Most of the agencies’ interactions and the fees they earn are with the fims they rate, not the investors who use the ratings. This circumstance can create misaligned incentives. In addition, the U.S. government has made credit rating a closed and low-competition industry that seems to have unusual immunity under the first Amendment from being sued for poor ratings. This immunity prevents investors from seeking damages when the agencies make mistakes. The misaligned incentives, lack of disciplinary market and legal forces can make the agencies lax in their watchdog duties.