Franken, Wicker, Levin Advocate For Credit Rating Agency Reformee To Retain Critical Provision To End Conflicts Of Interest In The Current Wall Street System
Send Bipartisan Letter Urging Conference Committ
Today, Sens. Al Franken (D-Minn.), Roger Wicker (R-Miss.), and Carl Levin (D-Mich.) advocated that the Restore Integrity To Credit Ratings amendment (S.A.3991) be included in the final Wall Street Reform package. The group of Senators includes the author of the credit rating amendment, the first bipartisan co-sponsor, and the Permanent Subcommittee on Investigations Chairman who lead the investigation into the conflicts of interest in Wall Street’s credit rating system.
All sent a letter to the conference committee reconciling the House and Senate versions of the bill. The committee is set to consider the credit rating agency amendment tomorrow, July 15th. Franken’s Restore Integrity To Credit Ratings amendment passed the Senate with 64 votes, including 11 Republicans.
“The amendment’s broad bipartisan support reflects that this approach is not a partisan one – it’s simply a common sense solution. The conflicts of interest in the credit rating industry not only wreaked havoc on Wall Street, but also permeated our entire economy, including the large losses in millions of hard-working Americans’ retirement accounts,” said the Senators.
The proposal ends the conflicts of interest inherent in Wall Street’s current pay-to-play credit rating system. Right now, banks choose which credit rating agencies will rate the quality of their bonds and other financial products, resulting in the agencies giving away undeserved top ratings to countless sub-par financial products in order to attract business.
It cleans up the system by making sure a bank or financial institution can’t shop around among credit rating agencies to get a product’s initial rating. The bipartisan proposal creates a board, overseen by the Securities and Exchange Commission, which will assign credit rating agencies to provide initial ratings in order to eliminate inherent conflicts of interest.
You can read the letter here.