Several sections of Kanjorski's bill discuss how to disclose information to the public about when an outside "third party" does due diligence on underlying mortgages or other loans that are being rated. However, the bill wouldn't require such independent due diligence, which was sorely missing during the boom in home prices.

A former Moody's analyst who's familiar with the rating process for bonds backed by sub-prime U.S. mortgages said that analysts in his department were aware of the shoddy lack of research behind bond ratings, but management determined that it wasn't the company's job to verify borrowers' abilities to pay their mortgages or to do any other form of due diligence.

"It was broached at meetings, but it was decided that once you do it for one, you do it for all of them," said the former analyst, who contacted McClatchy after reading the investigative piece. The former analyst demanded anonymity in order to protect his reputation on Wall Street.

The culture at Moody's, this former analyst said, was "don't attempt to look any further because it's not our job. The question always is, 'Who is going to pay for the due diligence?' "

The House legislation would direct ratings agencies to include at least two independent members on their boards of directors, and would mandate that compliance officers report to the boards. It wouldn't direct the Securities and Exchange Commission to work with the compliance officers, however, which could have helped regulators understand the looming sub-prime crisis in 2006 and 2007.

Moody's has refused to make top executives available to McClatchy, and one prominent member of its board of directors, Harvard University business law professor Robert Glauber, didn't return calls and e-mails requesting comment. Glauber headed the National Association of Securities Dealers from 2001 to 2006, a trade group that was merged into the Financial Industry Regulatory Authority, a self-regulation arm of the industry that failed to avert the global crisis.

One former Moody's chief compliance officer told McClatchy that more changes should be considered to strengthen compliance departments.

"These might include a provision that the designated compliance officer could only be hired and fired with the approval of the board, that he or she be appropriately qualified and not have been employed in one of the firm's business lines within the past three years, or for three years following their departure from the post, and that the SEC meet in person with the designated compliance officer on an annual basis rather than simply receive a report which has been reviewed and revised by management," Scott McCleskey said. He's now the U.S. managing editor at Complinet, an online service for financial risk managers.

The legislation would make it easier for investors to sue ratings agencies, but plaintiffs would have to prove outright falsehoods, not just negligence.

"This element is extremely difficult to prove where the rating agency effectively remains the sole source and arbiter of the information in question," Kolchinsky said.

The former Moody's analyst who spoke anonymously said the bill would benefit small individual investors. It would require the ratings agencies to make full public disclosures of their modeling and methodology behind particular ratings.