WASHINGTON — The chairman of a Senate investigative panel wants to change the business model for credit-rating agencies by requiring them to be paid by an independent third party instead of receiving direct payments from investment banks whose products they rate.

Sen. Carl Levin, D-Mich., chairman of Senate Permanent Subcommittee on Investigations, told Dow Jones Newswires Tuesday that he will offer an amendment to a financial overhaul bill that would direct the U.S. Securities and Exchange Commission to identify an intermediary that would filter payments to credit-rating firms.

"You would probably require the SEC to have an intermediary. They would be tasked with identifying the intermediary to avoid the conflict," Levin said.

The amendment also would direct the SEC to review credit-rating firms' structures, he said.

Levin is still crafting the amendment, which could be unveiled as early as this week. It will include other provisions designed to put a stop to abusive lending in the mortgage business.

Levin said his amendment will address so-called "liar loans" that are based solely on what customers declare as their income, as well as negative-amortization loans that cause mortgages to balloon by allowing homeowners to defer principal or interest payments.

Last month, Levin's subcommittee hauled in two of the biggest rating firms — Moody's Corp. and Standard & Poor's Corp. — after the panel's staff conducted more than a year of investigations into the relationship between rating firms and investment banks.

Levin has said that he believes there is an inherent conflict of interest between rating firms and the investment banks that pay them to rate their products and that the sometimes tense relationship at the very least carries the implication that rating firms are influenced by Wall Street.

As the housing market was collapsing in 2007, Levin said credit rating firms were slow to change their models for ranking financial packages based on mortgage-backed assets.

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