The charter of the Export-Import Bank of the United States is due to expire on September 30, 2014. Based on recent events, it is unclear whether Congress will act before this date to extend the charter.
The Ex-Im Bank is the official export credit agency of the United States. Its purpose is to support U.S. jobs, and it accomplishes this goal by facilitating the financing of U.S. goods and services to foreign buyers when private sector lenders will not provide credit on their own. The Bank does this by offering loan guarantees, direct loans, export-credit insurance, and working capital guarantees to U.S. exporters and foreign buyers. The Ex-Im Bank’s programs are also aimed at helping U.S. exporters, large and small, compete against foreign exporters who are also provided with government-supported financing by their countries such as China, Russia, Brazil, and India.
In fiscal year 2013, the Ex-Im Bank authorized approximately $6.9 billion in direct loans, $14.9 billion in guarantees, and $5.4 billion in insurance products.
Founded in 1934, the Ex-Im Bank has not been without its critics from both ends of the political spectrum, who have disparaged the Bank as market distorting “corporate welfare.” Nonetheless, reauthorizing the Export-Import Bank had in the past been relatively non-controversial until the 2012 reauthorization, when soon-to-be-former House Majority Leader Eric Cantor helped negotiate a reauthorization for the Bank that passed the House despite opposition from 93 members.
This time around, however, the Bank’s future is more in doubt. If the Bank’s authorization is not extended by September 30, the Bank will no longer be able to make loans or offer any of its products. It will still exist but only to service its existing portfolio. Whether or not the economy feels an immediate impact on October 1, business leaders expect that a closure of the Bank could be far-reaching, affecting jobs that depend directly or indirectly on exports facilitated by Bank programs.