[Congressional Record Volume 168, Number 124 (Tuesday, July 26, 2022)]
[House]
[Pages H7128-H7129]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   RISK-BASED CREDIT EXAMINATION ACT

  Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4586) to amend the Securities Exchange Act of 1934 with 
respect to risk-based examinations of Nationally Recognized Statistical 
Rating Organizations, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4586

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Risk-Based Credit 
     Examination Act''.

     SEC. 2. CONDUCT OF RISK-BASED EXAMINATIONS OF NATIONALLY 
                   RECOGNIZED STATISTICAL RATING ORGANIZATIONS.

       Section 15E(p)(3)(B) of the Securities Exchange Act of 1934 
     (15 U.S.C. 78o-7(p)(3)(B)) is amended in the matter preceding 
     clause (i), by inserting ``, as appropriate,'' after ``Each 
     examination under subparagraph (A) shall include''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Ms. Waters) and the gentlewoman from Missouri (Mrs. Wagner) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks on 
this legislation and include extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I support H.R. 4586, sponsored by Mrs. Wagner, to help 
the Securities and Exchange Commission robustly oversee the credit 
rating agencies through more prudent annual examinations.
  Mrs. Wagner's proposal ensures that the SEC continues its annual 
examinations of all credit rating agencies but can now focus their 
examinations on the aspects of the rating agencies that pose the 
greatest risk to investors in our capital markets.
  Mr. Speaker, I urge my colleagues to support this bill, and I reserve 
the balance of my time.
  Mrs. WAGNER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of my legislation, H.R. 4586, the 
Risk-Based Credit Examination Act. I thank the chairman and ranking 
member for their support.
  Under Dodd-Frank, the SEC's Office of Credit Ratings, OCR, is 
required to

[[Page H7129]]

conduct annual examinations of credit rating agencies on eight review 
areas. Evaluating each of these eight areas is resource-intensive for 
both the OCR and the rating agency and is oftentimes redundant when 
there have been no identified material issues.
  H.R. 4586 is a straightforward bill to provide the OCR with 
discretion concerning these eight reviewable areas during their annual 
examinations.
  Dodd-Frank's increased compliance requirements for nationally 
recognized statistical rating organizations, or NRSROs, put small 
credit rating agencies at a disadvantage in the market, chilled 
competition among rating agencies, and further consolidated power in 
the largest rating agencies. Additionally, small credit rating agencies 
were not the cause of the financial crisis and should not be treated as 
such.
  The marketplace needs commonsense reforms like this. By providing 
discretion to the SEC's OCR for these eight review areas, H.R. 4586 is 
right-sizing the SEC's oversight of NRSROs and alleviating costly 
burdens that especially impact the smaller NRSROs.
  By adopting a risk-based approach, H.R. 4586 allows for continued 
oversight by OCR but in a more efficient and targeted manner. It also 
removes burdensome and unnecessary compliance costs for small rating 
agencies to promote much-needed competition in the credit rating 
industry.
  Mr. Speaker, I obviously support H.R. 4586, and I encourage my 
colleagues to support it.
  Mr. Speaker, I yield back the balance of my time.
  Ms. WATERS. Mr. Speaker, I am pleased to support H.R. 4586, sponsored 
by Mrs. Wagner, to help the Securities and Exchange Commission robustly 
oversee the credit rating agencies through more prudent annual 
examinations.
  Mr. Speaker, I urge my Members to vote ``yes,'' and I yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Waters) that the House suspend the 
rules and pass the bill, H.R. 4586, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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