is doing to bring the financial reform effort to fruition despite a strong lobbying campaign to water it down. Like Senator Dodd, I believe that strong rules ensuring that consumers aren’t sold defective financial products are crucial to making the economy work for middle class families. I look forward to seeing the details of the proposal, but a lot would have to change at the Fed before I would be convinced they can deliver the strong consumer protection our families and our economy need.”

In fact, this is virtually the same statement that Merkley made in an interview with me in December. Nothing since has changed his view.

Needless to say, Democratic support for this proposal will not be easy to gather.

UPDATE: Jack Reed promised to introduce a standalone amendment to establish an independent CFPA. Sherrod Brown has also reacted negatively. So that’s six Dems against the Dodd compromise, so far.