Uniform Treatment of Nrsros Act

Floor Speech

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Ms. DEAN. Mr. Speaker, I thank my colleague and friend and chair for yielding, and I thank my colleague on the other side of the aisle for his support for this bill.

Mr. Speaker, I rise in support of H.R. 6934, the Uniform Treatment of NRSROs Act.

NRSROs are nationally recognized statistical rating agencies. This is a bipartisan bill that addresses businesses' need for greater access to Federal lending facilities in the time of COVID and a uniform treatment of credit rating agencies in the application process for these much- needed loans.

In response to the economic crisis resulting from the COVID-19 pandemic, several lending facilities have been created to assist struggling businesses at this difficult time. The Federal Reserve and Treasury, however, have limited access to these facilities to businesses whose assets have been rated by only a select few credit rating agencies, making it unnecessarily difficult for many businesses to access much-needed resources.

In Pennsylvania alone, several small and mid-sized companies as well as municipal bond issuers have been excluded from the facilities or have their ratings from nonapproved rating agencies called into question by the market.

This legislation seeks to remove these barriers by amending the CARES Act to require that the Federal Reserve and Treasury accept ratings from any nationally recognized statistical rating organization, or NRSRO. This would have the effect of opening up access to the facilities to issuers with a rating from any duly recognized NRSRO that has been approved in the relevant asset class by the SEC.

This legislation would also require the Comptroller General to issue, within 1 year of enactment, a study on the quality of credit rating agencies across NRSROs, including during the 2008 crisis. The study would also explore the effect of competition on the quality of credit ratings and on the ability of small and mid-sized companies and financial institutions to access the capital markets.

At a time of unprecedented economic uncertainty, we need to make sure that small and mid-sized businesses have access to capital markets needed to survive and recover. By expanding eligible NRSROs, this legislation opens up access, transparency, and healthy competition, without compromising quality, at a time when it is needed most.

Mr. Speaker, I thank Chairwoman Waters, the Financial Services Committee staff, and, importantly, my Republican colead, Representative

Andy Barr, for their work on this legislation to help struggling businesses get the capital they need.

Mr. Speaker, I urge my colleagues to support this legislation.

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