Since 1934, the Export-Import Bank (Exim) has been the official U.S. export credit agency, financing the purchase of U.S. manufacturing exports by foreign governments and companies when private lenders are unavailable or unwilling. On June 30, 2015, the bank’s charter expired and was not renewed, restricting its ability to extend new commitments, but allowing it to administer previous obligations. A possibility for renewal of the bank’s federal charter remains, however, and continuing debate in Congress is likely.
Background. Exim is an independent, self-sustaining Executive Branch agency with the mission of supporting American jobs by facilitating the export of U.S. goods and services. Its charter says the bank cannot compete with or detract from the private financial sector, but merely fill in the gap for American businesses when private sector lenders are unable or unwilling to provide financing. The charter requires bank-authorized transactions to demonstrate reasonable assurance of repayment and abide by international rules for government-backed export credit activity under the Organization for Economic Co operation and Development (OECD). The Exim bank extends benefits via three main mechanisms: direct loans, guarantees and insurance. Because it is backed by the full faith and credit of the United States, Exim assumes credit and country risks that the private sector is unable or unwilling to accept.
Critics say the Exim bank is an example of government “crony capitalism,” while supporters claim it is important to American competitiveness internationally.