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Updated March 8, 2022
Export-Import Bank of the United States (Ex-Im Bank)
Ex-Im Bank, the official U.S. export credit agency (ECA),
Statutory and Policy Requirements. Bank financing may
provides financing and insurance to facilitate U.S. goods
be extended only where there is a “reasonable assurance of
and services exports to support U.S. jobs, per a renewable,
repayment” and should supplement, not compete with,
general statutory charter (Export-Import Bank Act of 1945,
private capital. It also must be “fully competitive” with the
as amended; 12 U.S.C. §§635 et seq.). It aims to support
rates, terms, and other conditions offered by foreign ECAs
U.S. exports when the private sector is unwilling or unable
(see “International ECA Landscape”). It must consider a
to do so, and/or when those exports compete against ECA-
proposed transaction’s potential economic impact to U.S.
backed foreign exports. It is demand-driven, fee-based, and
industry and its environmental impact, among other factors.
backed by the U.S. government’s full faith and credit.
The Bank, which views the U.S. content in an export
Background
contract to be a proxy for U.S. jobs, reduces its level of
support based on foreign content in an export contract. It
Authorization. Congress extended the Bank’s general
also has a more flexible, CTEP-specific content policy. The
statutory authority for seven years, through December 31,
Bank has U.S. flag shipping requirements, as well as
2026 (P.L. 116-94, Div. I, Title IV, enacted December 20,
reporting, notification, and other obligations.
2019). Absent reauthorization, the Bank generally would be
unable to approve new transactions, but it would be able to
In specific U.S. export focuses, the Bank must: make
continue managing its existing financial obligations, and
available not less than 30% of its total financing authority
perform certain other functions for “an orderly liquidation.”
each year to support small business exports; make available
not less than 5% of its total financing authority each year to
Leadership. A five-member Board of Directors, drawing
support renewable energy, energy efficiency, and energy
from both political parties, leads the Bank. Members are
storage technology exports; and aim to reserve up to 20%
presidentially appointed and Senate-confirmed. The Bank’s
of its total financing authority for support that is made
president and first vice president serve, respectively, as the
pursuant to CTEP. The Bank also must support
Board’s chair and vice chair. The Board needs a quorum of
environmentally beneficial exports and exports to sub-
at least three members to conduct business, such as to
Saharan Africa (no percentage requirement).
approve transactions above a certain threshold (now $25
million), make policies, and delegate authority. The 2019
Activity. For FY2021, the Bank reported authorizing $5.8
reauthorization provided alternative procedures in the event
billion for more than 2,000 transactions (see Figure 1), to
of a quorum lapse. An Advisory Committee and a Sub-
support some $9.2 billion of U.S. export sales. It also
Saharan Africa Advisory Committee support the Board.
reported activity in statutory export focuses, e.g., small
businesses comprised 28.2% of authorizations by dollar
On February 9, 2022, the Senate confirmed Reta Jo Lewis,
amount and 86.9% by number; and CTEP comprised 2.5%
nominated by President Biden, to be Bank president, for a
of authorizations by dollar amount. A lapse of the Board
term expiring in January 2025 (56-40 vote). Currently, the
quorum (from July 2015 until its restoration in May 2019)
Board operates with the Bank president serving as the chair,
constrained the Bank’s financing capacity previously.
an acting vice chair, and a member (confirmed in 2019, for
Figure 1. Ex-Im Bank Authorizations, FY2010-2021
a term expiring in January 2023). Nominations for the first
vice president and a member are pending in the Senate.
Programs. Key Ex-Im Bank programs include:
direct loans to foreign buyers of U.S. exports (interest
rates are based on spreads set in international rules
above U.S. Treasury rates);
loan guarantees to lenders against default on loans to
foreign buyers of U.S. exports (lender usually sets rate);
insurance to protect U.S. exporters or financial
institutions against export-related risks; and
working capital guarantees of short-term loans to U.S.
exporters.
Some deals may use underwriting techniques such as
project, structured, and supply chain finance. A new China
Source: CRS, based on data from Ex-Im Bank annual reports.
and Transformational Exports Program (CTEP) aims to
In 2021, the Board extended temporary relief measures to
counter export subsidies provided by China and/or other
respond to the Coronavirus Disease 2019 (COVID-19)
designated countries, by providing Bank financing or other
pandemic to add liquidity and flexibility to current Bank
support in statutory “transformational” export areas, e.g.,
products, e.g., expanded program eligibility and guarantee
wireless communication equipment, including 5G.
level for working capital guarantees. The Bank’s Advisory
Committee now has China competition- and climate-
focused subcommittees. The Bank also has a new
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Export-Import Bank of the United States (Ex-Im Bank)
strategically oriented office to source deals, especially for
new export credit rules halted in 2020, due to differences on
certain statutory export focuses.
core issues, e.g., transparency of financing terms.
Funding. Ex-Im Bank’s revenues include interest, risk
In 2020, official medium- and long-term export credits
premia, and other fees charged for its support. Revenues
declined globally by one-third from 2019, amid the
acquired in excess of forecasted losses are recorded as
pandemic and other factors. China’s ECA financing
offsetting collections. The Bank reports contributing to the
reflected this decline ($18 billion in 2020 versus $33.5
Treasury, since 1992, a net of $9.0 billion after covering all
billion in 2019), but remained dominant (see Figure 2).
expenses, loan-loss reserves, and administrative costs. (This
Figure 2.Export Financing by Selected ECAs in 2020
is on a cash basis, and different from the amount calculated
on a budgetary basis.) Offsetting collections did not fully
cover program and administrative costs in FY2018-2021.
For FY2021 (P.L. 116-94), the Bank had a limit of $110.0
million for administrative expenses, and $6.5 million in
funding for its Office of Inspector General (OIG). For
FY2022, the President’s budget request provides a limit of
$114.0 million for administrative expenses; $10.0 million
for the program budget (last received in FY2013), for
certain transactions where expenses are expected to exceed
receipts, mainly to offset Chinese practices and support
clean energy exports; and $6.5 million for the OIG. Full-
year FY2022 appropriations have yet to be enacted.
Risk Management. The Bank monitors credit and other
transaction risks, has reserves against losses, and reports its
default rate quarterly. If its default rate reaches 2%, it faces
an immediate lending cap freeze. In FY2021, the Bank had
loss reserves of $3.1 billion (7.4% of total exposure), up
from $2.9 billion (6.2% of total exposure) in FY2020. Its
default rate was 1.377% in FY2021, up from 0.819% in
Source: CRS, based on Ex-Im Bank, 2020 Competitiveness Report.
FY2020, a rise the Bank attributes to COVID-19-related
Note: Data are for new medium- and long-term official export credit
financing, and subject to analytic assumptions and other limitations.
economic effects. The FY2022 budget request includes a
*Brazil abides by the Arrangement’s Aircraft Sector Understanding.
temporary increase of the default rate cap from 2% to 4%
Policy Debate and Issues for Congress
for the Bank to continue activities while managing defaults.
Ex-Im Bank is subject to ongoing policy debate. Supporters
International ECA Landscape. The Bank abides by the
argue that the Bank fills gaps in private-sector financing for
Organisation for Economic Co-operation and Development
exports and helps U.S. firms compete against foreign ECA-
(OECD) Arrangement on Officially Supported Export
backed firms, while managing risks and advancing other
Credits, first established in 1978 to ensure a level playing
U.S. policy goals. Critics argue that the Bank crowds out
field for exporter competition. Applying to ECA financing
the private sector, picks winners and losers, is corporate
with repayment terms of two years or more, it sets limits on
welfare, and imposes taxpayer risks.
financing terms and conditions, and has provisions on
transparency, tied aid (concessional financing linked to
In the 117th Congress, the Senate may consider additional
procurement from the donor country), and other issues.
Board nominations. Congress also may consider an array of
Under World Trade Organization (WTO) rules,
oversight and legislative issues, including concerning:
Arrangement-compliant export credit practices are not
the Bank’s competitiveness in supporting U.S. exports,
deemed prohibited export subsidies.
balanced with its risk management practices;
the Bank’s support for statutory export focuses;
Differences among ECAs’ programs and policies may be
the Bank’s responses to China-related competitiveness
areas of competitiveness when ECAs have greater
challenges and to COVID-19-related financial risks; and
implementation flexibility. For example, many ECAs have
options to address “unfair” competition from foreign
eased or removed domestic content requirements, partly
ECAs under existing rules and potential new tools.
because of more globalized input sourcing. Many U.S.
Congress also may examine potential changes to the Bank’s
exporters, while lauding the Bank’s programs and policies
programs and policies, and implications for its mission. One
in other respects, view its foreign content approach as the
issue in this regard is a proposed new Bank program, under
strictest among ECAs and a limit on its competitiveness.
Board consideration, to offer financing to support the
Policy changes may raise competing stakeholder interests.
establishment and/or expansion of U.S. manufacturing
Unregulated ECA financing has grown as non-OECD
facilities and domestic infrastructure projects with an
countries operate ECAs and OECD members provide
“export nexus,” among other possible parameters.
financing outside of the OECD rules. China’s ECA activity
Supporters may welcome the move to bolster U.S. supply
especially raises competitiveness concerns due to its
chains and U.S. exporters’ competitiveness, while critics
purported size, financing tactics, lack of transparency,
may raise economic and policy concerns about expanding
operation outside of the OECD Arrangement, and possible
the Bank’s financing scope.
violation of WTO export subsidy rules. Efforts launched in
2012 among the United States, China, and others to develop
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Export-Import Bank of the United States (Ex-Im Bank)
IF10017
Shayerah I. Akhtar, Specialist in International Trade and
Finance
Disclaimer
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https://crsreports.congress.gov | IF10017 · VERSION 32 · UPDATED