US Congress allows Ex-Im Bank charter to expire
01 July 2015
Ex-Im Bank had to stop doing new business today, after members of the US Congress failed to reauthorize the 81-year-old federal government agency before its charter expired at midnight.
Established by President Franklin D Roosevelt in 1934, Ex-Im Bank is the USA's official export credit agency. Its mission is to assist in financing the export of US goods and services to international markets.
The bank said that, although it will be unable to make new loans, it will stay in business for the time being to service more than $100 billion in outstanding loans and guarantees. The bank is funded until 30 September.
US nuclear power companies have argued they will lose business to rivals from other countries, including Russia and China, if Congress decided against reauthorization of the bank.
A year ago, Westinghouse president and CEO Danny Roderick warned: "This is not a partisan issue. This is an American competitiveness issue […] From the energy industry perspective, Ex-Im is an absolute necessity in order to compete globally against state-funded and state-subsidized companies."
Dan Lipman, vice president of supplier and international programs at the Nuclear Energy Institute, said recently: "In the civilian nuclear business, foreign customers won't make a deal with you if you don’t have Ex-Im-type financing lined up. The leading nuclear energy supplier nations such as Russia, South Korea, Japan and France provide their suppliers with multiple forms of support, including strong trade finance." He added, "Every US company that exports nuclear goods would suddenly find itself at an extreme disadvantage in global markets, resulting in lost sales and lost jobs."
In a 26 June statement, the bank said: "Ex-Im Bank has received numerous questions about what will happen if its authorization is not extended. Naturally, we understand that this uncertainty is causing serious concern among businesses and their workers across the country as thousands of entrepreneurs try to make long-term plans to grow, hire, and invest in innovation."
A lapse in authority beginning on 1 July will mean the bank and any of its delegated authority lenders cannot authorize any new transactions.
It added: "All pre-existing loans, guarantees, and insurance policies will continue in full force and effect. We will process and close all previously approved transactions, which will also continue in full force and effect according to their terms. The bank will continue to manage all transactions in its portfolio until maturity, including issuing waivers and amendments (other than those which increase the bank's exposure)."
The bank's critics say they are opposed to what they describe as corporate welfare.
Researched and written
by World Nuclear News