A key House lawmaker wants to make credit rating agencies – which have been widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities that triggered the financial crisis – responsible for each other’s assessments by holding them collectively liable for inaccuracies.
The new draft bill includes a plan meant to address what critics contend is the crux of the current system’s problem: companies that issue securities – as opposed to investors – pay the agencies for ratings of those securities.
