We all are aware that credit ratings agencies played a major part in the financial meltdown. So, naturally one would expect to see major reforms originating from Congress.

Not only is this ignored in legislation that has any chance of passing, the New York Times is reporting we never will.

When the financial crisis began, few players on Wall Street looked more ripe for reform than the Big Three credit rating agencies.

It wasn’t just that Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, played a crucial role in the epochal housing market collapse, affixing their most laudatory grades to billions of dollars worth of bonds that went bad in the subprime crisis.

It was the near universal agreement that potential conflicts were embedded in the ratings model. For years, banks and other issuers have paid rating agencies to appraise securities — a bit like a restaurant paying a critic to review its food, and only if the verdict is highly favorable.

So as Washington rewrites the rules of Wall Street, how is the overhaul of the Big Three coming? It isn’t, finance experts say.

According to the article, the reason credit ratings agencies are getting a free pass is not due to lobbyists (right), but due to the lack of consensus on what reform should be.

Gee wiz, oh nothing is going to happen so just give up? At least Senator Dodd's bill has an office to monitor credit ratings agencies. How about examining proposals in congressional testimony, or listening to whistleblowers?

Naked Capitalism has more:

First, this discussion promotes the misconception that ratings agencies don’t lobby. They do, but not through the usual hired guns, who work on Congressmen. The rating agencies lobby quite effectively…..to the regulators. And since the regulators aren’t keen (and stress the central role of ratings) that makes Congress cautious.

But more important, the article fails to draw the distinction between rating of structured credits, which is where the big fees came from and where the abuses occurred, versus rating traditional products, like corporate bonds, commercial paper, and municipal debt.

Dean Baker has a simple proposal, do not let companies choose the credit rating agency for their product. This might work, except there are really only 3. Of course having a 3rd party choose a ratings agency might also help bust out the monopoly of the big three.