U.S. Senator Bob Corker, R-Tenn., today voted against the Export-Import Bank reauthorization bill (H.R.2072) because it needlessly puts taxpayers at risk for a potential bailout. After defeating Corker's amendment (amdt.#2102) requiring a 10 percent minimum capital standard and certification of foreign exports, the Senate passed H.R.2072 by a vote of 78 to 20.
"The failure to impose even minimum capital standards for an entity with explicit backing from taxpayers demonstrates that Congress has learned very little from the financial crisis of 2008. Without reasonable limits on what the Export-Import bank can lend, taxpayers would needlessly be put at risk for a future bailout. Congress is eager to limit the private sector's ability to lend, but when it comes to loans guaranteed by the government, the attitude is "do as I say, not as I do.' Today we missed an opportunity to both maintain competitiveness for American exporters while protecting the interest of taxpayers," Corker said.
The Ex-Im Bank's existing charter requires $1 billion in capital but as lending limits have increased, the capital requirement has not. If the reauthorization becomes law as written, with no limitations on leverage, the bank could be leveraged as highly as 140-to-1, a significant risk to taxpayers since there is an explicit link to the Treasury Department.
Specifically, Corker's amendment would have:
(1) Limited leverage to 10-to-1 at the bank as an additional buffer against taxpayer losses.
(2) Required the bank to certify that private financing is not available or is prohibitively expensive prior to making a loan, and or a loan by a foreign country's export agency is also available to a U.S. competitor. This is consistent with the Ex/Im Bank's stated mission and would have added additional transparency to the bank's operations.