August 7, 2013 3:29 PM

Industry wrote provision that undercuts credit-rating overhaul

Moments before the Senate passed a bill to overhaul the credit ratings industry seven years ago, sponsors took turns touting its promise for ending an entrenched oligopoly. The bill, they said, should break the vicelike dominance of three agencies in an industry that serves as a watchdog over the financial system. What’s escaped 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 an official of one of the big three ratings agencies, McClatchy has learned.

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