WASHINGTON - The Treasury Department yesterday sent Congress draft legislation designed to strengthen federal oversight of credit rating agencies, mitigate conflicts of interest, increase the transparency of the ratings process and reduce investor reliance on ratings.

Sources said House Financial Services Committee chairman Barney Frank, D-Mass., will consider adding to the measure legislation he introduced earlier this year that would require the rating agencies to rate municipal bonds more similarly to corporate debt, based only on the likelihood of timely repayment to investors.

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