The Export-Import Bank reported last week that it returned $675 million to the Treasury Department. The news comes weeks after Congress decided to temporarily reauthorize the Bank’s charter until the end of June 2015, a move met with rare opposition for the Bank as some on Congress sought to close it.
The Bank operates on profits made from loans, fees, and other assistance and consistently returns money to the federal government. In fact, the bank operates at no cost to taxpayers.
The United States is one of 60 countries that support exports through an export-credit agency and ranks sixth in terms of total support among those nations, according to the National Association of Manufacturers and the Economist Intelligence Unit.
Business leaders have voiced their concerns that uncertainty about closing the Ex-Im Bank “creates a real disadvantage for American companies.” One business leader said that Ex-Im financing allowed his small company in rural Texas to start exporting; business abroad now accounts for 50 percent of sales.
While the majority of exporters use private financing, the Ex-Im Bank’s job is to help the businesses that do not. “We’re Plan B,” the Ex-Im chair Fred Hochberg said in an interview with Marketplace, “We fill a gap when (the) private sector is unable, unwilling, or market conditions are just too risky for them.”
The Bank supports many businesses through its direct loan, working capital, loan guarantees, and export insurance programs. Many of the Bank’s deals use private sector banks as a partner, not as a competitor.