Providing for Consideration of H.R. 2990, Credit Rating Agency Duopoly Relief Act of 2006
PROVIDING FOR CONSIDERATION OF H.R. 2990, CREDIT RATING AGENCY DUOPOLY RELIEF ACT OF 2006
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Mrs. CAPITO. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentlewoman from California (Ms. Matsui), pending which I yield myself such time as I may consume.
Last night, the Rules Committee granted a structured rule for H.R. 2990, the Credit Agency Duopoly Relief Act of 2006. The rule provides 1 hour of general debate equally divided and controlled by the chairman and ranking minority member of the Committee on Financial Services; waives all points of order against consideration of the bill. The rule also provides that the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill shall be considered as an original bill for the purpose of amendment and shall be considered as read.
The rule makes in order only those amendments printed in the Rules Committee report accompanying the resolution. It also provides that the amendments printed in the report may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole.
The rule waives all points of order against the amendments printed in the report and provides one motion to recommit, with or without instructions.
During consideration of the resolution, all time yielded is for the purpose of debate only.
Mr. Speaker, this is a fair rule, making all germane amendments that were offered in the Committee on Rules in order.
The underlying legislation is an important, commonsense approach to providing greater transparency for credit rating agencies. Who can forget the scandals following the bankruptcies of Enron and WorldCom? Even more shocking is the fact that both corporations were given investment grade ratings by credit rating agencies just before their financial collapse. This misrepresentation resulted in the loss of millions of dollars for investors.
The root of the problem lies with the current process of recognizing statistical rating organizations by the Securities and Exchange Commission. The current process stifles competition and fosters an environment that has led to two rating agencies holding 80 percent of the market share.
A level playing field is needed so smaller companies with expertise in specific areas can enter the market. H.R. 2990 clearly lays out the registration requirements for rating agencies replacing the current opaque designation process by the SEC. By injecting the current system with competition and greater transparency, the quality of ratings will be enhanced.
This act will also provide greater investor protection, including provisions requiring rating agencies to be in the business of issuing credit ratings for at least 3 years prior to filing an application for registration as a nationally recognized statistical ratings organization, ensuring better quality assessments for investors.
Mr. Speaker, the economy is booming due in part to greater participation by investors in the various markets. Greater transparency, accountability and competition among credit ratings agencies will provide investors with better information and encourage future investment. The underlying legislation is a step in the right direction towards ensuring this success.
Finally, this legislation will improve the quality of information provided to investors. It is no secret that a little competition improves quality and expands services offered. Armed with more reliable and accurate credit ratings, investors will continue to drive the economy and foster a more innovative environment.
I would like to remind all Members that the rule makes in order all germane amendments presented to the Committee on Rules.
I urge all Members to support this fair rule and the underlying legislation.
Mr. Speaker, I reserve the balance of my time.
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Mrs. CAPITO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to remind my colleagues that the vote that we are discussing is the rule on the duopoly bill, which will increase the number of credit rating agencies so that we can have more transparency, more accountability, so that not only investors will be protected, but also those folks who work for those businesses who have 401(k)s who have their savings invested in the company that they work for.
This will provide for them better protections, better transparency, and better accountability.
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Mrs. CAPITO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I find it rather ironic that the bill before us today is a bill that I think would help go a long way towards bringing more transparency and accountability to credit rating agencies. They agree with the principles behind the bill, which would avert and help the working people of America to make not only better investment decisions, but to know that the company that they are working for and entrusting their savings with is going to have a fair and balanced look at their books.
We have no disagreement in terms of the rule. We have two different approaches to this, and I think we would really be well served to keep the debate looking towards how we can best protect those working people under the realm of the bill that we are discussing today.
Mr. Speaker, I reserve the balance of my time.
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Mrs. CAPITO. Mr. Speaker, let me conclude my remarks by reminding my colleagues that defeating the previous question is nothing more than an exercise because the minority wants to offer an amendment that would otherwise be ruled out of order as nongermane. So the vote is without substance.
The previous question vote itself is a procedural motion to close debate on this rule and proceed to a vote on its adoption. The vote has no substantive policy implications whatsoever.
At this point in the RECORD, Mr. Speaker, I insert an explanation of the previous question.
The Previous Question Vote: What Does It Mean?
House Rule XIX (``Previous Question'') provides in part that:
There shall be a motion for the previous question, which, being ordered, shall have the effect of cutting off all debate and bringing the House to a direct vote on the immediate question or questions on which it has been ordered.
In the case of a special rule or order of business resolution reported from the House Rules Committee, providing for the consideration of a specified legislative measure, the previous question is moved following the one hour of debate allowed for under House Rules.
The vote on the previous question is simply a procedural vote on whether to proceed to an immediate vote on adopting the resolution that sets the ground rules for debate and amendment on the legislation it would make in order. Therefore, the previous question has no substantive legislative or policy implications whatsoever.
Mr. Speaker, I would like to say that the underlying legislation is an important step towards improving transparency in the credit rating industry and the quality of information provided by the agencies. The industries receiving credit ratings are wide-ranging, from information technology, healthcare, manufacturing, financial services, and the list goes on.
I would also like to remind my colleagues that many, many workers in America and investors in America are heavily reliant on the full health of the companies that they work for and invest in, all up and down the economic ladder. Allowing smaller industry specific credit rating agencies to enter the market will improve the information provided to investors.
We cannot forget those workers of Enron and WorldCom who were saving for colleges, saving for retirement, and basically left penniless. With the ever-increasing importance placed on these ratings by investors, it is important that clear requirements for registration of credit rating agencies be created, and this legislation is a giant step towards that goal.
I would like to remind my colleagues that this fair rule makes in order all germane amendments that were presented to the Committee on Rules.
The material previously referred to by Ms. Matsui is as follows:
Previous Question on H. Res. 906, Rule for H.R. 2990 Credit Rating Agency Duopoly Relief Act
At the end of the resolution add the following new section:
``SEC. 2. Immediately upon the adoption of this resolution it shall be in order without intervention of any point of order to consider in the House the bill (H.R. 2429) to amend the Fair Labor Standards Act of 1938 to provide for an increase in the Federal minimum wage. The bill shall be considered as read for amendment. The previous question shall be considered as ordered on the bill to final passage without intervening motion except: (1) 60 minutes of debate equally divided and controlled by the chairman and ranking minority member of the Committee on Education and the Workforce; and (2) one motion to recommit with or without instructions.''
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