United States lawmakers have pointed the finger at credit rating agencies and especially their executives for improperly assessing the securities and investments that were backed by mortgages. As the executives were questioned at the latest Congressional hearings on the causes of the US financial collapse, lawmakers harshly denounced the actions of these executives.

It is the role of these bond rating companies to assign risk ratings and grades to investments, including the latest mortgage-backed securities to fail that were at the heart of the current financial collapse and crisis. These firms have become more prominent in recent years, and their operating revenues and profits have soared dramatically.

With their increasing roles came increasingly careless assessments, claims the members of the US House of Representatives Oversight and Government Reform Committee. It is the lawmakers’ assertion that the executives at the credit rating companies became increasingly focused on profits rather than doing their job of correctly and accurately assessing risks of different securities; they failed to recognize the warning signs of the collapse of the financial backing of mortgages and failed to protect the American public. Calls for changes in the industry are widespread.

The executives at these companies, including Jerome Fons, a former managing director of credit policy at Moody’s (one of the two large credit rating firms at the heart of the investigation along with Standard & Poor’s) states that the firms failed to correctly assess the impact of the housing market collapse and poor standards of the sub-prime mortgage market. He states that the company become increasing focused on customer service and client attitudes — a shift that resulted in many flawed ratings and credit analysis.

Lawmakers are presently calling for more investigations of the fraud perpetrated by the firms and investigations of the asset and credit mismanagement.