The Future of the Export-Import Bank Remains Uncertain

June 24, 2015

    For the first time since its founding in 1934, the Export-Import Bank may have to close its doors at the end of the month due to the current political partisan divide and a busy legislative agenda.

    The Export-Import Bank has taken on an assortment of roles in the past 81 years, earning the title of the nation’s chief export credit agency. The bank supplies financing to foreign businesses and governments that agree to buy U.S. products, as well as provides low interest guaranteed loans to U.S. exporters. These roles have helped to boost the U.S. economy and trade. In 2014 alone, the agency provided $20.5 billion in credit assistance with no cost to tax payers. The bank was also able to return $675 million to the U.S. Treasury from that year’s interest and fees. Despite these results and the bank’s ability to increase sales for U.S. products abroad, the bank continues to face potential closure.

    The agency is no stranger to opposition. In the past, lobbying and last minute political maneuvers have managed to keep the bank open. Nevertheless, it looks like they will not be so lucky this time around due to an unprecedented amount of resistance from influential members of Congress. House Republicans are pushing for the bank to close its doors, while Democrats are backing the agency as an institution that supports jobs. This lack of Republican support could block the reauthorization of the bank’s charter.

    Individuals on both sides of the issue believe that Congress will eventually reauthorize the bank, but not before the charter ends on June 30^th. Even with a brief closure of the bank, consequences remain as sales would undeniably take a hit and foreign rivals would begin to doubt the bank’s capabilities.

    In the case that Congress does not reauthorize the Ex-Im Bank, several businesses would be affected in a variety of ways. Large corporations, such as Boeing and General Electric, would have to carry more of their own risks when participating in the international market. While still significant, this implication is minor compared to how small- and medium- sized agencies would be affected. Since smaller companies rely on the bank to make loans to foreign buyers, these businesses would most likely experience large hits to their sales and profit which could prove to be fatal. Despite these potential implications of shutting down the agency, the future of the Export-Import Bank remains uncertain.

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