Ex-Im Bank gets seven-year extension

The year-end spending package President Donald Trump signed into law late Dec. 20 includes a seven-year reauthorization for the U.S. Export-Import Bank, a lending agency that has been largely sidelined as a source of cheap financing for U.S. satellite deals since Congress let Ex-Im's charter lapse in 2015.

The $1.37 trillion omnibus bill, which funds the U.S. government through Sept. 30, 2020, provides Ex-Im its longest authorization period ever, though still shorter than what some lawmakers had sought.

The enacted legislation also enables the bank to keep lending in the absence of a full board of directors by allowing other government officials to temporarily fill vacancies in order to maintain a quorum.

New rules for Ex-Im Bank state that if the bank lacks a quorum for 120 consecutive days during a president's term, a temporary board will form consisting of the treasury and commerce secretaries, the

U.S. trade representative and the bank's confirmed board members. That temporary board would remain until at least three board members are confirmed or until the U.S. president's term expires.

A separate, earlier bill from Rep. Maxine Waters (D-Calif.) that would have extended the bank's charter for 10 years - through 2029 - passed the House Nov. 15 but was blocked by Senate Majority Leader Mitch McConnell (R-Ky.), according to Politico. The White House also opposed Waters' bill, saying it favored a long-term bank authorization, but that Waters' bill "would create excessive costs and burdensome reporting structures."

Ex-Im Bank President and Chairman Kimberly Reed praised the seven-year authorization in a release issued late Dec. 20. "I thank President Trump for making history today by signing into law the longest reauthorization of EXIM in the agency's 85-year history," she said.

She noted that the legislation tasks the bank with focusing on the "important economic and national security challenges posed by China." Proponents of Ex-Im Bank have in recent years sought to use the export-credit agency as a soft power tool to counter Chinese export credit and, by extension, Chinese influence globally.

China has had limited success selling satellites and launches on the global market because of U.S. export restrictions that largely forbid selling American spacecraft components for use on Chinese satellites or satellites that would launch on Chinese rockets.

In recent years, however, U.S. startups have worried that a surge in Chinese small launch vehicles could put pricing pressure on their business. China Great Wall Industry Corp. has also described small satellites, which are easier for companies to build without American parts, as a target market.

Export credit had, from around 2009 to 2015, grown from a niche financing opportunity to a mainstay for the satellite industry. After Ex-Im Bank's charter lapsed in 2015, Boeing and Orbital ATK (now Northrop Grumman) said they lost satellite manufacturing contracts because of their inability to offer export financing.