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![handle is hein.congrecreports/crptxaatf0001 and id is 1 raw text is: AUTHENTICATEO
U.S. GOVERNMENT
INFORMATION
Gp
115TH CONGRESS REPORT
1st Session HOUSE OF REPRESENTATIVES 115-384
RISK-BASED CREDIT EXAMINATION ACT
NOVEMBER 3, 2017.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
[To accompany H.R. 3911]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 3911) to amend the Securities Exchange Act of 1934 with
respect to risk-based examinations of Nationally Recognized Statis-
tical Rating Organizations, having considered the same, report fa-
vorably thereon without amendment and recommend that the bill
do pass.
PURPOSE AND SUMMARY
On October 2, 2017, Representatives Ann Wagner and Bill Foster
introduced H.R. 3911, the Risk-Based Credit Examinations Act of
2017, which amends the Securities Exchange Act of 1934 (Ex-
change Act) to make risk-based the annual reporting requirements
of the Nationally Recognized Statistical Rating Organizations
(NRSROs).
BACKGROUND AND NEED FOR LEGISLATION
The credit rating agencies-NRSROs-have received a healthy
and deserved dose of criticism for their failures in both precipi-
tating and accelerating the financial crisis. In the years leading up
to the crisis, the government adopted a series of policies that had
the effect of conferring a Good Housekeeping seal of approval on
the credit rating agencies and their products, including designating
certain agencies as nationally recognized and hard-wiring ref-
erences to their ratings into numerous Federal statutes and regula-
tions. These regulatory privileges and the perception that the gov-
ernment had placed its imprimatur on the rating agencies' assess-
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