Republicans and Democrats on the House Financial Services Subcommittee noted that the section of the Dodd-Frank Act relating to credit ratings agencies was one of the few sections of the law to receive bi-partisan support last year.
Senior US regulators say they have identified conflicts between Basel III and parts of the Dodd-Frank Act relating to credit rating agencies. Representatives from the SEC, the Federal Reserve Bank and the Office of the Comptroller of the Currency gave evidence to the House Financial Services Subcommittee on credit rating agencies in Washington on Wednesday.
Federal Reserve Board associate director of banking supervision, Mark Van Der Weide, told the panel that the Reserve Board plans to remove mentions of credit rating agencies from its rules "in the near future", but he said the process was being complicated by Basel III, which does mention credit ratings agencies. Van Der Weide said the Fed had received feedback from the public and commentators saying the act "could lead to distortion in the market". He said commentators had also identified risks associated with alternative credit measures and were concerned changes could adversely impact on smaller banks.
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