H.R.3911 – Risk-Based Credit Examination Act

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Week ending November 10, 2017

H.R.3911 – Risk-Based Credit Examination Act


H.R. 3911 would authorize the Office of Credit Ratings to include the results from any examination of nationally recognized statistical rating organizations in eight specified review areas in its annual reviews.

Section 932 of the Dodd Frank Act creates an Office of Credit Ratings in the SEC, imposes more stringent conflict-of-interest regulation on credit rating agencies, and gives the compliance officers at rating agencies additional responsibilities, including filing annual reports with the SEC. The annual reports are comprehensive and require that the OCR travels to the credit rating agency and conduct on-sight interviews with management and staff. Specifically, the Commission is required to examine each NRSRO annually on eight review areas designated in the Exchange Act, which are resource intensive and often redundant when no material issues have been identified. Those eight review areas are: (i) whether the NRSRO conducts business in accordance with its policies, procedures, and rating methodologies; (ii) the management of conflicts of interest by the NRSRO; (iii) the implementation of ethics policies by the NRSRO; (iv) the internal supervisory controls of the NRSRO; (v) the governance of the NRSRO; (vi) the activities of the NRSRO’s Designated Compliance Officer; (vii) the processing of complaints of the NRSRO; and (viii) the policies of the NRSRO governing the post-employment activities of its former personnel.

The above is considered burdensome because for small credit rating agencies and have ultimately hurt investors who bear the cost of the new rules. Small credit rating agencies were not the cause of the financial crisis but now are bearing the cost of rigid and in some cases blunt legislative provisions that did not consider that not all NRSROs are the same.

(Full text of H.R. 3911 congress.gov)

Sponsor:  Rep. Wagner, Ann [R-MO-2] (Introduced 10/02/2017)

Status: Passed House /



On Passage: On motion to suspend the rules and pass the bill Agreed to by the Yeas and Nays: (2/3 required): 389 – 32 (Roll no. 615)

House Amendments:

Motion to recommit:

Text of the motion:


On Passage:

Procedural Actions:

Senate Amendments:


Cost to the taxpayers:  Based on an analysis of information from the SEC, CBO estimates that implementing H.R. 3911 would not significantly affect the costs for the SEC to produce its annual reviews of NRSROs. Moreover, the SEC is authorized to collect fees sufficient to offset its annual appropriation; therefore, assuming appropriation actions consistent with that authority, CBO estimates that the net effect of the bill on discretionary spending would be negligible.

Pay-as-you-go requirements:  Enacting H.R. 3911 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

Regulatory and Other Impact: H.R. 3911 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Dynamic Scoring:   CBO estimates that enacting H.R. 3911 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.

Tax Complexity:  Not applicable to this bill.

Earmark Certification:  With respect to clause 9 of rule XXI of the Rules of the House of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not contain any congressional earmarks, limited tax benefits, or limited tariff benefits within the meaning of the rule.

Duplication of programs:    In compliance with clause 3(c)(5) of rule XIII of the Rules of the House of Representatives, the Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program

Direct Rule-Making:  The Committee estimates that the bill requires no directed rulemakings within the meaning of such section.

Advisory Committee Statement: No advisory committees within the meaning of section 5(b) of the Federal Advisory Committee Act were created by this legislation.

Budget Authority: Data not available

Constitutional Authority:   Assumed.


More Bill Information:


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