Presidential hopeful Bernie Sanders has stated that credit ratings agencies should be nonprofit, and that they should not be reliant on Wall Street. He argued that companies such as Standard & Poor’s, Moody’s, and Fitch have too close a relationship to Wall Street, which creates a conflict of interest.
Under such a model, those groups would be less beholden to Wall Street and less susceptible to it’s machinations, and able to provide more honest credit ratings to Americans. As it stands, financial institutions have too much influence in the credit market, which can negatively impact Americans who need credit to purchase cars, homes, and other expensive items. With poor credit ratings, many borrowers are forced to rely on lines of credit with prohibitively high interest rates.
Mr. Sanders has also said that under his presidency, he would seek to reform the Federal Reserve so that it ceases making interest payments to financial institutions that keep money with the central bank. Instead, he proposes that those institutions should be paying fees to keep their money in the Fed. He also said he would ban banking industry executives from serving on the board of the Federal Reserve, which also creates a conflict of interest. Mr. Sanders and his supporters see the current arrangement as yet another opportunity for large companies to make money at the expense of the American people.
Mr. Sanders is running as a Democrat, but has historically served as an independent senator for Vermont and identifies as a democratic socialist. He has consistently run on a platform of greater accountability for big business, and an expansion of social programs within the United States in order to make the richest country in the world a place that is easier for people outside of the wealthiest Americans to live.