As the federal Export-Import Bank prepares to sunset because of Congressional inaction, local companies that rely on the bank are not enjoying the view.
“It would be a real shame if the Export-Import Bank program is not continued,” Russell La Belle, president of Wilmington Machinery, said Monday. His company has used the services of the bank to help sell its blow molding and plastic injection molding machinery abroad.
Both chambers of Congress have adjourned for their Independence Day recess, allowing the bank to expire officially, since the deadline for reauthorization is Tuesday, Lawton King, a public affairs specialist for the bank, said Monday. He expressed optimism, however, that Congress would take up the matter when members return.
“There is quite a bit of bipartisan support for the bank in Senate and in the House,” he said.
An interruption in authorization means that the bank cannot act on any new loans, King said. He explained, however, that the bank is funded through Sept. 30, the end of the current federal fiscal year, and will continue to provide services for existing loans, guarantees and credit insurance policies.
Created in 1934, the Export-Import Bank – Ex-Im for short – facilitates the export of U.S. goods, filling a financing void where private sector financing is not an option, according to the agency’s website. Until this year, the bank has enjoyed bipartisan support in Congress and has been continuously reauthorized with little debate.
Ahead of the June 30, 2015 deadline for reauthorization, however, Conservative groups such as Americans for Prosperity have come out against Ex-Im Bank. In a recent news release, the organization said it has “aggressively opposed reauthorization of the Ex-Im bank,” citing the bank’s supposed lack of transparency, culture of corruption, cost to taxpayers and lack of public support.
Some conservatives in Congress have also taken a stand against renewing the bank's charter, saying that Ex-Im is an example of corporate welfare.
La Belle, however, said Ex-Im provides needed services, pointing to the bank’s guarantees of term financing – generally up to 10 years – to what the bank’s website calls “creditworthy international buyers” in both the private and public sector, allowing them to get competitive term financing from lenders, according to the bank’s website.
“There are countries in South America and places like that where their interest rates are tremendously high, so if someone is procuring capital equipment – which is what we build – if a U.S. bank funds it, that can significantly reduce the cost,” La Belle said, explaining that a U.S. bank is much more likely to extend credit to a foreign purchaser if the loan is guaranteed by Ex-Im or if Ex-Im partners with the lender.
GE, including its divisions in New Hanover County, has been vocal about supporting reauthorization. Two weeks ago the combined employees of GE Hitachi and GE Aviation staged a rally
aimed at convincing legislators to reauthorize the bank.
Reached Monday for comment about the failure of Congress to act on the bank’s future ahead of the deadline, GE Hitachi spokesman Christopher White said, "While we are very disappointed that Ex-Im hasn’t been reauthorized yet, we are hopeful that Congress, and particularly our North Carolina delegation, will do the right thing for area workers and eventually reauthorize this critical tool American companies use to compete globally."
Sen. Richard Burr (R-N.C.) has a history of supporting the Ex-Im Bank, as did former Sen. Kay Hagan (D-N.C.). Hagan's successor, Sen. Thom Tillis (R-N.C.), however, has a more nuanced view.
"Senator Tillis would like to see reforms made to the Ex-Im Bank that will provide a better playing field for small businesses in international markets," Tillis spokeswoman Meghan Burris said Monday in an email.