The Export-Import Bank Sees New Life
The U.S. Export-Import Bank may receive a new breath of life after a small group of Republicans joined Democrats in filing a discharge petition Oct. 9 to force a vote in the U.S. House of Representatives that would renew the bank’s charter.
A discharge petition is typically used when a chairman of a congressional committee refuses to place a bill or resolution on the committee’s agenda. In this case, the chairman of the House Financial Services Committee, Congressman Jeb Hensarling of Texas, has refused to allow committee members to review and pass legislation that would reauthorize the bank.
The Export-Import Bank, also known as the ExIm Bank, is the official credit agency of the U.S. government. Acting as a lender of last resort, the bank aims to provide export credit, financing and loan guarantees to help American businesses export.
Hensarling has been leading the charge against the bank for several years. This fight has divided House Republicans into two camps: supporters and critics of the ExIm Bank. Opponents call the bank the face of crony capitalism, but supporters argue the bank helps level the global playing field for American small businesses and acts as a lender of last resort. In addition, the bank reportedly generates $675 million in profits annually, which it sends to the U.S. Treasury.
Opponents of the ExIm Bank scored a victory in late June when Congress failed to extend the bank’s charter. Though the bank is allowed to conclude financial deals that it accepted prior to the bank’s expiration, it is unable to accept new applicants.
With the chairman refusing to allow his committee to debate or vote on the bank, Congressman Stephen Fincher of Tennessee led efforts in getting nearly 50 Republican lawmakers to join House Democrats to pass a discharge petition. It was the first successful discharge petition since the controversial McCain-Feingold Bipartisan Campaign Reform Act in 2002.
“People in my district, and across the country, are demanding more economic opportunities and expansion of the job market,” Fincher said. “We can meet their demands by taking action now and supporting reforms to the ExIm Bank that improve its ability to support jobs and growth in communities across the nation."
All lawmakers in the U.S. House of Representatives will now have the opportunity to vote on H.R. 597, The Reform Exports and Expand the American Economy Act. Introduced in January, this bill would not only extend the bank’s charter until 2019, but it would also enact several reforms, according to a press release by Fincher’s congressional office.
Some of the reforms would include increasing capital requirements for loan-loss reserves with the goal of protecting tax payers from future defaults and provisions to ensure that the bank does not compete with private lenders. The bill also encourages the president to utilize multilateral negotiations to reign in official export credit from developed and developing countries.
If passed by the House, the Senate must then vote on the legislation. The Senate voted overwhelmingly to attach an extension of the bank to highway funding legislation in July, however, Senate Majority Leader Mitch McConnell opposes the bank’s reauthorization. McConnell’s spokesman Don Stewart said “the Senate is not going to spend a week on a bill that the leader doesn’t support.”
Congress has about two months until Congress adjourns this year. Though it seems likely that the House will vote on bank reauthorization, it remains to be seen whether Republican senators will reach across the aisle to extend the bank’s charter.