Export–Import Bank of the United States
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The Export–Import Bank of the United States (EXIM) is the official
export credit agency An export credit agency (known in trade finance as an ECA) or investment insurance agency is a private or quasi-governmental institution that acts as an intermediary between national governments and exporters to issue export insurance solutions ...
(ECA) of the
United States federal government The federal government of the United States (U.S. federal government or U.S. government) is the Federation#Federal governments, national government of the United States, a federal republic located primarily in North America, composed of 50 ...
. Operating as a wholly owned federal
government corporation A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governme ...
, the bank "assists in financing and facilitating U.S. exports of goods and services", particularly when private sector lenders are unable or unwilling to provide financing. Its current chairman and president, Reta Jo Lewis, was confirmed by the Senate on February 9, 2022. The Export-Import Bank was established in 1934 as the Export-Import Bank of Washington by an
executive order In the United States, an executive order is a directive by the president of the United States that manages operations of the federal government. The legal or constitutional basis for executive orders has multiple sources. Article Two of t ...
of President
Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...
. Its stated goal was "to aid in financing and to facilitate exports and imports and the exchange of commodities between the United States and other Nations or the agencies or nationals thereof." The bank's first transaction was a $3.8 million loan to Cuba in 1935 for the purchase of U.S. silver ingots. In 1945, it was made an
independent agency A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government authority that is responsible for exercising autonomous dominion over some area of human activity in a licensing and regulati ...
within the
executive branch The Executive, also referred as the Executive branch or Executive power, is the term commonly used to describe that part of government which enforces the law, and has overall responsibility for the governance of a State (polity), state. In poli ...
by
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of a ...
. Under federal law, the EXIM must be reauthorized by Congress every four to five years. Following a brief lapse in Congressional authorization in July 1, 2015, which became Public Law 112-122 on May 30, 2012.House Joint Resolution 124
which became Public Law No: 113-164 on September 19, 2014.
which prevented the bank from engaging in new business, it was reauthorized through September 2019 via the
Fixing America's Surface Transportation Act The Fixing America's Surface Transportation Act or the FAST Act is a funding and authorization bill to govern United States federal surface transportation spending. It was passed by Congress on December 3, 2015, and President Barack Obama signed ...
of December 2015. In December 2019, President Donald Trump signed the Export-Import Bank Extension into law as part of the Further Consolidated Appropriations Act, 2020, which authorized the bank until December 31st, 2026. Over its lifetime, the Export-Import Bank has helped finance several historic projects including the
Pan-American Highway The Pan-American Highway (french: (Auto)route panaméricaine/transaméricaine; pt, Rodovia/Auto-estrada Pan-americana; es, Autopista/Carretera/Ruta Panamericana) is a network of roads stretching across the Americas and measuring about in to ...
, the
Burma Road The Burma Road () was a road linking Burma (now known as Myanmar) with southwest China. Its terminals were Kunming, Yunnan, and Lashio, Burma. It was built while Burma was a British colony to convey supplies to China during the Second Sino ...
, and post-WWII reconstruction. While supporters argue that the bank allows small and medium sized business to participate in the global market, critics allege that it shows favoritism to large corporations and special interests.


Overview

The Export–Import Bank of the United States (EXIM) is a government agency that provides a variety of tools intended to aid the export of American goods and services. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. EXIM equips U.S exporters and their customers with tools such as buyer financing, export credit insurance, and access to working capital. Second, when U.S exporters face foreign competition backed by other governments, EXIM provides buyer financing to match or counter the financing offered by almost 96 ECAs around the world. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012. The Charter details the Bank's authorities and limitations. Among them is the principle that EXIM does not compete with private sector lenders, but rather provides financing for transactions that would otherwise not occur because commercial lenders are either unable or unwilling to accept the political or commercial risk inherent in the deal. The EXIM's products are intended to assist export sales for any American export company regardless of size. The bank's charter provides that EXIM makes available "not less than 20%" of its lending authority to small businesses although they have often fallen short of the 20% threshold. In fiscal year 2013 however, 76% of the value of loans and guarantees went to the top 10 recipients. Similar banks, known generally as
export credit agencies An export credit agency (known in trade finance as an ECA) or investment insurance agency is a private or quasi-governmental institution that acts as an intermediary between national governments and exporters to issue export insurance solutions ...
(ECAs), are operated by 60 foreign countries. As the United States is a member of the
Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organization, intergovernmental organisation with 38 member countries ...
(OECD) they conduct their activities by obeying OECD rules and principles. The goal is to permit exporters in various countries to compete on the basis of the quality of their goods and services, not on preferential financing terms. ECAs of countries, which are not participants of the OECD, such as the
China Exim Bank China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's List of countries and dependencies by population, most populous country, with a Population of China, population exceeding 1.4 billion, slig ...
, Ex-Im Bank of Russia, Brazil, and India, are not required by their governments to follow OECD rules.


Offices

The bank has offices in Chicago, Detroit, Minneapolis, New York, Miami, Atlanta, Houston, McKinney (Dallas), Orange County (California), San Diego, San Francisco and Seattle. *
R. Walton Moore Robert Walton Moore (February 6, 1859 – February 8, 1941) was an American politician. A lifelong resident of Fairfax, Virginia, he served as a state senator, member of the Virginia Constitutional Convention of 1902, with the Interstate Commerc ...
, (Chairman) 1934–1941 * George N. Peek, (President) 1934–1935 *
R. Walton Moore Robert Walton Moore (February 6, 1859 – February 8, 1941) was an American politician. A lifelong resident of Fairfax, Virginia, he served as a state senator, member of the Virginia Constitutional Convention of 1902, with the Interstate Commerc ...
, (Chairman) 1934–1941 * Warren Lee Pierson, (President) 1936–1945 *
Wayne Chatfield-Taylor Wayne Chatfield-Taylor (December 19, 1893 – November 22, 1967 Events January * January 1 – Canada begins a year-long celebration of the 100th anniversary of Confederation, featuring the Expo 67 World's Fair. * January 5 ** Spain and ...
, (President) 1945 *
Jesse H. Jones Jesse Holman Jones (April 5, 1874June 1, 1956) was an American Democratic politician and entrepreneur from Houston, Texas. Jones managed a Tennessee tobacco factory at age fourteen, and at nineteen, he was put in charge of his uncle's lumbery ...
, (Chairman) 1941–1943 * Leo T. Crowley, (Chairman) 1943–1945 * William McC. Martin, Jr., (Chairman) 1946–1949 * Herbert E. Gaston, (Chairman) 1949–1953 * Glen E. Edgerton, (Chairman) 1953–1953 * Glen E. Edgerton, (Chairman) 1954–1955 * Lynn U. Strambaugh, (Vice Chairman) 1954–1960 * Samuel C. Waugh, (Chairman) 1955–1961 * Tom Killefer, (Vice Chairman) 1960–1962 * Harold F. Linder, (Chairman) 1961–1968 * Walter C. Sauer, (Vice Chairman) 1962–1976 * Henry Kearns, (Chairman) 1969–1973 * William J. Casey, (Chairman) 1974–1976 * Stephen M. DuBrul Jr., (Chairman) 1976–1977 * Delio E. Gianturco, (Vice Chairman) 1976–1977 * John L. Moore, Jr., (Chairman) 1977–1981 * H. K. Allen, (Vice Chairman) 1978–1981 * William H. Draper III, (Chairman) 1981–1986 * Charles E. Lord, (Vice Chairman) 1982–1983 * John A. Bohn, Jr., (Vice Chairman) 1984–1986 * John A. Bohn, Jr., (Chairman) 1986–1989 * William F. Ryan, (Vice Chairman) 1986–1989 * John D. Macomber, (Chairman) 1989–1992 * Eugene K. Lawson, (Vice Chairman) 1989–1993 * Rita M. Rodriguez, (Acting Chairman) 1993–1993 * Kenneth D. Brody, (Chairman) 1993–1995 * Martin A. Kamarck, (Vice Chairman) 1993–1996 * Martin A. Kamarck, (Chairman) 1996–1997 * Rita M. Rodriguez, (Acting Chairman) 1997–1997 *
James A. Harmon James A. Harmon (born October 12, 1935) is chairman of thEgyptian-American Enterprise Fund and an Americans, American fund manager; founder, chairman and chief investment officer of Caravel Management LLC; longtime investment banker; and co-chairm ...
, (Chairman) 1997–2001 * Jackie M. Clegg, (Vice Chairman) 1997–2001 * John E. Robson, (Chairman) 2001–2002 * Eduardo Aguirre, (Vice Chairman) 2001–2003 *
Philip Merrill Philip Merrill (April 28, 1934 – June 10, 2006) was an American diplomat, publisher, banker, and philanthropist. Career Born Philip Merrill Levine, he was a graduate of Cornell University and Harvard Business School. At Cornell, he was manag ...
, (Chairman) 2002–2005 *
April Foley April H. Foley (born 1947) is an American former diplomat who served as the U.S. ambassador to Hungary from 2006 to 2009. She was the chair of the board of trustees of The Hungary Initiatives Foundation. Foley attributed her appointment as ambass ...
, (Vice Chairman) 2003–2005 * James H. Lambright, (Chairman) 2005–2009 * Linda M. Conlin, (Vice Chairman 2006–2009) * Wanda Felton, (Vice Chairman) 2011–2013,2014–2016 * John A. McAdams, (Acting Vice Chairman) 2013 *
Fred P. Hochberg Fred Philip Hochberg (born February 3, 1952) is an American businessman and civic leader. After nearly two decades as an executive, including five years as President at the Lillian Vernon Corporation, he then served in various leadership roles a ...
, (Chairman) 2009–2017 * Charles J. Hall, (Acting Vice Chairman) 2016–2017 (Acting Chairman) 2017 *
Scott Schloegel Scott may refer to: Places Canada * Scott, Quebec, municipality in the Nouvelle-Beauce regional municipality in Quebec * Scott, Saskatchewan, a town in the Rural Municipality of Tramping Lake No. 380 * Rural Municipality of Scott No. 98, Saskat ...
, (Acting Vice Chairman) 2017–2019 *
Jeffrey Gerrish Jeffrey Gerrish is an American lawyer. He previously served as the Deputy United States Trade Representative, Gerrish was previously a partner in the International Trade Group at Skadden, Arps, Slate, Meagher & Flom. Gerrish was a member of Pre ...
, (Acting Chairman) 2018–2019 *
Kimberly A. Reed Kimberly A. Reed (born March 11, 1971) is an American attorney who served as the Chairman and President of the Export–Import Bank of the United States from 2019 to 2021. She was sworn in on May 9, 2019. Environmental groups have criticized R ...
, (Chairman) 2019–2021 * Reta Jo Lewis, (Chairman) 2022–present * William McC. Martin, Jr. 1945–1946 * Clarence E. Gauss 1946–1952 * Wilson L. Townsend 1952–1953 * Hawthorne Arey 1949–1953 * Hawthorne Arey 1954–1961 * George A. Blowers 1954–1961 *
Vance Brand Vance DeVoe Brand (born May 9, 1931) is an American naval officer, aviator, aeronautical engineer, test pilot, and NASA astronaut. He served as command module pilot during the first U.S.-Soviet joint spaceflight in 1975, and as commander of thr ...
1954–1959 * James S. Bush 1959–1963 *
George Docking George Docking (February 23, 1904 – January 20, 1964) was an American businessman who served as the 35th governor of Kansas (1957–1961). He was a member of the Democratic Party. Biography Born in Clay Center, Kansas, Docking was educated i ...
1961–1964 * Charles M. Meriwether 1961–1965 * Elizabeth S. May 1964–1969 * Hobart Taylor, Jr. 1965–1968 *
Tom Lilley Thomas Lilley (13 December 1899 – 1964) was a professional association football, footballer who played as a full back (association football), full back. He made 85 appearances in the English Football League, Football League playing for Hudders ...
1965–1972 *
John C. Clark John Chamberlain Clark (January 14, 1793 – October 25, 1852) was an American lawyer and politician who served four terms as a United States representative from New York from 1827 to 1829 and from 1837 to 1843. Biography Clark was born in Pi ...
1969–1976 * R. Alex McCullough 1969–1977 * Mitchell P. Kobelinski 1973–1976 * Margaret W. Kahliff 1976–1982 * Donald E. Stingel 1977–1981 *
Thibaut de Saint Phalle Thibaut de Saint Phalle (July 23, 1918 – June 16, 2015) was an American investment banker, lawyer, and educator who served as a director of the Export–Import Bank of the United States from 1977 to 1981. Early life and education de Saint Ph ...
1977–1981 * Richard W. Heldridge 1982–1988 * Rita M. Rodriguez 1982–1999 * James E. Yonge 1982–1984 * Richard H. Hughes 1985–1985 * Simon C. Fireman 1986–1989 * Richard Houseworth 1988–1991 *
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1991–1994 * Cecil B. Thompson 1991–1994 * Maria Luisa Haley 1994–1999 *
Julie Belaga Julie D. Belaga (July 12, 1930 – November 19, 2021) was an American Republican politician in Connecticut. Early life Belaga was born and raised in Boston, Massachusetts in July 1930. She moved to Connecticut with her family in 1965. Belaga r ...
1994–1999 * Dan Renberg 1999–2003 * Dorian Vanessa Weaver 1999–2003 *
Max Cleland Joseph Maxwell Cleland (August 24, 1942 – November 9, 2021) was an American politician from Georgia. A member of the Democratic Party, he was a disabled U.S. Army veteran of the Vietnam War, a recipient of the Silver Star and the Bronze Star ...
2003–2007 * Linda M. Conlin 2004–2006 * J. Joseph Grandmaison 2006–2009 * Bijan R. Kian 2006–2011 * Diane Farrell 2007–2011 *
Larry Walther Larry Walther (born 1945/1946) is the Treasurer of Arkansas. He was appointed to the position by Governor Sarah Huckabee Sanders on August 3, 2023, after his predecessor, Mark Lowery, died of a stroke. Career In 2003, Walther was appointed direc ...
2011–2013 * Wanda Felton 2011–2013, 2014–2016 *
Fred P. Hochberg Fred Philip Hochberg (born February 3, 1952) is an American businessman and civic leader. After nearly two decades as an executive, including five years as President at the Lillian Vernon Corporation, he then served in various leadership roles a ...
2009–Present * Sean Robert Mulvaney 2011–2015 * Patricia M. Loui 2011–2015 * Charles J. Hall 2016–2017


History


Early history (1934–1944)

EXIM was organized originally as a
District of Columbia ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...
banking corporation b
Executive Order 6581
from
Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...
on February 2, 1934, under the name Export–Import Bank of Washington. The stated goal was "to aid in financing and to facilitate exports and imports and the exchange of commodities between the United States and other Nations or the agencies or nationals thereof", with the immediate goal of making loans to the
USSR The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
and Latin America. Roosevelt created a Second Export–Import Bank of Washington with Executive Order 6638 on March 9, 1934, with the specific goal of aiding trade with Cuba. The Bank's first transaction was a $3.8 million loan to
Cuba Cuba ( , ), officially the Republic of Cuba ( es, República de Cuba, links=no ), is an island country comprising the island of Cuba, as well as Isla de la Juventud and several minor archipelagos. Cuba is located where the northern Caribbea ...
in 1935 for the purchase of U.S.
silver Silver is a chemical element with the Symbol (chemistry), symbol Ag (from the Latin ', derived from the Proto-Indo-European wikt:Reconstruction:Proto-Indo-European/h₂erǵ-, ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, whi ...
ingot An ingot is a piece of relatively pure material, usually metal, that is cast into a shape suitable for further processing. In steelmaking, it is the first step among semi-finished casting products. Ingots usually require a second procedure of sha ...
s. The First and Second Export–Import Banks were combined in 1936 when Congress transferred the obligations of the Second Export–Import Bank to the first. Congress continued the bank as a government agency, using a series of laws between 1935 and 1943 to make it subordinate to various government departments.


Independent agency (1945–present)

Congress made the bank an independent agency on July 31, 1945, with the Export–Import Bank Act of 1945. On March 13, 1968, further legislation changed the name to "Export–Import Bank of the United States". EXIM became a self-sustaining (self-funding) agency in 2007, though the loans remain backed by the government. The Government Corporation Control Act of 1945 requires the Bank to be reauthorized by Congress every four to five years. Reauthorizations were approved in 1947, 1951, 1957, 1963, 1968, 1971, 1974, 1978, 1983, 1986, 1992, 1997, 2002, 2006, 2012, 2014, 2015, and 2019: It was last chartered for a three-year term in 2012 and in September 2014 was extended through June 30, 2015. Congressional authorization for the bank lapsed as of July 1, 2015. As a result, the bank could not engage in new business, but it continued to manage its existing loan portfolio. Five months later, after the successful employment of the rarely used
discharge petition In United States parliamentary procedure, a discharge petition is a means of bringing a bill out of committee and to the floor for consideration without a report from the committee by "discharging" the committee from further consideration of a bil ...
procedure in the
House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often c ...
, Congress reauthorized the bank until September 2019 via the
Fixing America's Surface Transportation Act The Fixing America's Surface Transportation Act or the FAST Act is a funding and authorization bill to govern United States federal surface transportation spending. It was passed by Congress on December 3, 2015, and President Barack Obama signed ...
signed into law on December 4, 2015, by President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the U ...
. In December 2019, President Donald Trump signed the Export-Import Bank Extension into law as part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94) which authorized the bank until December 31st, 2026.


Projects assisted


Pan-American Highway

The
Pan-American Highway The Pan-American Highway (french: (Auto)route panaméricaine/transaméricaine; pt, Rodovia/Auto-estrada Pan-americana; es, Autopista/Carretera/Ruta Panamericana) is a network of roads stretching across the Americas and measuring about in to ...
runs from Alaska to Chile through 14 countries with important transportation links to nearly all of continental Latin America. The highway was constructed beginning in 1936 with the last phase complete in 1980. EXIM Bank credits and loans supported construction of the Pan-American Highway in Mexico, Honduras, Guatemala, Nicaragua, El Salvador, Costa Rica, Panama, Colombia, Ecuador, Peru and Chile. In Paraguay, Argentina, and Bolivia EXIM supported construction of highway spurs connected to the Pan-American Highway. EXIM approved twenty credits to U.S. companies including Caterpillar, Koehring Co., Allis-Chalmers Manufacturing, The Galion Iron Works, and Thew Shovel to help build the highway.


Burma Road

Constructed between 1937 and 1938, the 717-mile
Burma Road The Burma Road () was a road linking Burma (now known as Myanmar) with southwest China. Its terminals were Kunming, Yunnan, and Lashio, Burma. It was built while Burma was a British colony to convey supplies to China during the Second Sino ...
links Lashio in present-day Myanmar (previously Burma) to Kunming in Yunnan Province, China. Construction of the road began in 1937 at the start of the second Sino-Japanese War (1937–1945). With Japan able to control port access in China and most of Southeast Asia, the Chinese built a road that would allow transportation of men and goods from a railhead at Rangoon that had access to Burma's ports. From 1939 to 1942 the Burma Road served as a lifeline for military goods and support in the fight against the Japanese in the Far East. The $25 million credit approved by EXIM in December 1938 was crucial in ensuring that the supply route remained open by providing the transportation vehicles and support material to operate the new road and by providing China with purchasing power during WWII. An additional $20 million to the Universal Trading Corporation was approved in 1940. A 1939 journal article in Foreign Affairs noted that China used part of the $25 million to purchase 2,000 three-ton trucks from Ford, Chrysler, and General Motors.


Post-WWII reconstruction and the Marshall Plan

EXIM played a critical role during the years between the end of
Lend-Lease Lend-Lease, formally the Lend-Lease Act and introduced as An Act to Promote the Defense of the United States (), was a policy under which the United States supplied the United Kingdom, the Soviet Union and other Allied nations with food, oil, ...
(September 1945) and the beginning of the Marshall Plan and the World Bank's first authorizations (May 1947 – 1948). At the end of WWII, it was recognized that the U.S. did not have a credit facility capable of handling the demand that would result from the cessation of hostilities. One of the major rationales behind the Export–Import Bank Act of 1945, the basis of EXIM's current charter document, was the necessity to dramatically increase EXIM's lending capacity to adequately respond to Europe's post-war reconstruction needs. The 1945 EXIM Annual Report predicated EXIM's role in the immediate post-WWII period: "the Export–Import Bank was to be the principal source of long-term dollar loans for an extended period of time." This assertion was based on the lack of interest by private capital in lending to foreign government buyers and delays in ratification of the Articles of Agreement for the International Monetary Fund and the International Bank for Reconstruction and Development. The Export–Import Bank Act of 1945 increased lending authority from $750 million to $3.5 billion, almost a fourfold increase to help address these shortfalls. In 1945 and 1946 credit was offered to France, Denmark, Norway, Belgium, the Netherlands, Turkey, Czechoslovakia, Finland, Italy, Ethiopia, Greece, Poland and Austria to purchase equipment, facilities, and services from the United States. The financing was designed to aid reconstruction of the nations and to repair their import and export capability through the purchase of new machinery, currency exchange, and improvements and repairs to infrastructure and transportation systems. When the
Marshall Plan The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred over $13 billion (equivalent of about $ in ) in economic re ...
was initiated in 1948, EXIM concentrated its lending on non-Economic Recovery Act nations in North and South America.


First credits to post-Soviet nations

When the Berlin Wall fell in 1989 and the USSR was dissolved in 1991, U.S. companies were able to conduct business freely with Eastern Europe for the first time since the end of WWII. EXIM was one of the first financial institutions to provide financing for exports to the former Soviet Union, Poland, Czechoslovakia and the newly independent nations that emerged after 1991. In 1990, President George H.W. Bush waived the
Jackson–Vanik amendment The Jackson–Vanik amendment to the Trade Act of 1974 is a 1974 provision in United States federal law intended to affect U.S. trade relations with countries with non-market economies (originally, countries of the Communist bloc) that restrict fr ...
, which had officially blocked normal trade relations with communist countries since 1975. This waiver permitted all E guarantee and insurance programs to U.S. companies wanting to do business with the USSR and several former communist countries. EXIM resumed business with Czechoslovakia in March 1990. On January 25, 1991, EXIM approved the first transaction to Czechoslovakia since 1947. Financed by First Interstate Bank of Los Angeles, CA, the guarantee allowed Tonak Hat Company to purchase computers from a U.S. company,
Digital Equipment Corporation Digital Equipment Corporation (DEC ), using the trademark Digital, was a major American company in the computer industry from the 1960s to the 1990s. The company was co-founded by Ken Olsen and Harlan Anderson in 1957. Olsen was president unt ...
of Massachusetts. Since 1991, EXIM has supported exports to 25 of the nations that emerged after the fall of the Iron Curtain.


First credit to India

After a visit to India in January 2015, President Obama announced that the EXIM will finance $1 billion of exports of 'Made-in-America' products, the U.S.
Overseas Private Investment Corporation The Overseas Private Investment Corporation (OPIC) was the United States Government's Development finance institution until it merged with the Development Credit Authority (DCA) of the United States Agency for International Development (USAID ...
will lend $1 billion to small- and medium-sized rural enterprises and the U.S. Trade and Development Agency will commit $2 billion for renewable energy. Obama and Modi agreed on issues that had previously stopped U.S. companies from establishing nuclear reactors in India.


Support

Supporters say that the bank emphasizes trying to help small and medium size businesses expand their exporting capabilities. CEO and president of the
National Association of Manufacturers The National Association of Manufacturers (NAM) is an advocacy group headquartered in Washington, D.C., with additional offices across the United States. It is the nation's largest manufacturing industrial trade association, representing 14,000 s ...
, Jay Timmons stated: "The EXIM plays a critical role in manufacturer's ability to export to new markets and keep up with growing global competition. The Bank assists nearly 290,000 export related jobs and each year is helping more and more small and medium-sized manufacturers grow their businesses and hire new workers. More than 85% of all EXIM transactions directly benefit small business exporters—the economic engine that powers our economy and job creation." When Obama was campaigning for president in 2008, he stated that the Export–Import Bank had "become little more than a fund for
corporate welfare Corporate welfare is a phrase used to describe a government's bestowal of money grants, tax breaks, or other special favorable treatment for corporations. The definition of corporate welfare is sometimes restricted to direct government subsidie ...
." During the Bank's reauthorization struggle, May 2012, he said that the Export–Import Bank plays a very important role in reaching his goal of doubling exports over 5 years. At the reauthorization ceremony Obama stated: "We're helping thousands of businesses sell more of their products and services overseas, in the process, we're helping them create jobs here at home. And we're doing it at no extra cost to the taxpayer."


Criticism


Special interests-based criticism

The Bank has been criticized for favoring special interests. These interests have included corporations such as
Boeing The Boeing Company () is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product ...
or
Enron Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional companies. ...
as well as foreign governments and nationals, such as a 1996 $120 million low-interest loan to the China National Nuclear Power Corporation (CNNP) supporting the export of US-made technology. More recently the bank authorized $33.6 million in loans to Abengoa, a Spanish Green energy company on which former Governor
Bill Richardson William Blaine Richardson III (born November 15, 1947) is an American politician, author, and diplomat who served as the 30th governor of New Mexico from 2003 to 2011. He was also the U.S. Ambassador to the United Nations and Energy Secretary ...
is a member of the board of directors. As of May 2014, Richardson was also listed as a member of the advisory committee of the Export Import Bank.


Boeing

65% of loan guarantees over 2007 and 2008 went to companies purchasing
Boeing The Boeing Company () is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product ...
aircraft. In 2012, the Bank's loan guarantees became even more skewed, with 82 percent of them going to Boeing customers. However, EXIM supporters note that Boeing is the largest exporter in the United States by dollar value, and must be protected in their capacity as the only remaining comprehensive U.S. commercial aircraft manufacturer. Support of Boeing is seen as particularly critical as
Comac , type = State-owned limited company , industry = Aviation , founded = , founder = , location_city = Pudong, Shanghai , location_country = China , area_served = Worldwide , products = Commercial airliners , services = , key_people ...
, China's state-owned and heavily subsidized commercial aircraft manufacturer, aggressively seeks to leech market share from both Boeing and Airbus. Also important to note, Boeing is not the only US aircraft manufacturer previously supported by EXIM. During the 1930s, 40s, and 50s, EXIM supported other US aviation manufacturers such as the
Douglas Aircraft Company The Douglas Aircraft Company was an American aerospace manufacturer based in Southern California. It was founded in 1921 by Donald Wills Douglas Sr. and later merged with McDonnell Aircraft in 1967 to form McDonnell Douglas; it then operated as ...
, the Consolidated Vultee Aircraft Company (Convair), and the
Lockheed Aircraft Corporation The Lockheed Corporation was an American aerospace manufacturer. Lockheed was founded in 1926 and later merged with Martin Marietta to form Lockheed Martin in 1995. Its founder, Allan Lockheed, had earlier founded the similarly named but o ...
, before the firms were driven out of existence by competition or acquisition. The cost and effectiveness of the bank are controversial. While the EXIM projects will earn the U.S. government an average of $1.4 billion per year for the next 10 years, an alternative analysis from the
Congressional Budget Office The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages ...
found that the program would lose about $2 billion during the same period, partly due to discrepancies in how credit risk is accounted for. Both conservative and liberal groups have been critical of the bank, and some continue to demand its termination.


Budget-based criticism

Critics also purport the existence of "unseen" costs created by the Export–Import Bank's subsidies, including artificially raising the price of new airplanes and potentially adding $2 billion to the deficit over the next decade.
Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...
contributor
Doug Bandow Douglas Bandow (born April 15, 1957) is an American political writer working as a Senior Fellow at the Cato Institute. In 2005, Bandow was forced to resign from the Cato Institute after it was revealed that for over ten years, he accepted payment ...
wrote in 2014, "The agency piously claims not to provide subsidies since it charges fees and interest, but it exists only to offer business a better credit deal than is available in the marketplace. The Bank uses its ability to borrow at government rates to provide loans, loan guarantees, working capital guarantees, and loan insurance." If the normal principles of economics or finance are applied, then it is seen by critics as unlikely that the bank has profited and most unlikely that it makes the annual profit that it has stated, because the bank's calculations of profit fail to make proper adjustment for risk. Best practice in finance and economics, as well as in banking, is to adjust the
cost of capital In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". It is used to evaluate new ...
or discount rate to reflect risk, or, equivalently, to use a fair-value estimate. On this basis the criticism is that "This simple approach—which is based on a method outlined in a
National Bureau of Economic Research The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic c ...
paper by Debbie Lucas of the
Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the ...
—suggests that the EXIM's long-term loan guarantee program actually provides guarantees at a loss for taxpayers, not a profit. Moreover, this analysis reveals that the EXIM's loan guarantees are made at sufficiently generous terms that borrowers receive subsidies of about 1% of the amount borrowed. That translates into a $200 million cost for taxpayers on the $21 billion in loans that the bank will make in 2012."


Environment-based criticism

In February 2009, the EXIM settled a seven-year-long legal proceeding brought by
Friends of the Earth Friends of the Earth International (FoEI) is an international network of environmental organizations in 73 countries. The organization was founded in 1969 in San Francisco by David Brower, Donald Aitken and Gary Soucie after Brower's split with ...
,
Greenpeace Greenpeace is an independent global campaigning network, founded in Canada in 1971 by Irving Stowe and Dorothy Stowe, immigrant environmental activists from the United States. Greenpeace states its goal is to "ensure the ability of the Earth t ...
together with the cities of
Boulder In geology, a boulder (or rarely bowlder) is a rock fragment with size greater than in diameter. Smaller pieces are called cobbles and pebbles. While a boulder may be small enough to move or roll manually, others are extremely massive. In c ...
,
Arcata Arcata (; Wiyot: ''Goudi’ni''; Yurok: ''Oket'oh'') is a city adjacent to the Arcata Bay (northern) portion of Humboldt Bay in Humboldt County, California, United States. At the 2020 census, Arcata's population was 18,857. Arcata was first ...
and
Oakland Oakland is the largest city and the county seat of Alameda County, California, United States. A major West Coast port, Oakland is the largest city in the East Bay region of the San Francisco Bay Area, the third largest city overall in the Bay A ...
. The plaintiffs said that the EXIM and the
Overseas Private Investment Corporation The Overseas Private Investment Corporation (OPIC) was the United States Government's Development finance institution until it merged with the Development Credit Authority (DCA) of the United States Agency for International Development (USAID ...
provided financial assistance to oil and other
fossil fuel A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels m ...
projects without first evaluating the projects'
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
impacts.Douglas Starr
"The carbon accountant. Richard Heede pins much of the responsibility for climate change on just 90 companies. Others say that's a cop-out"
''
Science Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earliest archeological evidence for ...
'', volume 353, issue 6302, August 26, 2016, pages 858–861.
In 2005, the plaintiffs were granted legal standing to sue. This is considered a landmark decision because it is the first time that a federal court has specifically granted legal standing for a lawsuit exclusively challenging the federal government's failure to evaluate the impacts of its actions on the Earth's climate and U.S. citizens. In its settlement agreement, the EXIM agrees to evaluate the carbon dioxide emissions as part of its determination for qualification for a project. However, EXIM fossil fuel financing and associated
greenhouse gas emissions Greenhouse gas emissions from human activities strengthen the greenhouse effect, contributing to climate change. Most is carbon dioxide from burning fossil fuels: coal, oil, and natural gas. The largest emitters include coal in China and lar ...
grew swiftly after the settlement agreement, coinciding with Chairman Hochberg's tenure. Between 2009 and 2012, EXIM fossil fuel financing grew from $2.56 billion to nearly $10 billion. Environmental groups say that the EXIM is currently on a "fossil fuel binge", which "makes a mockery" of President Obama's stated commitment to phase out
fossil fuel subsidies Fossil fuel subsidies are energy subsidies on fossil fuels. They may be tax breaks on consumption, such as a lower sales tax on natural gas for residential heating; or subsidies on production, such as tax breaks on exploration for oil. Or ...
. In December 2009, EXIM Directors approved $3 billion in financing for the ExxonMobil-led Papua New Guinea Liquid Gas project in December 2009. The project has reportedly caused violence and in April 2012, the
Papua New Guinea Papua New Guinea (abbreviated PNG; , ; tpi, Papua Niugini; ho, Papua Niu Gini), officially the Independent State of Papua New Guinea ( tpi, Independen Stet bilong Papua Niugini; ho, Independen Stet bilong Papua Niu Gini), is a country i ...
government ordered in troops to quell opposition from villagers after a landslide linked to a quarry that had been used by the project killed an estimated 25 people. In 2010, environmental groups criticized the EXIM Directors for approving $917 million worth of financing for the 3,960 megawatt coal-fired
Sasan Ultra Mega Power Project Sasan Ultra Mega Power Plant or Sasan UMPP is one of the four Ultra Mega Power Projects awarded by the Ministry of Power, Government of India. It is located in Sasan village near Waidhan in Singrauli district of Madhya Pradesh. Sasan UMPP is I ...
in India after initially rejecting the project on climate change grounds. Environmental groups say that in reversing the decision the agency's Chairman, Fred Hochberg and Board of Directors "caved in" to political pressure from Wisconsin politicians. In 2011, several environmental groups protested at Export–Import Bank headquarters, unsuccessfully urging Chairman Hochberg and Board of Directors to reject $805 million in financing for the 4,800 megawatt Kusile coal-fired power plant in
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
, which environmental groups say is the largest carbon emitting project in the agency's history, which will not alleviate poverty but will emit excessive local air pollution, which health experts say causes damage the respiratory, cardiovascular, and nervous systems and deaths resulting from heart disease, cancer, stroke, and chronic lower respiratory diseases. In December 2012, the
Center for Biological Diversity The Center for Biological Diversity is a nonprofit membership organization known for its work protecting endangered species through legal action, scientific petitions, creative media and grassroots activism. It was founded in 1989 by Kieran Suckl ...
,
Pacific Environment Pacific Environment is an environmental organization based in San Francisco, California, United States, founded in 1987. Its objective is to protect the living environment of the Pacific Rim. History The organization was founded 1987 as Paci ...
, and Turtle Island Restoration Network filed a lawsuit against Chairman Hochberg and the EXIM for the agency's financing of Australia Pacific LNG's liquid natural gas projects inside the
Great Barrier Reef The Great Barrier Reef is the world's largest coral reef system composed of over 2,900 individual reefs and 900 islands stretching for over over an area of approximately . The reef is located in the Coral Sea, off the coast of Queensland, ...
World Heritage Area. The lawsuit alleged that EXIM financing for the projects violates U.S. environmental and cultural heritage laws. Their amended lawsuit included EXIM's loan for the Australia Pacific LNG project and a $1.8 billion loan for the Queensland Curtis which together totaled $4.8 billion. In March 2016, a California federal judge ruled against the environmentalists arguing that the EXIM financing represented only 10% of the project which is backed by ConocoPhillips,
Origin Energy Origin Energy an ASX listed public company with headquarters in Sydney. It is a major integrated electricity generator, and electricity and natural gas retailer. It operates Australia’s largest coal-fired power station at Lake Macquarie, Ne ...
Ltd. and
Sinopec China Petroleum & Chemical Corporation (中国石油化工股份有限公司) or Sinopec (), is a Chinese oil and gas enterprise based in Beijing. It is listed in Hong Kong and also trades in Shanghai. Sinopec Limited's parent, Sinopec ...
and rejecting the loan would not stop the project. The environmentalists appealed the decision. In 2019
Friends of the Earth (US) Friends of the Earth U.S. is a non-governmental environmental organization headquartered in Washington, D.C., founded in 1969 by environmentalist David Brower. Friends of the Earth U.S. campaigns on issues including climate change, pollution, ...
criticized EXIM President Kimberly A Reed for supporting the liquid natural gas (LNG) industry despite the lifecycle climate impacts of the fossil fuel, citing the U.S. government's
Fourth National Climate Assessment Fourth National Climate Assessment (NCA4) 2017/2018 is a 1,500 page two-part congressionally mandated report by the U.S. Global Change Research Program (USGCRP)—the first of its kind by the Trump administration, who released the report on Novembe ...
finding that more frequent and extreme weather events are severely damaging the environment and the economy, while increasing harm to human health and loss of life.
Friends of the Earth (US) Friends of the Earth U.S. is a non-governmental environmental organization headquartered in Washington, D.C., founded in 1969 by environmentalist David Brower. Friends of the Earth U.S. campaigns on issues including climate change, pollution, ...
also criticized EXIM for approving $5 billion in financing the Mozambique LNG project, citing the project's damage to the surrounding ecosystem (including to endangered species), displacement of local communities, and lack of economic benefits for local people.


Criticism of green energy-based financings

Conversely the EXIM has also faced scrutiny for pursuing
green energy Energy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs". Most definitions of sustainable energy include considerations of environmental aspects such as greenh ...
projects. The EXIM provided $10 million of loan guarantees in 2011 to
Solyndra Solyndra was a manufacturer of cylindrical panels of copper indium gallium selenide (CIGS) thin film solar cells based in Fremont, California. Heavily promoted as a leader in the sustainable energy sector for its unusual technology, Solyndra ...
, a company that ultimately became bankrupt.


See also

* CoBank *
List of federal agencies in the United States Legislative definitions of a federal Government agency, agency are varied, and even contradictory. The official ''United States Government Manual'' offers no definition. While the Administrative Procedure Act (United States), Administrative Proce ...
* Independent agencies of the United States government *
Title 12 of the Code of Federal Regulations CFR Title 12 – Banks and Banking is one of 50 titles composing the United States Code of Federal Regulations (CFR) and contains the principal set of rules and regulations issued by federal agencies regarding banks and banking. It is available ...
* List of export credit agencies


References


Further reading


Assessing Reform at the Export–Import Bank: Hearing before the Subcommittee on Monetary Policy and Trade of the Committee on Financial Services, U.S. House of Representatives, One Hundred Thirteenth Congress, First Session, June 13, 2013
*
Robert Higgs Robert Higgs (born 1 February 1944) is an American economic historian and economist combining material from Public Choice, the New institutional economics, and the Austrian school of economics; and describes himself as a " libertarian anarchis ...
''Against Leviathan: Government Power and a Free Society''. Oakland, Calif.: The Independent Institute, 2004
The Use of Environmental and Social Criteria in Export Credit Agencies' Practices
, by Markus Knigge et al. Published in 2003 by th
Deutsche Gesellschaft fuer Technische Zusammenarbeit – GTZ


External links

*
Export–Import Bank
in the
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every weekday, except on feder ...
{{DEFAULTSORT:Export-Import Bank of the United States Banks based in Washington, D.C. Banks established in 1934
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
Government agencies established in 1934 Government-owned companies of the United States Independent agencies of the United States government American companies established in 1934