Franken credit rating amendment in jeopardy

An amendment to a federal financial reform bill that would eliminate conflicts of interest in the credit rating industry is being threatened by House Democrats. Authored by Sen. Al Franken, the amendment has picked up significant bipartisan support and would direct the Securities and Exchange Commission to oversee the credit rating industry, which Franken says has given favorable ratings to institutions in exchange for payment. Rep. Barney Frank says he wants to strip the amendment in order to study the issue.

But Franken isn’t backing down. His spokesperson Jess McIntosh said reform must happen now.

“We know what went wrong with Wall Street’s credit rating system — conflicts of interest eroded it by rewarding cozy relationships instead of accuracy,” McIntosh said in a statement. “And we know how to fix it — the Franken amendment that passed the Senate with broad bipartisan support,” she said.

“You can be sure that if such a study came back, it would confirm the conflicts of interest. It just makes more sense to end the delay and instate the reform now.”