Credit Rating Agency Reform Act of 2006

Requires the SEC within 90 days of receiving an application to grant registration or institute proceedings to determine whether not to. Requires the SEC to grant registration unless the applicant does not have adequate financial and managerial resources to consistently produce credit ratings with integrity and to comply materially with the procedures and methodologies disclosed in its application.

Requires each NRSRO to certify annually that the application documents (other than the QIB certifications) remain accurate, and list any material changes that occurred.

Requires SEC rules to be narrowly tailored, and not purport to regulate either the substance of credit ratings or the procedures and methodologies by which NRSROs determine credit ratings.

Provides for censure, denial, suspension, or revocation of NRSRO registration.

States that it shall be unlawful for: (1) an NRSRO to represent or imply that it has been designated, sponsored, recommended, or approved, or that its abilities or qualifications have in any respect been passed upon, by the United States or any federal agency, officer, or employee; or (2) a credit rating agency that is not registered as a NRSRO under this Act to state that it is so registered.

Requires each NRSRO to establish and enforce written policies and procedures to: (1) prevent the misuse of nonpublic information; and (2) manage conflicts of interest.

Directs the SEC to issue final rules to prohibit unfair, coercive, or abusive acts or practices by NRSROs. Includes among such acts: (1) conditioning or threatening to condition an issuer's credit rating on the purchase of other services or products; (2) lowering or threatening to lower a credit rating, or refusing to rate securities or money market instruments issued by an asset pool, unless a portion of the assets in the pool also is rated by the NRSRO; and (3) modifying or threatening to modify a credit rating based on whether the issuer or an affiliate will purchase other services from the NRSRO.

Requires an NRSRO to: (1) designate a compliance officer to ensure compliance with securities laws, rules, and regulations; and (2) furnish the SEC with financial statements certified by an independent public accountant.

Makes registration under this Act the sole method of NRSRO registration. Prohibits any credit rating agency treated as an NRSRO before enactment of this Act from relying on no-action relief for continued treatment as an NRSRO in lieu of active registration.

Amends the following Acts to reflect the provisions of this Act: (1) Securities Exchange Act of 1934; (2) Investment Company Act of 1940; (3) Investment Advisers Act of 1940; (4) Housing and Community Development Act of 1992; and (5) Higher Education Act of 1965.

(Sec. 6) Directs the SEC to report annually to specified congressional committees on: (1) applicants for NRSRO registration; (2) actions taken on such applications; and (3) the views of the SEC on the state of competition, transparency, and conflicts of interest among NRSROs.

(Sec. 7) Requires the Comptroller General to study and report to certain congressional committees on the impact of this Act upon: (1) the quality of credit ratings issued by NRSROs; (2) the financial markets; (3) competition among credit rating agencies; and (4) the incidence of inappropriate conflicts of interest and sales practices by NRSROs.