Franken’s credit rating amendment pulls in GOP support

MnIndy file photo

Sen. Al Franken has picked up two Republican cosponsors for his amendment to fix the credit rating industry. Sens. Chuck Grassley (R-Iowa) and Roger Wicker (R-Miss.) are backing the bill, saying it would create an important barrier against conflicts of interest in the industry. The amendment is being considered as part of a financial reform package being debated in the Senate.

Franken’s amendment picked up the support of Grassley on Tuesday.

“If the credit rating agencies are going to make a contribution to market integrity, then they can’t be compromised,” he said in a statement. “This amendment creates a firewall so that a rating agency can be selected independent of an issuer. It goes after conflicts of interest between rating agencies and issuers, and that’s a very important area where due diligence was missing leading up to the financial crisis of 2008.”

Grassley joins Wicker, who last week praised Franken for introducing the amendment and signed on as a cosponsor.

“Credit-rating agencies have made so many mistakes in the past, and we must assure their ratings are accurate,” Wicker said. “A well-functioning marketplace requires an accurate and credible credit-rating system because it is the primary signal investors use to assess the creditworthiness of certain investments. In the past, rating agencies were too willing to rubber-stamp an excellent score for complex securities that were not well-understood and were not deserving of a triple-A rating.”