Sweeping changes proposed for Ex-Im Bank

June 21, 2019 – Tuesday night, the House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) released a summary of their agreement for a seven-year reauthorization of the Ex-Im Bank (to be renamed the United States Export Finance Agency), with multiple additional provisions.

ExIm Bank

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The Committee is looking at a potential legislative mark-up to review and potentially approve the reauthorization as early as Wednesday, June 26.
In addition to the name change, the bill includes the following key provisions:
• Seven-year reauthorization
• Increasing the target for small business usage from 25 to 30 percent
• An increase in the USEFA’s total authorization limit from $135 billion to $175 billion (scaled up from $145 billion in FY2020 and then by $5billion each year)
• A quorum fix if the Bank lacks a quorum for 90 days to allow the USEFA to continue to review and move forward on large transactions (now above $25 million)
• Enhanced disclosures for exporters or lenders that use more than 20 percent of the USEFA’s exposure during a fiscal year (including providing information on diversity, employment, small business outreach, etc. and an economic impact)
• Creating offices of minority and inclusion, U.S. territories, Financing for renewable energy
• Prohibitions financing for certain aviation-related vehicles that have not been certified as airworthy by the Federal Government
• Establish a program to compete with China and other non-OECD export credit agencies and to promote exports of transformational technologies and renewable energy exports
• Prohibit sales of more than $25 million to Chinese state-owned entities unless the U.S. Trade Representative certifies that the entities do not provide support for Chinese military or intelligence, China’s Belt and Road Initiative or human rights abuses, or knowingly engage in the theft of U.S. intellectual property or has violated U.S. corruption laws. The provision exempts small businesses and humanitarian exports (including rescue equipment and medical devices). There is also a presidential waiver if the export is found to be in the national interest and the Board may terminate the requirement after five years.
• Increases in spending to update USEFA’s information technology systems and to provide administratively-determined pay for up to 35 USEFA employees
• Reports to Congress
• An Inspector-General audit of regional export finance centers
• Additional authorities for the Risk Management Committee
• Direction to Treasury to negotiate the end of export credit subsidies
• Provisions to deny USEFA usage by entities involved in fraud
• New requirements for written documentation and verification of the need for USEFA financing (so-called additionality)
• Makes the reinsurance pilot program permanent.

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