To remove statutory references to credit rating agencies.

SA 3774. Mr. LeMIEUX submitted an amendment intended to be proposed
to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself
and Mrs. Lincoln)) to the bill S. 3217, to promote the financial
stability of the United States by improving accountability and
transparency in the financial system, to end ``too big to fail'', to

[[Page S3047]]

protect the American taxpayer by ending bailouts, to protect consumers
from abusive financial services practices, and for other purposes;
which was ordered to lie on the table; as follows:

On page 1036, strike line 14 and all that follows through
page 1041, line 3, and insert the following:

SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

(a) Federal Deposit Insurance Act.--The Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.) is amended--
(1) in section 7(b)(1)(E)(i), by striking ``credit rating
entities, and other private economic'' and insert ``private
economic, credit,'';
(2) in section 28(d)--
(A) in the subsection heading, by striking ``Not of
Investment Grade'';
(B) in paragraph (1), by striking ``not of investment
grade'' and inserting ``that does not meet standards of
credit-worthiness as established by the Corporation'';
(C) in paragraph (2), by striking ``not of investment
grade'';
(D) by striking paragraph (3);
(E) by redesignating paragraph (4) as paragraph (3); and
(F) in paragraph (3), as so redesignated--
(i) by striking subparagraph (A);
(ii) by redesignating subparagraphs (B) and (C) as
subparagraphs (A) and (B), respectively; and
(iii) in subparagraph (B), as so redesignated, by striking
``not of investment grade'' and inserting ``that does not
meet standards of credit-worthiness as established by the
Corporation''; and
(3) in section 28(e)--
(A) in the subsection heading, by striking ``Not of
Investment Grade'';
(B) in paragraph (1), by striking ``not of investment
grade'' and inserting ``that does not meet standards of
credit-worthiness as established by the Corporation''; and
(C) in paragraphs (2) and (3), by striking ``not of
investment grade'' each place that it appears and inserting
``that does not meet standards of credit-worthiness
established by the Corporation''.
(b) Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.--Section 1319 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4519) is amended by striking ``that is a nationally
registered statistical rating organization, as such term is
defined in section 3(a) of the Securities Exchange Act of
1934,''.
(c) Investment Company Act of 1940.--Section
6(a)(5)(A)(iv)(I) Investment Company Act of 1940 (15 U.S.C.
80a-6(a)(5)(A)(iv)(I)) is amended by striking ``is rated
investment grade by not less than 1 nationally registered
statistical rating organization'' and inserting ``meets such
standards of credit-worthiness as the Commission shall
adopt''.
(d) Revised Statutes.--Section 5136A of title LXII of the
Revised Statutes of the United States (12 U.S.C. 24a) is
amended--
(1) in subsection (a)(2)(E), by striking ``any applicable
rating'' and inserting ``standards of credit-worthiness
established by the Comptroller of the Currency'';
(2) in the heading for subsection (a)(3) by striking
``Rating or Comparable Requirement'' and inserting
``Requirement'';
(3) subsection (a)(3), by amending subparagraph (A) to read
as follows:
``(A) In general.--A national bank meets the requirements
of this paragraph if the bank is one of the 100 largest
insured banks and has not fewer than 1 issue of outstanding
debt that meets standards of credit-worthiness or other
criteria as the Secretary of the Treasury and the Board of
Governors of the Federal Reserve System may jointly
establish.''.
(4) in the heading for subsection (f), by striking
``Maintain Public Rating or'' and inserting ``Meet Standards
of Credit-Worthiness''; and
(5) in subsection (f)(1), by striking ``any applicable
rating'' and inserting ``standards of credit-worthiness
established by the Comptroller of the Currency''.
(e) Securities Exchange Act of 1934.--Section 3(a)
Securities Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is
amended--
(1) in paragraph (41), by striking ``is rated in one of the
two highest rating categories by at least one nationally
registered statistical rating organization'' and inserting
``meets standards of credit-worthiness as established by the
Commission''; and
(2) in paragraph (53)(A), by striking ``is rated in 1 of
the 4 highest rating categories by at least 1 nationally
registered statistical rating organization'' and inserting
``meets standards of credit-worthiness as established by the
Commission''.
(f) World Bank Discussions.--Section 3(a)(6) of the
amendment in the nature of a substitute to the text of H.R.
4645, as ordered reported from the Committee on Banking,
Finance and Urban Affairs on September 22, 1988, as enacted
into law by section 555 of Public Law 100-461, (22 U.S.C.
286hh(a)(6)), is amended by striking ``credit rating'' and
inserting ``credit-worthiness''.
(g) Effective Date.--The amendments made by this section
shall take effect 1 year after the date of enactment of this
Act.
(1) In general.--Commission shall undertake a study on the
feasability and desirability of--
(A) standardizing credit ratings terminology, so that all
credit rating agencies issue credit ratings using identical
terms;
(B) standardizing the market stress conditions under which
ratings are evaluated;
(C) requiring a quantitative correspondence between credit
ratings and a range of default probabilities and loss
expectations under standardized conditions of economic
stress; and
(D) standardizing credit rating terminology across asset
classes, so that named ratings correspond to a standard range
of default probabilities and expected losses independent of
asset class and issuing entity.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to
Congress a report containing the findings of the study under
paragraph (1) and the recommendations, if any, of the
Commission with respect to the study.
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