Rep. Brad Sherman, D-Calif., is urging House conferees on a regulatory reform bill to support a Senate-passed amendment aimed at reforming the credit rating process that led to 'AAA'-ratings for subprime mortgage-backed securities that have subsequently faced several waves of downgrades.

The amendment by Sen. Al Franken, D-Minn., directs the Securities and Exchange Commission to create an independent panel that selects the credit rating agency for initial ratings of MBS.

Sen. Franken said his amendment attracted the support of nine Republican senators because it addresses the conflicts of interest in allowing issuers to shop for the best rating. Rep. Sherman offered a similar amendment during a House Financial Services Committee markup of a similar bill but it was not accepted.

The committee chose to go with a study instead. "I don't think we need another study," Sherman said.

Attempts to get a response from rating agencies had not been successful at press time.

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