Since the federal government didn’t have authority to regulate the secondary mortgage market, it was up to the big CRA’s, like Moody’s and Standard & Poor’s, to judge if the bonds were investment grade.

But an investigation by the Securities and Exchange Commission this July revealed that the CRA’s didn’t know how to rate credit default swaps. So, partly in order to keep doing business with the subprime lenders and investment banks, the CRA’s between 2002-06 often just rated the securities and swaps “AAA,” the best rating a bond can have.

Today the CEO’s from the three top credit rating agencies — Moody’s, S&P and Fitch — are testifying before the House oversight committee. Rep. Henry A. Waxman, (D-Ca.) the committee chairman, just noted that these CEO’s earned more than $80 million — despite the fact they were a “colossal failure” in stemming the mortgage crisis.

Rep. Chris Shays (R-Conn.), meanwhile, concocted an elaborate analogy about how the CRA’s were referees paid off by the players.

Will the committee tie their oversight into the larger congressional fight over how to revamp Washington’s policing of Wall Street? Will the Republicans stay monomaniacally focused on Fannie Mae and Freddie Mac?

Stay tuned for updates.