NEW YORK — Moody’s Investors Service, Standard & Poor’s and Fitch Ratings completed a deal with New York Attorney General Andrew Cuomo to adopt a new fee structure designed to eliminate shopping by investment banks for ratings for residential mortgage- backed securities.
The three major ratings companies will move from a contingency-based payment system to fee-for-service so they will be paid even if an investment bank doesn’t select them to rate a security. The companies also will disclose more information about their process, including whether an issuer sought, then decided not to use, ratings from a certain company.
The companies also agreed to cooperate with Cuomo’s probe of the mortgage-industry meltdown that caused more than $386 billion in credit losses and asset write-downs at banks.
