Butler promises to increase credit ratings oversight as head of new SEC credit ratings office

Former brokerage executive Thomas J. Butler, who was recently appointed to head the Securities and Exchange Commission’s Office of Credit Ratings, pledged on Monday to increase oversight of the credit ratings industry.

“I view this as a unique time in history for me to take the learning and experience I’ve had in law and financial services and really do some extraordinarily good things with it to the benefit of today’s institutions, investors and tomorrow’s generation,” Butler said, according to The Wall Street Journal.

The SEC’s credit ratings office was established under the 2010 Dodd-Frank Act after allegations surfaced that credit ratings organizations had rated mortgage-linked securities too highly, a factor that contributed to the recent housing crisis.

Butler said that one of his first tasks as head of the department would be to determine whether the office would be allotted its own rule-writing, enforcement and examination staff, which would increase the number of individuals devoted to credit ratings supervision, The Wall Street Journal reports.

At present, there are at minimum 20 individuals throughout the SEC’s divisions that are dedicated to credit rating firm supervision. Butler said that the SEC’s recent budget increase would allow the office to employ 30 individuals.

Butler said that he would draw on his experience in law and the financial-advisory industry.

“There are few times in life when you can actually feel that there is an inflection point in your career and the desire to do something bigger than yourself,” Butler said, according to The Wall Street Journal. “And this was that time for me.”

Some industry participants have criticized Butler’s lack of experience at a credit rating agency, though Butler said that the Dodd-Frank Act does not require the office’s director to have that background.

Butler said his initial goals include overseeing the completion of the office’s annual exam of registered credit rating firms, continuing work on those enforcement actions in process and expounding upon the final details of Dodd-Frank—mandated regulations, The Wall Street Journal reports.

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