On Friday, Representative Paul Kanjorski (D-PA) distributed a discussion draft of proposed legislation regarding credit rating agencies, entitled “Accountability and Transparency in Rating Agencies Act.” In many respects the draft bill is similar to the Obama Administration’s proposal regarding credit rating industry reform. For example, the proposed legislation would (1) give federal securities regulators the authority to review credit-rating methodology, (2) attempt to prevent ratings “shopping” by requiring the disclosure of information on both initial ratings and subsequent ratings, and (3) address conflicts by prohibiting credit rating agencies from providing consulting services to companies they rate. But the proposed legislation also goes beyond the Obama Administration’s proposal, in that it would remove statutory references to credit ratings agencies in more than a dozen laws, including the Federal Deposit Insurance Act and the Securities Exchange Act, in order to attempt to reduce reliance on ratings. In addition, it would make it easier for investors to sue rating firms. The House Financial Services Committee is scheduled to hold a hearing on Reforming Credit Rating Agencies on Wednesday, September 30, 2009.