Hartford — Connecticut’s Attorney General Richard Blumenthal is stepping up his campaign to reform the credit rating system. Blumenthal, whose office has begun an antitrust investigation of the three major credit rating agencies, wrote letters to SEC Chairman Christopher Cox, Senate Banking Committee Chairman Christopher Dodd (D Conn.) and House Financial Services Chairman Barney Frank (D – Mass.) asking for legislation that would mandate greater parity for the rating of municipal bonds.
"My ongoing investigation has revealed that rating agencies frequently give states and municipalities substantially lower credit ratings as compared to corporations with the same or worse rates of default," Blumenthal wrote. "This dual rating system costs cities, towns, and school districts in Connecticut and around the country millions of dollars in unnecessary interest and insurance costs every year."
Blumenthal asked that laws be enacted forcing the credit rating agencies to rate public bonds the same way they rate corporate bonds.
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