AFP Urges Congressional Action to Reform the Credit Ratings Market

Washington, DC - March 7, 2006 - The Association for Financial Professionals (AFP) today urged Congress to take action to reform the credit ratings market to promote competition, transparency, and oversight.

"On behalf of our membership, I applaud Chairman Shelby and Ranking Member Sarbanes for their continued efforts to address the lack of effective oversight in the credit ratings market," said Jim Kaitz, AFP President and CEO. "For over three years, AFP has called for reform of the credit ratings market, yet the SEC has failed to implement any meaningful changes. It is time for Congress to act and pass legislation that will foster competition and restore confidence in the credit ratings markets."

AFP's research has consistently shown that confidence in rating agencies and their ratings is low and has continued to diminish over the past few years. The SEC's existing recognition process has created an artificial barrier to entry to the credit ratings market. This barrier has led to a concentration of market power with the recognized rating agencies and a lack of competition and innovation in the credit ratings market. Further, there is no effective SEC oversight mechanism.

"Congress should take steps to remove the artificial barrier to entry that the SEC has erected and explicitly grant the SEC the powers it needs to conduct effective oversight of the rating agencies. Any reform designed to address concerns about the credit ratings market, either through regulation or voluntary agreement, must include SEC enforcement," said Kaitz. Kaitz went on to say that "any effort to address concerns about the credit rating market will be entirely ineffective without SEC oversight."

AFP has previously provided testimony to the Senate Banking Committee, and the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. In its June 2005 testimony before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, AFP expressed its support of the Credit Rating Agency Duopoly Relief Act of 2005 (H.R. 2990).

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The Association for Financial Professionals (AFP) headquartered in Bethesda, Maryland, supports more than 14,000 individual members from a wide range of industries throughout all stages of their careers in various aspects of treasury and financial management. AFP is the preferred resource for financial professionals for continuing education, financial tools and publications, career development, certifications, research, representation to legislators and regulators, and the development of industry standards. For more information about AFP visit www.AFPonline.org