Commerce Secretary Voices Support for Ex-Im Bank
APRIL 11, 2017
U.S. Commerce Secretary Wilbur Ross voiced support for the Export-Import (Ex-Im) Bank at its annual conference last week stating, “The bank is part of a domestically focused trade toolbox that this administration will continue to focus on in the coming months. We will use that tool box to rebalance our trade policy in order to put American workers first.”
The Ex-Im Bank is an independent federal agency that provides export-credit insurance, working capital, loan guarantees, lease guarantees and direct loans to both U.S. manufacturers and their international customers, presuming certain criteria and eligibility requirements are met.
Essentially, the bank provides loans and guarantees to foreign purchasers who buy U.S. goods and also provides assurances to those U.S. manufacturers via export-credit insurance in the event something occurs that prevents payment in-full for the products sold.
Despite venturing into markets that private lenders do not, the Ex-Im Bank maintains a default rate of less than two percent. Further, the Ex-Im Bank is one of the few federal agencies that is self-sustaining, as it covered its own operating expenses and sent nearly $680 million to the U.S. Treasury in 2014 from fees and interest collected.
However, Ex-Im has been unable to approve financing in excess of $10 million for several years now because its Board of Directors does not have a sufficient number of members for the quorum needed to consider and sign off on larger loans.
Rep. Chris Collins (R-NY), who formerly worked for Westinghouse Electric and then owned his own gear manufacturing business, stated at the meeting, “We asked [President Trump] directly about the five board seats. The president looked to his right and to his left and said can you give me some names, I am all in.”
As some ILMA members either directly export or sell products to companies with sales agreements that implicate the Ex-Im Bank, appointing Board members and resuming full functionality is important for these members and U.S. manufacturers.