[JURIST] The US House Financial Services Committee [official website] voted 49-14 Wednesday to approve new regulations governing investment rating agencies. The Accountability and Transparency in Rating Agencies Act [HR 3890 text], sponsored by Paul Kanjorski (D-PA) [official website], modifies the Securities Exchange Act of 1934 [text, PDF], giving the Securities and Exchange Commission (SEC) [official website] the authority to monitor and punish ratings agencies. Kanjorski sees the need for increased regulation, saying [press release]:

The Accountability and Transparency in Rating Agencies Act aims to curb the inappropriate and irresponsible actions of credit rating agencies which greatly contributed to our current economic problems. This legislation builds on the Administration’s proposal and takes strong steps to reduce conflicts of interest, stem market reliance on credit rating agencies, and impose a liability standard on the agencies. As gatekeepers to our markets, credit rating agencies must be held to higher standards. We need to incentivize them to do their jobs correctly and effectively, and there must be repercussions if they fall short. This bill will take such steps. I look forward to moving it through the legislative process.”