Earlier today, the United States Senate voted to confirm three nominees for positions on the Board of Directors of the Export-Import Bank of the United States.
Kimberly Reed will serve as President of the Bank and Chairwoman and two Directors, Judith Pryor and former Congressman Spencer Bachus (R-AL), will join her to constitute a three-member quorum on what is typically a five-member Board of Directors.
The significance of today’s Senate votes is that with a fully constituted quorum, the Bank can for the first time since July, 2015 approve export transactions greater than $10 million. A vote of the Board is required for large transactions and in the absence of a quorum, the Bank was unable to support exports of larger capital goods from American companies for more than three years. As a result, many transactions were lost to foreign competitors and some multi-national US companies felt that they had no choice but to sell goods/services to foreign buyers from European and other foreign facilities instead of US facilities in order to take advantage of the export credits offered by European and other foreign governments.
The Export-Import Bank of the United States has financed exports from US companies since 1934, including goods, services, and technologies. Through direct loans to foreign buyers, guaranteed loans from US banks, and through export credit insurance, Ex-Im Bank has been able to help American companies increase their foreign sales dramatically, especially in developing nations.
The gap in having a quorum resulted from a political stalemate in which some opponents of the Bank’s mission and operations were able to use Senate rules to hold up the nominations, notwithstanding the fact that the Senate Banking Committee had approved them overwhelmingly on more than one occasion. It has taken a change in Senate rules governing subcabinet nominations for today’s action to take place.
Once the Board quorum is formally sworn in, the Bank will be able to return to its prior tradition of weekly Board meetings to consider and approve transactions larger than $10 million. This bodes very well for US companies seeking to export goods, services, and technologies in competition with foreign companies that are supported by their own government export credit agencies.