Alex J. Pollock, resident fellow at the American Enterprise Institute in Washington, believes it is not too late to fix Dodd-Frank's credit ratings rule.
Section 939A of the 2010 Dodd-Frank Act requires federal agencies to review regulations that require the use of an assessment of creditworthiness of a security or money market instrument and any references to, or requirements in, those regulations regarding credit ratings.
"Mandatory use of credit ratings was a big regulatory mistake," Pollock claims.
"The obvious fix is simply to delete the three words, 'reference to or.' The provision would then read that all agencies must remove 'any requirement of reliance on credit ratings,'" Pollock states.
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