The Export-Import Bank of the United States (Ex-Im Bank or the Bank), a wholly owned U.S. government corporation, is the official export credit agency (ECA) of the United States. Its mission is to assist in the financing of U.S. exports of goods and services to support U.S. employment. It operates under a general statutory charter, the Export-Import Bank Act of 1945, as amended (P.L. 79-173; 12 U.S.C. §635 et seq.). The 114 th Congress may debate whether to renew Ex-Im Bank's authority and, if so, for how long and under what terms; and if not, the possibility of other policy options. Under the charter, Ex-Im Bank's financing must offer a "reasonable assurance of repayment" and must supplement, not compete with, private sources of financing. Ex-Im Bank also abides by the Organization for Economic Co-operation and Development (OECD) Arrangement on Officially Supported Export Credits (the "Arrangement"), which establishes terms and conditions for the export credit agencies of the United States and other participants (discussed later). For FY2014, Ex-Im Bank estimates that its authorizations of $20.5 billion are in support of $27.5 billion of U.S. exports and 164,000 U.S. jobs. In FY2014, Ex-Im Bank reported an exposure of $112.0 billion—below the $140 billion statutory cap for that year—distributed across financial products, geographic regions, and economic sectors (see Figure 5 ). Congress also allowed carryover funds of up to $10 million to remain available until September 30, 2017. For FY2015, the Bank has an upper limit of $106.3 million for administrative expenses, funding of $5.8 million for the OIG, and up to $10 million in carryover authority until September 30, 2018. Ex-Im Bank also has a claims and recovery process for transactions in default. The Bank reported a default rate of 0.175% as of September 2014, which it provides quarterly to Congress. Ex-Im Bank's authority has been extended through June 30, 2015, by the FY2015 continuing resolution (CR) (§147 of P.L. 113-164 ). Members of Congress hold a range of views regarding how to address the status of Ex-Im Bank's authority. Proponents of Ex-Im Bank reauthorization hold that the Bank is critical in supporting U.S. jobs and U.S. exports by addressing market failures (such as imperfect information and barriers to entry) and leveling the playing field by countering foreign government-backed export financing activity. In the 2012 reauthorization legislation, Congress required Ex-Im Bank to review its domestic content policy for medium- and long-term transactions to "examine and evaluate the effectiveness of the Bank's policy in maintaining and creating jobs in the [United States]; and in contributing to a stronger national economy through the export of goods and services" by taking into account various factors, including U.S. employment considerations and competitiveness to foreign ECAs. International Government-Backed Export Credit Activity
The Export-Import Bank of the United States (Ex-Im Bank or the Bank), a wholly owned U.S. government corporation, is the official export credit agency (ECA) of the United States. Its mission is to assist in the financing of U.S. exports of goods and services to support U.S. employment. The FY2015 continuing resolution (§147 of P.L. 113-164) extends its general statutory charter (Export-Import Bank Act of 1945, as amended, 12 U.S.C. §635 et seq.) through June 30, 2015. The 114th Congress may debate whether to renew Ex-Im Bank's authority; if so, for how long and under what terms; and if not, other policy alternatives.
Under its charter, Ex-Im Bank's financing must have a "reasonable assurance of repayment" and should supplement, and not compete with, private capital, among other requirements. The Bank also abides by international rules for government-backed export credit activity under the Organization for Economic Co-operation and Development (OECD).
In FY2014, Ex-Im Bank reported authorizing about $20.5 billion for 3,746 transactions of finance and insurance, to support an estimated $27.5 billion in U.S. exports of goods and services and 164,000 U.S. jobs. Its overall portfolio exposure level in FY2014 was $112 billion—below the $140 billion statutory cap for that year. Ex-Im Bank assesses credit and other risks of proposed transactions, monitors current commitments for risks, and maintains reserves against potential losses. It reported a default rate of 0.175% as of September 2014 (provided quarterly to Congress) and, since 1992, an average recovery rate of 50% for transactions in default.
Ex-Im Bank uses offsetting collections to cover costs of its operations. FY2015 appropriations legislation set an upper limit of $106.3 million for the Bank's administrative expenses, provided $5.8 million for its Office of Inspector General (OIG), and allowed carryover funds of up to $10 million to remain available until September 30, 2018.
Members of Congress hold a range of views on Ex-Im Bank. Proponents assert that the Bank supports U.S. exports by addressing market failures that dampen export levels and helping U.S. exporters compete against foreign companies backed by their governments' ECAs. Critics oppose the use of taxpayer funds for private benefit, whether for large or small businesses, and contend that the private sector is more efficient in financing exports. The reauthorization issues facing Congress are two-fold. The first issue is whether to renew Ex-Im Bank's authority. Scenarios include renewal in a "clean" manner or with reforms; a sunset in authority; and a reorganization of its functions. Second, should Congress choose to renew its authority, specific issues include
For how long should Ex-Im Bank be reauthorized? Should Ex-Im Bank's exposure cap be adjusted and if so, by what amount? What revisions should be made to Ex-Im Bank's policies, if any? How well does the Bank manage the risks associated with its portfolio? How should the United States approach international disciplines to guide government-backed export credit activity?