Al Franken: “I am glad the DOJ is going forward in pursuing this case, but as I said it is not enough. It is backward- looking and…”

“I am glad the DOJ is going forward in pursuing this case, but as I said it is not enough. It is backward- looking and addresses past harms. My concern is that the conduct continues to this day. The credit raters are still influenced by the relationships with the banks because that is who pays them. It is a clear conflict of interest, and we need to prioritize actions that will prevent another meltdown in the future. The Dodd-Frank provision I wrote with Senator Wicker, if implemented in full, would root out the conflicts of interest from the issuer pays model. The amendment we offered and the Senate passed directed the SEC, Securities and Exchange Commission, to create an independent self- regulatory organization that would select which agency--one with the adequate capacity and expertise--would provide the initial credit rating of each structured financial product. The assignments would not be based just on the agency's capacity and expertise but also, after time, on its track record. Our approach would incentivize and reward excellence. The current pay-for-play model--with its inherent conflict of interest--would be replaced by a pay-for performance model. This improved market finally allows smaller rating agencies to break the Big Three's oligopoly. The oligopoly is clear.…”