The U.S. Export Import Bank ("EXIM"), which is an independent agency, ft: please see our article titled "U.S Fails to Renew EXIM's Charter. Is it a Challenge for Turkish Aviation Sector?", providing trade financing solutions, including export credit insurance, working capital guarantees, and guarantees of commercial loans to foreign buyers for the purpose of empowering the U.S. exporters to sell their goods and services[1], was unable to conduct its activities due to a suspension in its authorization since July 1, 2015.

EXIM's Lapse in the Time Course

There have been quite a number of discussions in the U.S. Congress about whether it was right or wrong not to renew the EXIM Charter. Eventually on June 28, 2015 the U.S. Congress did not renew the EXIM Charter, and thus the EXIM's authorization expired on June 30, 2015 due to conservatives' efforts to block its reauthorization. Therefore, since June 30, EXIM has been able to continue to service the existing transactions but was not able to provide any new assistance.

The supporters of the EXIM claimed that it kept the U.S. firms able to compete and play in the same field against foreign competitors, which enjoyed similar supports from their own governments. On the other hand, the opponents agreed that it put taxpayers at risk and did not assist small businesses to compete in the global market nor create jobs in the U.S. The Republicans were the opposing party for its reauthorization and argued that EXIM was an engine of cronyism and corporate welfare. However, its supporters never gave up and finally the Democrats and moderate Republicans made an effort to bring the bank back to life through a method called a "discharge petition", and they were successful in the House of Representatives ("House").


Upon submission of the petition, the House began to debate on the Highway Trust Fund on November 3, 2015 and voted on 21 amendments to the Highway Bill ("Bill"). Lawmakers voted on 81 more amendments on November 4 and ten (10) of them were about the EXIM.

The amendments proposed by the House Republicans, where the Republicans hold the majority, enabled the reauthorization of the EXIM; though with a limited capacity and many reforms. Addressing EXIM; provided EXIM to;

  • be prohibited from extending financing to foreign companies that received subsidies from a foreign government, if that government had a "sovereign wealth fund", (an investment fund owned by a foreign government) exceeding 100 billion USD value;
  • be restricted from offering loans to foreign countries/companies that did not "meet competition" from another country's export credit agency;
  • reduce its overall lending cap from 140 billion USD to 135 billion USD and increase the percentage of aid provided to small businesses from 20% to 25% of its authorized budget;
  • be able to fund a company or person seeking more than 10 million USD in financing from EXIM to have applied at least two private sector financing authorities and been turned down;
  • cover the losses that it has incurred on its own;
  • be prohibited from providing direct loans, loan guarantees and credit to state sponsors of terrorism;
  • rearrange its accounting principles;
  • provide more financing to the small businesses and increase it by five percent each year.

Senate Taking the Stage and the Last Shot from President Obama

Including the provisions on EXIM into the Bill was not enough for the revival of the EXIM, since it also required obtaining the Senate's approval. On December 3, 2015, the Senate approved the Bill on an 83-16 vote and the EXIM Charter was renewed to last for five more years till September 30, 2019, with its new limits, which are less than the previous ones, and new reforms such as increasing the percentage of financing it extends to small businesses.

Finally on December 4, 2015, President Obama, signed EXIM's reauthorization into law. As of December 4, EXIM is able to operate in order to meet its mission of supporting American jobs and businesses. Members of the Board of Directors of EXIM will need to be confirmed by the Senate and until then the transactions which require the approval of the EXIM's board will be pending.

Despite the fact that the EXIM Charter has been renewed, two major beneficiary parties of EXIM, the Boeing Co. and GE, made announcement that they might move their manufacturing out of the United States, due to the lack of agency support and decreased lending facilities of EXIM[2].

Over 81 years from its foundation, EXIM has never faced such a risk not to be renewed. This was one of its first crucial survival stories and although many limitations and amendments have been imposed on EXIM's transactions, it survived. Many assumed that, the importance of EXIM was not sufficiently understood until summer 2015, but when it was in the period of lapse, the importance of it for the trade capability of the U.S. has become much more apparent even for the small businesses of the U.S. Accepting such challenge as an experience, we will all see how EXIM will work to help businesses in the near future.

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