27 Aug Industry wrote provision that undercuts credit-rating overhaul
By Greg Gordon | McClatchy Washington Bureau
WASHINGTON — Moments before the Senate overwhelmingly passed a bill to overhaul the credit ratings industry seven years ago, Republican and Democratic sponsors took turns touting its promise for ending an entrenched oligopoly.
The bill, they said, should break the viselike dominance of three agencies – Standard & Poor’s Ratings Services, Moody’s Investors Service and the smaller Fitch Ratings – in an industry that serves as a crucial watchdog over the nation’s financial system.
What’s escaped public scrutiny until now, however, is that the law’s tough criteria defining when a newcomer could join the industry weren’t written by Congress. They were crafted by a yet-to-be-identified official of one of the big three ratings agencies, a former aide to the Senate Banking Committee has told McClatchy.