The Treasury certainly made a big splash when it released its plan to remodel the entire financial services industry and the agencies that supervise it. In fact, the media fuss was so big — starting with the plan’s leak in time to get weekend coverage in The New York Times — that some cynics think that publicity was the whole point.

With a recession under way, a mortgage disaster ruining home prices, a liquidity crisis forcing the rescue of a big Wall Street firm, and financial markets generally in turmoil, why wouldn’t the Treasury want to change the subject?

Whatever Treasury’s intent, the release of its plan certainly got the attention of everyone with an interest in the financial services industry — and most of the reaction was heated.

For instance, one of the plan’s long-term proposals is to lift restrictions on the activities of financial institution holding companies. Camden Fine, president and CEO of the Independent Community Bankers of America, commented, “The federal regulatory agencies did such a great job of examining Citigroup and Bear Stearns that now the Treasury Department recommends that Wal-Mart and other commercial firms be allowed to own FDIC-insured banks.”

For the short term, Treasury proposes creating a new federal agency to evaluate and report on the adequacy of each state’s system for licensing and regulating mortgage originators. Conference of State Bank Supervisors President and CEO Neil Milner said this proposal “disregards the work of state officials who have served as early detectors of instability in the system and would only serve to hinder actions along these lines that are already being taken by the states.”

The proposal’s intermediate goals include “rationalizing” the federal supervision of state-chartered banks — meaning consolidating regulation in a single federal agency, either the Fed or the FDIC. Shelia Bair, chairman of the latter agency, quickly distributed an e-mail to FDIC employees assuring them they would be the likely winner. “I believe that if state-chartered bank regulation were to be consolidated, it would be consolidated under our authority,” she said.

Another intermediate goal is to eliminate the thrift charter. “The thrift charter is a strong point in our financial system,” declared Ed Yingling, CEO of the American Bankers Association. “As long as homeownership remains a high priority . . . we need an industry focused on and dedicated to promoting and financing homeownership. That is why we firmly oppose the recommendation to do away with the thrift charter, which makes housing finance a first responsibility.”

Yingling also took exception to the Treasury’s long-term plan to meld all sorts of depository institutions into a single federal charter. “For nearly 150 years, our dual banking system of state and national banking charter options has been a source of innovation and vitality that has served banking customers well,” Yingling said. “Almost 70% of banks today hold state charters, all of which are jeopardized by the provisions of the blueprint, particularly by the long-term plan.”

On the other hand, ABA’s insurance affiliate praised the Treasury plan for endorsing an optional federal charter for insurance companies — long an ABA goal.