Senate Banking Committee Oversight Hearing on the Export-Import Bank
Senate Committee on Banking, Housing, and Urban Affairs
“Oversight of the Export-Import Bank of the United States”
Tuesday, June 23, 2020
Witnesses
- Kimberly Reed, President and Chairman of the Board of Directors, Export-Import Bank of the United States
Opening Statements
Chairman Mike Crapo (R-Idaho)
In his opening statement, Crapo explained that Reed made a commitment to move forward any outstanding congressionally initiated reforms and to create more transparency as it relates to Export-Import Bank (EXIM Bank) activities. Crapo said that Reed has done a good job of increasing transparency so far. Crapo summarized that Congress enacted a seven-year reauthorization of the EXIM Bank, which included specific requirements regarding China and ways to increase small business participation, in addition to providing assurance for exporters.
Ranking Member Sherrod Brown (D-Ohio)
In his opening statement, Brown said that the EXIM is an essential tool for creating manufacturing jobs and that as the nation continues to grapple with COVID-19, EXIM will increasingly be called upon to help save the manufacturing industry. Brown stated that EXIM needs a full Board of Directors in order to help manage the pandemic and China, and that there is no reason why the outstanding nominations are not being confirmed.
Testimony
Kimberly Reed, President and Chairman of the Board of Directors, Export-Import Bank of the United States
In her testimony, Reed said that last year she pledged that she would work to reform EXIM by increasing transparency, strengthening taxpayer protections, improving protections for domestic companies, ensuring EXIM does not crowd out private financing options, cracking down on bad actors, and working to reduce the reliance on export credit agencies globally. Reed explained that she has made a lot of progress on those commitments so far. She also said that it was a major success when Congress signed the seven-year reauthorization of EXIM. Reed continued that China is changing the nature of competition because they are very aggressive and are not subject to the same international rules and agreements as other countries. Reed also explained that EXIM has a new congressional mandate to counter China’s exploitative model, in addition to a congressional mandate to boost small business engagement to 30 percent.
Question & Answer
Reforms
Sens. Pat Toomey (R-Pa.), Kyrsten Sinema (D-Ariz.), Bob Menendez (D-N.J.), Brown and Crapo asked Reed to elaborate on EXIM’s efforts in terms of implementing its December 20, 2019 reauthorization requirements with various members asking specifically on countering China. In response, Reed highlighted the new Congressional mandate to establish a program to compete with China and counter China’s model of economic development and finance as well as EXIM’s efforts to boost small business outreach and engagement, all the more important in the context of COVID-19. In addition to these two key initiatives Reed continued that substantial progress has also been made in increasing transparency, cracking down on bad actors, both domestic and abroad, and reducing EXIMs reliance on ECAs. Reed detailed the new “Program on China and Transformational Exports” and stated that it is vital to help level the playing field so our nation’s businesses and workers can succeed against Chinese competition around the world. Reed also took the opportunity to note that they have very little on their portfolio in terms of China-related business and that they are required to notify the State Department and Congress when they receive any applications involving Chinese state-owned enterprises worth $25 million or above.
Toomey also asked a question about the additionality guidelines to which Reed responded that they are continuing to work through these guidelines and in accordance with the new Congressional mandate, the EXIM bank is reviewing each application with sufficient amounts of scrutiny.
Sinema discussed EXIM’s pilot reinsurance program to which Reed responded that in her view, this was a very successful pilot and she is looking to significantly expand it in the near term.
Outreach Efforts
Sens. Jon Tester (D-Mont.), Mike Rounds (R-S.D.), Jack Reed (D-R.I.) and Catherine Cortez Masto (D-Nev.) and Sinema all emphasized the importance of EXIM outreach efforts to businesses of all kinds, specifically small businesses as well as minority- and veteran-owned companies. Reed reinforced that the EXIM bank is constantly working on boosting their work with these types of entities, elaborating on their increased outreach throughout the COVID-19 pandemic. She also highlighted the recently signed Memorandum of Understanding with the National Credit Union Administration to launch a three-year education initiative to promote EXIM financing products among federally insured credit unions and their members.
Outstanding Nominations
Sens. Crapo, Brown, Reed, Menendez and Sinema all called on the Senate to act on the nominations of Paul Shmotolokha and Claudia Slacik to serve on EXIM’s board, emphasizing the importance of having a fully staffed organization in these uncertain times.
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