Congress Passes Credit Rating Bill

Congress has passed a bill to promote competition in the credit rating industry and set the ground rules for the Securities and Exchange Commission to approve new firms as Nationally Recognized Statistical Rating Organizations."Creating a clear, defined, and accountable registration process for credit ratings firms will reduce prices and anti-competitive practices, improve credit ratings quality, and provide better information for investors," said Rep. Michael Fitzpatrick, the sponsor of the House version of the credit rating agency bill. The credit rating industry is now dominated by Standard & Poor's, Moody's Investors Service, and Fitch Ratings. The Senate passed its rating agency bill (S. 3850) on Sept. 22 by unanimous consent, and the House approved the Senate's version by voice vote Sept. 27. The bill now goes to the president for his signature.