Washington, DC – Today, the National Community Reinvestment Coalition (NCRC) applauded the news that the U.S. Department of Justice has filed a civil fraud complaint against Standards and Poor’s Rating Services for inflating crediting ratings for residential mortgage backed securities and collateralized debt obligations in the years leading to the financial crisis.
“For years NCRC has being saying that the credit rating agencies, including Standard and Poor’s, knowingly issued inflated credit ratings for securities backed by problematic high cost loans,” said NCRC President and CEO John Taylor. “We have previously filed several complaints with regulators against S&P and the other top credit rating agencies on this issue. These credit rating agencies played a key role in causing the housing and foreclosure crisis, which has caused severe financial harm to millions. It is due time that the Department of Justice brings a credit rating agency to task for their transgressions. We hope to see more action of this nature.”
In 2008 NCRC filed a complaint with the Securities and Exchange Commission (SEC) against the three top credit agencies, Fitch, Inc. (“Fitch”), Moody’s Investors Service, Inc. (“Moody’s”) and the Standard and Poor’s Division of the McGraw Hill Companies, Inc. (“S&P”) alleging that the rating agencies substantially contributed to the housing and foreclosure crisis by making public misrepresentations about the soundness and reliability of securities ratings.
In 2009, NCRC filed a civil rights complaint with the U.S. Department of Housing and Urban Development’s (HUD) Office of Fair Housing and Equal Opportunity against Standard & Poor’s alleging that the credit rating agencies substantially contributed to the housing and foreclosure crisis in African-American and Latino communities by making public misrepresentations about the soundness and reliability of subprime securities’ ratings.
About the National Community Reinvestment Coalition (NCRC): The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America’s working families.
