|
|
The Text of the Dodd-Frank Act
International Association of
Risk and Compliance Professionals (IARCP)
Dodd Frank Act Section 939
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 recognized 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 recognized 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
CREDITWORTHINESS’’; 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 recognized 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 recognized
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– 61, (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
2 years after the date of enactment of this Act.
(h)
STUDY AND REPORT.—
(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.
Return to Index
Return to the Table of Contents
Visit the
international Association of Risk and Compliance Professionals
(IARCP)
|
|
|
