The Senate Banking Committee has set a March 7 target date to hold a hearing on how or whether to bring more competition to the credit ratings space. A spokesman for the panel refused to discuss who will be asked to testify. It is understood, however, that the panel is interested in the Securities and Exchange Commission's opinion on what kind of remedy is needed to change an industry where Moody's Investors Service and Standard & Poor's are the mainstays.
House lawmakers had already signaled they had made up their minds to legislate. Last year, House Financial Services Committee Chairman Michael Oxley indicated he planned to call a markup on this subject at some point during the first quarter of this year. Last week, Rep. Richard Baker, chairman of the panel's Capital Markets Subcommittee, again mentioned something should to be done about the lack of competition in the credit rating area. A spokeswoman for the Financial Services committee said she could not comment on the timing of the markup until it is announced.
Less is known about the SEC's preferences. Almost a year ago, the agency proposed letting firms qualify to act as credit raters via a self-executing procedure. That plan, however, did not move forward; it ran into criticism from the Investment Company Institute and the Commission went through a change of leadership mid-year. An SEC spokesman declined to comment.