When Congress left for the July Fourth recess last week, it did so without reauthorizing the Export-Import Bank, a once-esoteric, self-funded loan guarantor established by President Franklin Roosevelt to boost American exports after the Great Depression.
The bank, which provides loans and guarantees to overseas customers of U.S. businesses, stopped issuing new credit as of Tuesday. It supports some 1,700 small American businesses, as well as certain big businesses, including, somewhat infamously, General Electric and Boeing. That has led critics to allege the bank is a chief purveyor of crony capitalism, a charge that has led to Congress’ inaction on the issue.
The Ex-Im Bank, as it is known, helped 19 Kentucky companies secure contracts and sales abroad last year. Since 2007, it has supported nearly $350 million in shipments and credit from companies in the Bluegrass, leading to a total export value of $576 million in goods, according to bank data. This comes at a time when Kentucky exports are surging, up 11 percent for the first quarter of 2015.
In Louisville, Ex-Im provided credit or guarantees to six companies last year. They cut a wide range in size, from Brown-Forman and ISCO Industries to First Class Air Support, a provider of aftermarket aircraft parts with a senior staff of 10. In total, the bank provided more than $14.6 million in insured shipments, guaranteed credit or loans to Louisville companies last year.
The bank also provided millions to Southern Indiana firms, including two companies — Beach Mold & Tool and Technidyne Corporation — in New Albany.
Like most chambers of commerce, including the U.S. Chamber, which has been a strong advocate, Greater Louisville Inc. supports reauthorization of the bank’s charter and has lobbied Congress to that effect.
“More than 20 of Greater Louisville’s employers benefit from the Export-Import Bank, and our region reaps billions in economic benefit as a result,” said GLI President and CEO Kent Oyler. “We are disappointed to see Congress recess before reauthorizing the Ex-Im Bank, and we urge lawmakers to consider this upon return from the July Fourth recess.”
Perhaps because the issue has drawn political controversy, however, not a single Louisville business that received Ex-Im backing last year would comment for this story. IL also reached out to the Kentucky & Southern Indiana District Export Council, but the federal agency declined to comment on the bank, citing a potential conflict of interest. One Southern Indiana, the region’s chamber of commerce, did not respond to a request for comment.
Still, local companies have clearly benefited from the bank — to the tune of nearly $44 million in exports with a direct connection to Ex-Im credit, loans or guarantees in 2014. The biggest recipient in Louisville last year was Jordan Technologies. The maker of vapor recovery units received $10.8 million from the bank in 2014 in support of $40 million worth of exports. The Louisville company was acquired by Flare Technologies in 2012 and is now a subsidiary of a company called Aereon, which is based in Austin, Texas.
BFW Inc., the River Road company that makes portable LED medical headlamps, received nearly $1.7 million in credit or guarantees from the bank in 2014. Shamrock Marketing received $884,158. And Brown-Forman got $624,519.
Supporters of the bank argue it helps American companies stay competitive against companies that have the backing of foreign governments, such as China. The U.S. Chamber says Ex-Im is responsible for 200,000 American jobs.
Congress could still reauthorize the bank’s charter when members return to Washington next week. And that’s exactly what business groups are hoping for.