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House Passes Credit Rating Agencies Bill
FEI Summary
On July 12, 2006, the U.S. House of Representatives passed a credit rating agency bill, “The 2006 Credit Rating Agency Duopoly Relief Act” (H.R. 2990), by a vote of 255-166. The bill would eliminate the Securities and Exchange Commission’s (SEC) ability to designate qualified credit rating agencies. The bill also gives the SEC authority to inspect credit rating agencies and oversee the agencies through an enforcement process.
H.R. 2990 requires that credit rating agencies register with the SEC if they have been in business for three years, if they adopt an approved model to determine ratings and choose to be so acknowledged.
Those opposing the bill argued that the SEC was not given enough opportunity to testify on the issue or offer language for the bill.
Prepared July 13, 2006 by Serena Dávila (sdavila@FinancialExecutives.org) Director, Technical Activities, Financial Executives International (FEI). This summary does not represent FEI opinion, unless specifically noted above.
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