Senate Banking Committee Chairman Discusses Industry Concerns on Rating Agency Reforms with SEC Chairman

The Senate Banking Committee yesterday held a hearing to discuss turmoil in the U.S. credit markets and the role of the credit rating agencies. During questioning with Chairman Christopher Cox of the Securities and Exchange Commission, Senate Banking Committee Chairman Dodd raised concerns regarding a proposal to provide a separate rating category for structured securities and referenced an April 21, 2008 joint letter from the Mortgage Bankers Association (MBA), the Commercial Mortgage Securities Association (CMSA), and The Real Estate Roundtable warning that differentiating between ratings would only serve to further erode investor confidence and threaten an already fragile economy. During this exchange, Chairman Cox indicated that the SEC will actively solicit industry comments for rating agency regulatory changes during the public comment period for new regulations, which are anticipated to be released in the summer/fall 2008.

The Senior Vice President of Commercial/Multifamily for the Mortgage Bankers Association, Jan Sternin, issued the following statement:

'MBA, its members and industry partners are committed to restoring liquidity and confidence in the markets through an active dialogue, increased transparency and an industry-wide commitment to reinvesting in our economic future.

'We appreciate the interest of Senate Banking Committee Chairman Dodd, Ranking Member Richard Shelby, and the SEC Chairman Cox in working together with the stakeholders of the real estate finance industry. Improving the ratings process is critical to getting players back in the market.'