I 
111TH CONGRESS 
1ST SESSION H. R. 3128 
To amend the Federal Reserve Act to authorize Federal Reserve Banks 
to examine the methodologies of used by nationally recognized statistical 
rating organizations in analyzing and rating asset backed securities and 
structured finance products. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 8, 2009 
Mr. ELLISON introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend the Federal Reserve Act to authorize Federal 
Reserve Banks to examine the methodologies of used 
by nationally recognized statistical rating organizations 
in analyzing and rating asset backed securities and struc-
tured finance products. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXAMINATION AUTHORITY WITH RESPECT TO 
NATIONALLY RECOGNIZED STATISTICAL RAT-
ING ORGANIZATIONS. 
Section 13 of the Federal Reserve Act is amended 
by adding at the end the following new paragraph: 
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‘‘(15) EXAMINATION
AUTHORITY
WITH
RE-
SPECT
TO
NATIONALLY
RECOGNIZED
STATISTICAL 
RATING ORGANIZATIONS.— 
‘‘(A) IN GENERAL.—The Board may au-
thorize any Federal reserve bank to examine 
the methodologies used by nationally recognized 
statistical rating organizations in analyzing and 
rating asset backed securities and structured fi-
nance products. Such examinations shall be 
subject to such limitations, restrictions, and 
regulations as the Board may prescribe. 
‘‘(B) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) ASSET BACKED SECURITY.—The 
term ‘asset backed security’ means— 
‘‘(I) a security that is primarily 
serviced by the cash flows of a dis-
crete pool of receivables or other fi-
nancial assets (including mortgages), 
either fixed or revolving, that by their 
terms convert into cash within a finite 
time period, plus any rights or other 
assets designed to assure the servicing 
or timely distributions of proceeds to 
the security holders; and 
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‘‘(II) such other security as the 
Board may prescribe. 
‘‘(ii) NATIONALLY RECOGNIZED STA-
TISTICAL
RATING
ORGANIZATION.—The 
term ‘nationally recognized statistical rat-
ing organization’ has the same meaning as 
in section 3(a)(62) of the Securities Ex-
change 
Act 
of 
1934 
(15 
U.S.C. 
78c(a)(62)). 
‘‘(iii) SECURITY.—The term ‘security’ 
has the same meaning as in section 
3(a)(10) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(10)). 
‘‘(iv) STRUCTURED
FINANCE
PROD-
UCT.—The term ‘structured finance prod-
uct’ means a product that includes— 
‘‘(I) the pooling of assets (either 
cash-based or synthetically created); 
‘‘(II) the tranching of liabilities 
that are backed by such assets; 
‘‘(III) de-linking of the credit 
risk of such assets from the credit 
risk of the originator (usually through 
use of a finite-lived, standalone fi-
nancing vehicle); or 
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‘‘(IV) such other elements as the 
Board may prescribe.’’. 
Æ 
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