As the House Financial Services Committee finishes its long slog through financial regulatory reform, all eyes are on Sen. Chris Dodd (D-Conn.), chairman of the Banking, Housing and Urban Affairs Committee.

Dodd and Banking ranking member Richard Shelby (R-Ala.), along with Treasury Department officials, have been in negotiations over the substance of the financial regulatory overhaul bill for months. But Dodd, who introduced a sweeping regulatory reform bill last week, is now expected to move forward without Shelby, according to lobbyists familiar with the ongoing talks between the Senators.

Dodd’s proposal takes a more aggressive approach than the Obama administration and the House bill, in that it strips power from the Federal Reserve. It also consolidates banking oversight from four agencies into a single bank regulator. Dodd would also strip current regulators of their consumer-watchdog role, giving authority to the newly created Consumer Financial Protection Agency. His plan would also create an independent board to identify risk in the financial system and grant shareholders more influence over the companies they invest in, including decisions on executive compensation.

Shelby has supported giving less authority to the Federal Reserve, but he opposes separating consumer protections into a different agency.

While the financial industry has increased its lobbying force heavily on the House side, there will be an even more intense push in the Senate as banking and insurance lobbyists, consumer advocates, and others try to make the bill more palatable to their causes.

K Streeters say they expect to have more success modifying and moderating financial reform in the Senate.

Scott Talbott of the Financial Services Roundtable said the heated debate on the House side will give way to more restraint in the Senate. “It’s a very different approach,— Talbott said. “The reality is each Senator has so much power. … The Senate is the saucer that cools the tea.—

Talbott has been lobbying for several changes to House Financial Services Chairman Barney Frank (D-Mass.) and the Obama administration’s plans, including limiting the power of the consumer protection agency and keeping the Federal Reserve as the banking industry’s regulator.

Other industry groups, including retailers and manufacturers with industrial lending arms and credit card banks, have already turned their attention to the Senate. The House bill grandfathers in existing industrial lending arms, but it will not allow new ones to be created. This affects companies such as Ford, which has an application in to create an industrial loan corporation. Ford competitors Toyota and BMW already have ILCs, and the automaker and other retailers are lobbying the Senate to try to tweak any provisions on systemic risk that would limit the use of these financial tools.

Lobbyists are also keeping Dodd’s tough re-election bid in mind. The Connecticut Democrat has been less sympathetic to industry priorities as he has focused on being more consumer-minded to try to win votes, according to financial services lobbyists.

One concrete example they point to is earlier this fall, when Dodd publicly said he would like to pass an interchange bill that would address the fees that credit card companies charge.

Consumer advocates are counting on Dodd to help push back on industry’s attempt to narrow reform. Groups such as Americans for Financial Reform have already started reaching out to the Banking panel’s staff to establish a dialogue on specific financial reform issues.

In particular, the AFR is hoping to maintain the consumer protection agency’s viability and also push back on concessions that were made in the House exempting auto dealers from oversight by the CFPA.

“We intend to fix those before it’s final,— said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Groups.

But industry lobbyists’ concerns over Dodd’s populist stance may be mollified if he is unable to get Shelby on board with his bill. “When they get together and they agree, major things happen,— one industry lobbyist said. But if there are major disagreements and the bill has to move forward without Republican support, Shelby is likely to use his perch to slow the process down, the lobbyist said.