Export Import Bank of America. Photo: Via Satellite

[Via Satellite 07-01-2016] More than 30 transactions by the Export Import Bank of America, commonly referred to as Ex-Im Bank, remain stalled out — a year since Congress voted to reauthorize the institution. Included in these 30 transactions, each valued in excess of $10 million, are new satellite orders caught in limbo.

After the first authorization lapse since its founding 81 years ago, Congress restored Ex-Im Bank with the signing of the “Fixing America’s Surface Transportation (FAST) Act,” on Dec. 4, 2015, but with the caveat that transactions worth more than $10 million require approval from a quorum on its board of directors. In the seven months since the bank’s resurrection, the U.S. Senate, which is tasked with confirming enough members to reconstitute a quorum, has not done so.

The raison d’être for Ex-Im Bank’s inability to support $10 million+ deals is opposition by Senator Richard Shelby, R-Ala., who is chairman of the Senate Banking Committee. A proponent of shuttering Ex-Im Bank last year, Sen. Shelby has delayed the confirmation of enough board members to reach a quorum, arguing that the institution amounts to “corporate welfare,” according to an April 19, 2016 article on the Senator’s website.

On June 30th, the anniversary of Ex-Im Bank’s charter expiration, 42 Democratic Senators submitted a signed letter to Sen. Shelby urging him to provide a vote on the nomination of J. Mark McWatters to the bank’s board of directors. McWatters formerly served as a staffer for Jeb Hensarling, the Republican chairman of the House Financial Services Committee — a move many initially hoped would serve as an olive branch between Democrats and Republicans, but was not the case.

In the letter, the senators wrote: “Ex-Im has more than 30 board-level transactions pending in the pipeline, valued at more than $20 billion, supporting tens of thousands of high paying manufacturing jobs. These potential exports are in a variety of industries, including solar, satellites, oil and gas, and transportation among others.”

The letter goes on to highlight recent global volatility as threatening U.S. businesses and manufacturers, and says quorum is necessary for companies to “reach the 95 percent of customers who are located outside the United States.”

Ex-Im Bank has grown to become of increasing importance to the satellite industry due to its international and multimillion dollar nature. In the wake of its charter expiration, U.S. manufacturer Boeing lost the ability to close two deals — one with Bermuda-based ABS for the ABS 8 satellite, and another with Singapore-based Kacific’s for the operator’s first spacecraft, Kacific 1. Another satellite, Intelsat 38/Azerspace 2 for Luxembourg-based Intelsat and Azerbaijan’s Azercosmos, shifted from Orbital ATK to Space Systems Loral (SSL), the U.S. arm of Canada-based MacDonald Dettwiler and Associates (MDA). U.S. satellite manufacturers have bemoaned Ex-Im Bank’s absence as causing business to atrophy, saying that many contracts now include Export Credit Agency (ECA) support perforce. European satellite manufacturer Thales Alenia Space told Via Satellite in a December 2015 interview that the company suspected many new satellite deals were waiting for Ex-Im Bank to be fully revived rather than heading overseas options.

Trade industry organizations such as the Satellite Industry Association (SIA) and the Aerospace Industries Association (AIA) have been vocal in urging congress to bring Ex-Im Bank back to full operations. On June 30th, Jay Timmons, president and CEO of the National Association of Manufacturers, and Tom Donohue, president and CEO of the U.S. Chamber of Commerce issued a joint statement saying:

“The Senate needs to vote on the nominee for the Ex-Im board of directors to get this important institution up and running again. Overwhelming majorities in both chambers of Congress voted to reauthorize the bank last year, and there should be no further delay in making it fully operational.”

Also coinciding with the one-year post charter expiration, Ex-Im Bank released its 2015 Competitiveness Report — a study conducted regularly since 1972 gauging the bank against other ECAs — that described 2015 as “an especially challenging year.” The report covers all of 2015, including the six months preceding and during the lapse in authority, and noted a 50 percent drop in authorizations, along with an increase in export credit availability by other nations.

Ex-Im Bank had a surplus of more than $430 million over the past year — an amount that decreased significantly compared to 2014 when the agency sent $675 million to the U.S. Treasury Department. Compared to other U.S. institutions, Ex-Im Bank is one of the few that generates positive revenue for the U.S. government.