Q: Why would they give ultra-safe ratings to risky mortgages?
A: Critics have long argued that the agencies suffer from a fundamental conflict of interest: They are paid by the same companies whose bonds they rate.
According to various investigations of the crisis, rating agencies competed with each other for the business of the banks and brokerages that were packaging the mortgage-backed bonds. In some cases, critics say, rating-agency analysts were pressured to give unrealistically high ratings to curry favor with Wall Street.
Q: So who's going to jail?
A: No one. The charges are civil, so the harshest penalties would be fines and limits on how the company does business.
In general, law enforcement officials have had a tough time making criminal cases against high-profile people involved in the 2008 financial crisis. Justice Department officials have argued that they simply don't have the evidence to prosecute criminal cases, which would carry a higher burden of proof than civil charges.
As a result, most of the cases related to the crisis have been actions by regulators or lawsuits against small-time mortgage industry workers who committed on-the-ground fraud. No major Wall Street executive has faced the threat of jail time in relation to the crisis.
Q: Have lawmakers fixed the credit rating system?
A: There have been some reforms, but critics say they don't go far enough.
Under the 2010 overhaul of financial rules known as the Dodd-Frank Act, the Securities and Exchange Commission gained stronger powers to oversee rating agencies. Safeguards were put in place to prevent banks from shopping around for the best rating.
Some proposals went farther. One would have randomly assigned a rating agency to each investment. It did not make the final bill.