The U.S. Export-Import Bank faced an imminent shutdown of its new lending and insurance activities as lawmakers left Washington on Thursday for an 11-day break without renewing the trade lender’s charter.
Ex-Im’s authority to make new loans or write new credit and trade guarantees will expire at midnight on June 30, leaving many U.S. exporters scrambling to find alternative financing or withdraw from proposed deals.
The bank’s chairman, Fred Hochberg, said that the charter would expire after 81 years largely free of controversy.
“It’s hard to believe Ex-Im is going to lapse. But we are,” Hochberg said in a speech to a trade forum on Thursday.
Conservative Republicans and influential conservative think-tanks have waged a long campaign to shut down the trade lender, arguing that it constitutes “welfare” to giant, politically connected corporations.
“This is a small step toward renewing a competitive free-market economy and arresting the rise of the progressive welfare state and the cronyism connected to it,” Representative Jeb Hensarling, a Republican of Texas who is the leader of the crusade, said in a statement.
Hensarling, who chairs the House Financial Services Committee, has declined to move a bill to renew Ex-Im’s charter, leaving no immediate legislative vehicle.
Ex-Im will not close its doors on July 1. Its 450 employees will keep coming to work because its $106.3 million administrative budget, paid from fees it collects, is authorized through Sept. 30, the end of the fiscal year.
Ex-Im spokeswoman Nicole Woods said employees would perform monitoring and compliance work on the bank’s $112 billion in outstanding loans and guarantee commitments, and process trade insurance claims. But they will not be able to review new applications or solicit potential new business.
Meanwhile, the bank’s proponents still hope to pass renewal legislation with some reforms in July. The main hope for many Democrats and moderate Republicans is to attach this to a transportation funding bill with a July 31 deadline for passage.
“We’ve been expecting that it’s going to get attached to something over in the Senate and come over to the House,” House Speaker John Boehner, who has traditionally backed Ex-Im in the past, told reporters. “When it does, we’ll deal with it. Until then, we won’t.”
A coalition of business groups and companies lobbying to keep Ex-Im open said Congress had “failed” by not acting, adding, “Each additional day of inaction increases the damage to American competitiveness and is a boon to foreign competitors.”
(Reporting by David Lawder; Editing by Kevin Drawbaugh and Leslie Adler)
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