The SEC requires that one of three private credit rating agencies give a grade to all new bond offerings and the like.
So, yes, this is a private business, but it is also a government mandated cartel.
Bloomberg reports: Bank of America Corp. (BAC), the biggest U.S. lender by assets, had its servicer-quality ratings cut by Moody’s Investors Service after delaying foreclosures amid concerns that it mishandled mortgage paperwork.
Moody’s cited deterioration in the company’s collections and loss-mitigation, according to a report today by the ratings firm. The lender’s ratings “remain on review for possible further downgrade due to irregularities in Bank of America’s foreclosure process,” Moody’s said in the report.