In December 2015, the U.S. Congress reauthorized the Export-Import Bank of the United States (U.S. Ex-Im) through September 30, 2019. The financing authority of U.S. Ex-Im had expired in June of 2015. This reauthorization legislation is part of the Fixing America’s Surface Transportation Act (FAST Act), which was passed by the U.S. Congress on December 3, 2015, and signed into law on December 4, 2015.
Changes in Authority
In addition to reauthorizing U.S. Ex-Im, the FAST Act made a number of changes to U.S. Ex-Im’s authority. These included:
- A reduction in the cap on U.S. Ex-Im’s outstanding total loans, guarantees and credit insurance from $140 billion to $135 billion,
- An increase in the required amount of U.S. Ex-Im’s lending to small businesses from 20% to 25%, and
- An increase in U.S. Ex-Im’s maximum loan size for medium-term financing (which is more than one year and up to seven years) from $10 million to $25 million.
Since 1934, U.S. Ex-Im has served as the official export credit agency of the U.S. government, providing access to competitive export financing for U.S. businesses. Its mission is to facilitate U.S. exports of goods and services to support U.S. employment. U.S. Ex-Im operates under a general statutory charter, which has been renewed numerous times, and was previously extended for nine months through June 30, 2015.
U.S. Ex-Im has identified key sectors and countries to facilitate U.S. export growth. These include construction, oil, natural gas and power generation in Africa, Asia, Europe and Latin America. U.S. Ex-Im’s main financial products are direct loans, loan guarantees, working capital finance and export credit insurance.
U.S. Ex-Im imposes a minimum amount of U.S. content (that is, U.S.-originated goods and services) in an export contract for which it is supplying financing. In order for medium- and long-term export transactions to receive the fullest extent of financing available, U.S. Ex-Im requires a minimum of 85% U.S. content. If the U.S. content is less than 85%, the amount of financing is decreased proportionately.
Under its statutory charter, any financing over $10 million must be approved by a majority of U.S. Ex-Im’s five-member board of directors. U.S. Ex-Im’s board currently has three vacancies. Until at least one additional director is appointed, U.S. Ex-Im will be unable to approve financings over $10 million. In January 2016, after withdrawing a nomination that had been pending since March 2015, President Obama nominated a new individual, John Mark McWatters, for one of the vacancies, but the Senate Banking, Housing and Urban Affairs Committee has not yet scheduled a hearing to hold a vote on the nomination.