U.S. Sen. Al Franken is pushing legislation that he says would reduce conflicts of interest between securities issuers and credit rating companies.
As it now stands, companies offering securities select and hire a credit agency to come up with a rating for their product. That leaves ratings companies competing for business -- and vunerable, critics say, to issuing higher ratings than they should in hopes of getting future business.
Franken, a DFLer from Minnesota, cites problems with once top-rated sub-prime mortgage-backed securities. Franken says creating an independent board to assign the ratings would result in more reliable ratings.
"What this will do is incentivize accuracy in these credit rating agencies," said Franken. "So we'll have more accurate ratings and we won't have this corruption."
Franken's office says Sen. Chuck Grassley of Iowa is one of two Republicans now supporting his amendment.