Fred Hochberg, chairman of the Export-Import Bank of the United States, visited Boulder and Denver on Monday to argue why Congress needs to renew the credit agency’s charter before it expires June 30.
“I’m still confident we will get this done, but we don’t have a lot of time,” Hochberg told a roundtable of more than two dozen local business executives and trade advocates gathered in Denver on Monday afternoon.
The bank provides loans, loan guarantees or insurance to ensure U.S. exporters will get paid by their customers. The bank said 90 percent of its customers nationally are small businesses, and that its financing supported more than 164,000 U.S. jobs last fiscal year.
In Colorado, the bank said it has authorized financing to support approximately $586 million of exports from more than 80 exporters since 2010. About 70 percent of its customers in the state are small businesses.
Opponents like Freedom Partners, a Virginia-based free-market advocate, argue that much of the bank’s support, about 75 percent when measured in dollars, actually goes to deep-pocketed and politically connected corporations like Boeing and General Electric. They also contest the 90 percent small business customer figure .
Freedom Partners, on the , noted that the bank in 2011 made a $9 million loan to support the purchase of thin-film solar panels from Abound Solar in Longmont, despite the firm’s then weak financial condition that culminated in a .
“Abound Solar is a perfect example of why the Export-Import Bank should be allowed to expire. The bank doled out more than $9 million to benefit a politically connected company that was already on the verge of bankruptcy,” said James Davis, a spokesman for the group.
Although Abound Solar did fail, Hochberg said the customer in India that bought its solar panels is still current. The bank’s overall default rate is only 0.16 percent, and the bank generated a $675 million surplus returned to taxpayers last year.
“We specialize in tough products in tough countries, and in small businesses” Hochberg said.
About 68 percent of the bank’s nearly $20.5 billion in authorizations last fiscal year went to emerging markets, where trade financing can be difficult to obtain. And more often than not, it is the bankers and insurers who bring the Export-Import Bank into a deal they can’t finance, he said.
Hochberg notes that 60 other export credit agencies are backing foreign competitors and that U.S. firms would be at a disadvantage if the agency expired.
House Financial Services chairman Jeb Hensarling, R-Texas, has been among the bank’s toughest critics, arguing it is a form of crony capitalism that needs to end.
That has put him at and others who argue the bank plays an important role in supporting trade and jobs in the country.
Hochberg said Republican and Democratic versions of reauthorization bills now in the House have about 250 co-sponsors between them and that a middle ground can be found.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
