WASHINGTON BUREAU — Members of the Senate have voted 64-35 to approve a financial services bill amendment that would shake up the U.S. credit rating system.

The amendment, S.A. 3991, was sponsored by Sen. Al Franken, D-Minn.

The amendment received bipartisan support even though it was opposed by Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, who oversaw the drafting of the underlying bill, S. 3217, the Restoring Financial Stability Act of 2010.

The vote came a day after New York Attorney General Andrew Cuomo announced that he is starting an investigation aimed at determining whether eight investment banks gave misleading data to rating agencies in hopes of inflating the ratings of mortgage securities.

Today may be the last day, or one of the last days, when lawmakers will consider S. 3217 amendments. Senate Majority Leader Harry Reid, D-Nev., is expected to file a motion today calling for a Monday vote on limiting debate to an additional 30 hours. Few floor votes are expected Friday.

If members of the Senate limit debate by approving a cloture motion, a final vote could occur Wednesday.

The Franken amendment would give the U.S. Securities and Exchange Commission the authority to set up a Credit Rating Agency Board.

The proposed CRAB would be made up of investors and independent regulators. The new body would assign a credit rater for a security.

The Franken amendment would let the SEC would determine the size of the board. The majority of members would be investors, with at least one member representing a credit-rating company and at least one member representing an investment bank.

The board would conduct an annual assessment of each credit-rating company to scrutinize the firm’s accuracy in grading debt compared with competitors.

Although credit-rating companies would set fees, the SEC would have authority to make sure payments were “reasonable.”

In seeking support for amendment, Franken said he wants to end the “staggering conflict of interest affecting” credit ratings of securities by having an independent third party assign the credit rating agency responsible for coming up with an initial rating for newly issued complex financial products.

“My amendment puts investors in charge, not the government,” Franken said.

In suggesting that the amendment be changed to call for a study of the issue, Dodd said the bill he drafted already has “40 pages of safeguards to strengthen the SEC, empower investors, and to make rating agencies far more accountable and responsible.”

Chris Atkins, a spokesman for Standard & Poor’s, New York, said he is disappointed that the amendment passed.

The Franken amendment “could result in a number of unintended consequences,” Atkins said.

If the amendment ultimately becomes law, credit rating firms would have less incentive to compete with one another, pursue innovation and improve their models, criteria and methodologies, Atkins said.

“This could lead to more homogenized rating opinions and, ultimately, deprive investors of valuable, differentiated opinions on credit risk,” Atkins said. “Most important, having the rating agency assigned by a third party, whether the government or its designee, could lead investors to believe the resulting ratings were endorsed by the government, thereby encouraging over-reliance on the ratings.”

Critical support for the amendment came from Republicans.

Sen. Chuck Grassley, R-Iowa, the highest-ranking Republican member of the Senate Finance Committee, supported the amendment, as did Sen. Roger Wicker, R-Miss.

Grassley said he is supporting the Franken amendment to end conflicts of interest.

“If the credit rating agencies are going to make a contribution to market integrity, then they can’t be compromised,” he said.

“This amendment creates a firewall so that a rating agency can be selected independent of an issuer,” Grassley said. “It goes after conflicts of interest between rating agencies and issuers, and that’s a very important area where due diligence was missing leading up to the financial crisis of 2008.”