Access to Emergency Credit Facilities Act of 2020

II 116TH CONGRESS 2D SESSION S. 4586 To amend the CARES Act to require the uniform treatment of nationally recognized statistical rating organizations under certain programs carried out in response to the COVID–19 emergency, and for other purposes. IN THE SENATE OF THE UNITED STATES SEPTEMBER 16, 2020 Mr. SCOTT of South Carolina (for himself and Ms. SINEMA) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the CARES Act to require the uniform treatment of nationally recognized statistical rating organizations under certain programs carried out in response to the COVID–19 emergency, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Access to Emergency 4 Credit Facilities Act of 2020’’. 5 VerDate Sep 11 2014 18:12 Sep 23, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4586.IS S4586 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4586 IS SEC. 2. UNIFORM TREATMENT OF NRSROS. 1 (a) IN GENERAL.—Section 4003 of the CARES Act 2 (15 U.S.C. 9042) is amended by adding at the end the 3 following: 4 ‘‘(i) UNIFORM TREATMENT OF NRSROS.— 5 ‘‘(1) DEFINITION.—In this subsection, the term 6 ‘nationally recognized statistical rating organization’ 7 has the meaning given the term in section 3(a) of 8 the Securities Exchange Act of 1934 (15 U.S.C. 9 78c(a)). 10 ‘‘(2) TREATMENT.—Subject to paragraph (3), 11 if, in carrying out this section or any other program 12 making use of a facility established under section 13 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)) 14 in response to COVID–19, the Secretary or the 15 Board of Governors of the Federal Reserve System 16 establishes a requirement for an entity, security, or 17 other instrument to carry a minimum credit rating, 18 the Secretary or the Board of Governors— 19 ‘‘(A) may not require that the credit rating 20 with respect to that entity, security, or other in- 21 strument be issued by any specific— 22 ‘‘(i) nationally recognized statistical 23 rating organization; or 24 VerDate Sep 11 2014 18:12 Sep 23, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4586.IS S4586 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4586 IS ‘‘(ii) category or class of nationally 1 recognized statistical rating organizations; 2 and 3 ‘‘(B) shall accept a credit rating that is 4 issued, before or during the operation of a pro- 5 gram authorized under this section or section 6 13(3) of the Federal Reserve Act (12 U.S.C. 7 343(3)) in response to COVID–19, by any na- 8 tionally recognized statistical rating organiza- 9 tion that the Securities and Exchange Commis- 10 sion has approved to issue a rating for that en- 11 tity, security, or other instrument. 12 ‘‘(3) EXCLUSION.— 13 ‘‘(A) IN GENERAL.—The Secretary or the 14 Board of Governors may exclude a nationally 15 recognized statistical rating organization from 16 the application of paragraph (2) if, in consulta- 17 tion with the Securities and Exchange Commis- 18 sion, the Secretary or Board of Governors, as 19 applicable, determines that— 20 ‘‘(i) the nationally recognized statis- 21 tical rating organization is unable to pro- 22 vide reliable and accurate ratings with re- 23 spect to a particular asset class; and 24 VerDate Sep 11 2014 18:12 Sep 23, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4586.IS S4586 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4586 IS ‘‘(ii) the exclusion is in the public in- 1 terest. 2 ‘‘(B) REPORT.—If the Secretary or the 3 Board of Governors excludes a nationally recog- 4 nized statistical rating organization from the 5 application of paragraph (2) under subpara- 6 graph (A) of this paragraph, the Secretary or 7 Board of Governors, as applicable, shall, as 8 soon as practicable after that exclusion, disclose 9 to the public the reasoning for that exclusion. 10 ‘‘(4) EFFECTIVE DATE.—The amendments 11 made by this subsection shall take effect as if en- 12 acted on March 15, 2020.’’. 13 (b) GAO STUDY AND REPORT.— 14 (1) STUDY.—The Comptroller General of the 15 United States shall carry out a study regarding— 16 (A) the quality of credit ratings issued by 17 nationally recognized statistical ratings organi- 18 zations, as that term is defined in section 3(a) 19 of the Securities Exchange Act of 1934 (15 20 U.S.C. 78c(a)), including during the 2008 eco- 21 nomic crisis; 22 (B) the effect of competition on the quality 23 of credit ratings and on the ability of small- 24 VerDate Sep 11 2014 18:12 Sep 23, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4586.IS S4586 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4586 IS and mid-size companies and financial institu- 1 tions to access the capital markets; and 2 (C) the implementation of the amendment 3 made by subsection (a). 4 (2) REPORT.—Not later than 1 year after the 5 date of enactment of this Act, the Comptroller Gen- 6 eral of the United States shall submit to Congress 7 a report containing all findings and determinations 8 made in carrying out the study required under para- 9 graph (1). 10 Æ VerDate Sep 11 2014 18:12 Sep 23, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S4586.IS S4586 pamtmann on DSKBC07HB2PROD with BILLS