Sen. Al Franken, D-Minn., on Wednesday urged Senate and House conferees on the financial regulatory overhaul legislation to keep his amendment on credit-rating-agency assignment.
Speaking at a teleconference, Mr. Franken said he wrote Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., asking for his support on the amendment in the conference committee, which is expected to begin June 9.
The Senate voted May 13 to include Mr. Franken’s amendment in the Restoring American Financial Stability Act. Mr. Dodd, the primary sponsor of the financial overhaul bill that passed May 20, voted against Mr. Franken’s amendment.
Mr. Franken said under his amendment, which applies only to structured debt, the SEC would create a ratings oversight board whose members would be mainly investors, including representatives of pension and endowment funds. The board, rather than the issuer, would choose a rating agency to conduct the initial evaluation and provide a rating of the debt offering.
The awards would be “based on accuracy rather than incentives to inflate the ratings” to appeal to issuers, Mr. Franken said. “This (amendment) addresses a core problem (conflicts of interest) in the (credit-rating) industry.”
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee and primary sponsor of the House financial reform bill passed Dec. 11, hasn’t indicated his position on Mr. Franken’s amendment. The House bill, which conferees will try to reconcile with the Senate bill, doesn’t contain such an amendment.
Also at the teleconference, Ohio Attorney General Richard Cordray said lobbying on the financial regulatory legislation has been intense from the beginning and “it’s appropriate to be concerned at each new stage” of the legislative process to urge retaining the amendment.
Neither Bryan DeAngelis, spokesman for Mr. Dodd, nor Steven Adamske, spokesman for Mr. Frank, could be reached for comment.
