Credit Reporting Agencies under investigation by SEC?

[Anonymous]

SEC Cox said the CRAs, mortgage lenders etc. were under investigation with the whole sub-prime mess.  At least that's what I could swear I just heard at the Senate Banking Committee hearing.  Anyone have any information about this?    Im searching online for more info.

[Anonymous]

Okay, I found that part of his speech.

"

Testimony Concerning Turmoil in U.S. Credit Markets: Recent Actions Regarding Government Sponsored Entities, Investment Banks and Other Financial Institutions

by Chairman Christopher Cox
U.S. Securities and Exchange Commission

Before the Committee on Banking, Housing, and Urban Affairs, United States Senate September 23, 2008

Excerpt

Our subprime enforcement efforts fall primarily into three broad categories: first, subprime lenders; second, investment banks, credit rating agencies, insurers and others involved in the securitization process; and third, banks and broker-dealers who sold mortgage-backed investments to the public.

We are investigating whether mortgage lenders properly accounted for the loans in their portfolios, and whether they established appropriate loan loss reserves. In connection with the sale of mortgage-backed securities and collateralized debt obligations, we are investigating the role of the various parties involved in the securitization process. Among other things, we are focused on whether lenders adequately disclosed the risk profiles of underlying loans, whether they valued their portfolios appropriately, and whether they made adequate risk disclosures to investors. We are also investigating whether investment banks and broker-dealers defrauded retail customers by making false representations, or by putting investors into unsuitable mortgage-backed investments."

The entirety is here: 

Edit:  Hmm...it showed up as credit reporting agencies on the CNN screen.  Does credit rating agencies still mean credit reporting agencies or are these different entities?  I don't know anything about the stock market and hope someone will come by to translate some of this into english I can understand (his entire speech).  lol

Message Edited by shawtycat on 09-23-2008 11:41 AM

Message Edited by shawtycat on 09-23-2008 11:42 AM

[athensguy]

Credit Rating Agency

[MattH]

Credit Reporting Agencies are the companies that collect data on individuals, and they have very little to do with the current mess. Credit Rating Agencies (Standard and Poor's, Dun and Bradstreet, Moody's, etc.) report on the creditworthiness of companies. They gave implausibly high ratings to a lot of the toxic debts that are imploding now.

[cobra19]

SEC Chairman Cox said..............?

The guy has zero credibility. He should just go back to sleep until January.

[Anonymous]

Thanks.  Now I know why Amex asked if I was listed on S&P.  Had no idea what that was and no idea that Businesses had separate credit bureaus.  I don't think mine applies though, looks like its for those really, really huge corps.  Im just a little guy.