June 02, 2015

Shelby Opening Statement on Perspectives on the Export-Import Bank of the United States

WASHINGTON, DC – Tuesday, June 2, 2015 – U.S. Senator Richard Shelby (R-Ala.), Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, today delivered opening remarks during a full committee hearing on “Perspectives on the Export-Import Bank of the United States.”
The text of Chairman Shelby’s remarks, as prepared, is below.  
“This is the first of our oversight hearings on the Export-Import Bank of the United States, which is currently authorized through June 30th of this year.

“During the May 2012 reauthorization process, we built in several reforms for the Bank related to risk management and accountability.   
“I have long been concerned with the Bank’s financial risk to the American taxpayers, who ultimately stand behind the Bank.  I made it clear in 2012 that Congress should not merely give Ex-Im another blank check. 
“That is why I called for a comprehensive Government Accountability Office study on Ex-Im’s risk management practices.  I also sought to put in place measures that would reduce operational risk and hold accountable the Bank’s management from the top-down. 
“Three years later, I remain disappointed with the Bank’s lack of progress towards these goals. 
“During the past few years, the GAO has identified significant weaknesses in areas such as the Bank’s analysis of default risks, portfolio stress-testing, the underwriting process, and forecasting of exposure.  Such weaknesses have been shown to be part of an overall pattern of failure.  
“In addition, the Inspector General has recently reported that about 40 percent of its recommendations to Ex-Im remain open or unresolved. 
“After years of efforts to reform the Bank, I am not convinced that it has made enough progress to warrant a long-term reauthorization. 
“Taxpayers should not be compelled to once again stand behind the Bank if the problems are impossible to fix.
“Congress cannot leave unaddressed Ex-Im’s failures to properly manage its risk.  It is especially important to get this right, considering Ex-Im’s disproportionate exposure in certain industries, geographic areas, and large, single foreign customers.
“In addition, I continue to be concerned about the eventual effects of the rapid 40% increase in the Bank’s lending cap, which was enacted in 2012 over my objections.
“In determining whether reauthorization is justified, Congress must take another hard look at Ex-Im.  It must assess the true costs of the Bank on American labor, industries, and taxpayers; not only the benefits to a select few companies. 
“There are strong voices in favor of letting the Bank sunset and equally strong opinions in favor of trying one more time to address serious concerns with the Bank. 
“Those who say Ex-Im should be allowed to expire argue that the Bank can never be reformed, and that the subsidies do little, if anything, to advance the nation’s economic prospects. 
“Those who say the Bank should live to see another day argue that it is a necessary evil of export financing that seeks to level the playing field among aggressive foreign export policies.
“As the Committee begins to examine these issues, we welcome a distinguished panel of witnesses today.  Each brings a valuable perspective and has been asked to present evidence to support his or her assessment of the Bank.
“On Thursday of this week we will hear from Fred Hochberg, the Chairman and President of the Export-Import Bank of the United States.  The Committee will then consider next steps as the Bank’s current authorization nears expiration.”