Ex-Im Bank Reauthorization Status

The Export-Import Bank (Ex-Im Bank), a self-sustaining federal agency, is the official export credit agency (ECA) of the U.S. It helps finance American exports of manufactured goods and services, with the objective of contributing to the employment of U.S. workforce, primarily in circumstances when alternative financing is not available. Ex-Im Bank’s main programs are direct loans, loan guarantees, working capital guarantees and export credit insurance.

The Bank operates under a renewable charter, the Export-Import Bank Act of 1945, as amended. Ex-Im Bank’s most recent reauthorization was in 2006, when Congress extended the Bank’s authority through FY2011 which means unless it is reauthorized the Bank’s charter will expire on Sept. 30, 2011. Since its inception, Ex-Im Bank programs have supported more than $400 billion in U.S. exports.

The Bank enables U.S. companies — large and small — to turn export opportunities into real sales that helps to maintain and create U.S. jobs and contribute to a stronger national economy. For FY 2010, Ex-Im supported an estimated $24 billion in export sales, and 227,000 U.S. jobs at over 3,300 companies.

On June 1, 2011, H.R. 2072, the Securing American Jobs Through Exports Act of 2011, was introduced and referred to the House Financial Services Committee. H.R. 2072, which would extend Ex-Im Bank’s authority through Sept. 30, 2015 was approved by a voice vote on June 22 and ordered to be reported favorably to the full House floor for final passage—which will likely occur when Congress returns from August recess.

During deliberation of H.R. 2072, an amendment was adopted by the House Financial Services Committee barring Ex-Im from providing assistance to companies that conduct certain business with Iran. In a voice vote, the committee approved the amendment sponsored by Reps. John Campbell (R-Calif.) and Brad Sherman (D-Calif.), and now goes to the full House for its consideration.

When SBEA Board Member David Ickert testified before the Senate Banking Subcommittee on Security and International Trade and Finance on the reauthorization Ex-Im Bank, he highlighted several key provisions of the Ex-Im Charter that are very important and necessary to small-business exporters. While H.R. 2072 does not change the language, it also fails to even mention these critical provisions for small-business exporters. While remaining unchanged, SBEA believe these provisions should at least be stated in the Findings section of any reauthorization bill. They include the Small Business Division within the Bank that is responsible for conducting research, tailoring products to small business needs and increasing loans to small business concerns. More specifically:

Sec. 2 (b) (1) (E) (v) – The not less than twenty percent direct financing authority for small business is an absolute must for continuity of emphasis to small business in the long term. Leaving this clause unchanged is necessary and any new “formulas” that turn the twenty percent into a goal rather than a mandate, or allow Ex-Im to avoid the mandate in certain years, should not be an option. The main objective is to improve direct access to Ex-Im capital by small business, year in and year out.

Sec. 3 (d) (1) A and 3 (d) (2) (A) – Language that mandates the existence of the Advisory Committee and the section requiring at least three members of that Committee be representatives of small business. Representation on input to Ex-Im is vital for small business.

Sec. 8 (b) (3) (f) – The section requiring reports to Congress if the small business authority percent is not met and details of how this would be fixed if the twenty percent is not met.

SBEA has reiterated to Congress several other ways to deepen the commitment to small business that should also be considered. One such consideration is making the Senior Vice President for Small Business a member of the credit committee, who reports directly to the President, and is a voting member of the credit committee or any successor entity.  The Sr. Vice President must have a sense of the “big picture” in terms of how the agency reasons as it decides which applicants are approved, and which are declined, for credit worthiness reasons, and therefore must have a say in these decisions.

SBEA is working to ensure that reauthorization of the Bank is done in a timely manner. SBEA’s continued focus is on educating Congress about the Bank’ critical role in supporting American exports in the face of competition with aggressive support from other ECAs as well as the need for a competitive Ex-Im Bank.