WASHINGTON  —  Market participants are concerned the "Municipal Bond Fairness Act" sponsored by House Financial Services chairman Barney Frank, D-Mass., scheduled to be voted on by the committee today, includes language that is too broad and raises constitutional free speech issues.

If passed by Congress, the legislation would require that credit rating agencies base the ratings of municipal, corporate and other securities on the likelihood of repayment alone, which raises "very serious First Amendment issues," said Floyd Abrams, the constitutional expert who represents Standard & Poor's.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.