Franken wants board to monitor credit ratings firms

U.S. Sen. Al Franken is pushing the Securities and Exchange Commission to overhaul the way it regulates the credit ratings industry.

Credit rating companies give grades to debt issued by companies and governments. Many analysts blame the three biggest credit rating companies for exacerbating the housing crisis through practices such as giving subprime mortgages excellent ratings.

Franken helped attach an amendment to the 2010 Dodd-Frank financial overhaul that required the SEC to propose alternatives to the current rating system.

The Minnesota Democrat's plan would create an independent board that would monitor the firms and direct business to the companies that have the most accurate ratings.

"I think this would restore trust in the system and if we don't do this, we're just setting ourselves up for another meltdown," Franken said.

The industry disagrees with the proposal.

Franken will press his case at a roundtable discussion Tuesday at the SEC in Washington.