The US Export-Import Bank (US Exim) has reopened after five months of hiatus, following an overwhelming bipartisan vote for a highway bill that included its reauthorisation.
The bill was passed with 83 to 16 vote in the Senate and 359 to 65 vote in the House of Representatives last Thursday (December 3). It was then sent to President Obama, who signed it into law on December 4.
Importantly, US Exim is now out of the woods until September 30, 2019, giving much needed relief to US exporters who lost significant business to international competition due to the uncertainty of financial support.
Tod Burwell, president and CEO of transaction banking association BAFT, says: “The reauthorisation through fiscal 2019 provides reassurance to American companies that have suffered from a lack of financing during the five months that the bank’s charter lapsed. BAFT is encouraged that trade finance can be restored and jobs that have already been lost or were at risk of being lost may have been saved by passage of this measure.”
The bank’s charter expired on June 30, and with opponents blocking a vote for its reauthorisation in both chambers of Congress, had to close its doors. The following five months saw US Exim supporters lobbying government and devising legislative ways to get its charter extended. In the end, the House of Representatives called a rarely-used “discharge petition” to force the vote, going against financial services committee chairman Jeb Hensarling’s leadership in October.
By working in solidarity with members across the aisle – and with a great deal of perseverance – we showed that a determined majority of committed members will always prevail. Maxine Waters, congresswoman
US Exim’s reauthorisation was then attached to an urgent transportation bill that was already widely supported within Congress, ensuring its timely passage.
“To say that we took every opportunity possible to push for the reauthorization of the bank would be an understatement,” says Democrat congresswoman Maxine Waters, a member of the financial services committee. “By joining with House Republicans (…), we were able to use an historic discharge petition process to overcome the obstruction of a small band of extreme anti-government members, who at that point had actually succeeded in shutting the bank down.
“But by working in solidarity with members across the aisle – and with a great deal of perseverance – we showed that a determined majority of committed members will always prevail.”
In the five months that the American export credit agency was unable to accept new business, companies large and small lobbied Congress for reauthorisation, with General Electrics and Boeing threatening to move production overseas – and in some cases, doing it.
Gary Mendell, president of US trade finance company Meridian Finance Group, explains: “During the lapse in [US Exim’s] authority, the agency continued supporting its existing customers but was unable to take on new transactions. While carrying on our work with [US Exim] to the extent this remained possible, Meridian joined with insurance companies, banks, and our other private-sector partners to try and fill the gap in the availability of trade finance. In some cases we were able to improvise successfully; in others our clients have had to stand by awaiting [US Exim’s] return.”
In a statement published on the US Exim website, chairman Fred Hochberg asks exporters for patience while the agency gets its processes back up and running, adding that he expects the online application system to be fully operational by December 8.