Or at least, investors are skeptical that Sen. Franken’s attempt to rein in the conflicts of interest that riddled the likes of Moody’s  and the S&P unit of McGraw-Hill  during the recent housing boom will do any more financial damage to the companies.

Late Thursday, the Senate passed an amendment proposed by Franken (D-Minn.) that would create a board to divvy up the work of rating so-called structured securities — bonds chopped up by Wall Street for resale to institutions such as insurance companies and pension funds.

The board, by choosing who rates a given deal and tracking various agencies’ track records, would remove the incentive for agencies to lower their standards to win lucrative business from fee-besotted Wall Street underwriters.

It is widely acknowledged that the rating agencies took leave of their senses during the housing boom and slapped supposedly bulletproof triple-A ratings on thousands of securities tied to subprime mortgages and the like, all in exchange for hefty fees. Many of those securities were subsequently downgraded as mortgages went bad, leaving investors with hefty losses. Franken and his co-sponsors say their amendment will prevent a replay of that disaster.

“We’re cleaning up Wall Street’s dishonest system and replacing it with one that rewards accuracy instead of fraud,” said Franken (right).

But cleaning up that particular cesspool may not hurt the rating agencies very much, according to a report out Thursday from Bank of America Merrill Lynch. Analyst William Bird, who rates Moody’s buy, says that even if the amendment becomes law as part of the larger regulatory reform effort, the net impact to Moody’s and S&P will likely be “surprisingly modest.”

In large part, that’s because the structured securities market, whose mushrooming middecade growth drove huge earnings gains at the rating agencies, has collapsed. Structured finance revenue has fallen by two-thirds at Moody’s since the housing boom peaked in 2006, as huge losses on structured debt prompted buyers to wise up and stop buying.

So the amount of money the companies would leave on the table under the new plan is not all that great. Bird predicts each company could see a $16 million decline in structured product revenue, which would hit annual per-share earnings by 3 cents at Moody’s and 2 at McGraw-Hill. Bird expects Moody’s to make $1.89 a share this year. That’s down 25% from the company’s peak earnings earlier this decade.

But Bird sees the steep declines in the stocks so far this year — Moody’s is down 21%, McGraw-Hill 14% — as an opportunity to buy.

“We believe MCO will emerge from the other side of the storm with a still solid business model, a condition not being priced in the stock today,” Bird said.

Moody’s and S&P were both down less than 1% in trading Friday.