The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States Government.

Ex-Im Bank, which recently celebrated its 75th anniversary, is an independent federal agency chartered by the U.S. Congress with its mission to sustain and increase U.S. jobs.

Ex-Im Bank provides loans, loan guarantees and insurance to help U.S. companies export their goods and services.  Ex-Im Bank products facilitate commerce at all levels.  Ex-Im Bank helps American business reach the 95 percent of the global marketplace that is beyond our borders. All regional offices of Ex-Im Bank, including New York, Miami, Houston, Chicago, Los Angeles, and San Francisco are committed to small business outreach. 

Ex-Im Bank does not compete with private sector lenders but provides export financing that fill trade financing gaps. The Bank assumes credit and country risks that the private sector is unable or unwilling to accept. Ex-Im Bank further levels the playing field for U.S. exporters by matching the financing that other governments provide to their exporters. 

It is important to note—Ex-Im Bank is self-sustaining—meaning the Bank pays for its operations from the interest and fees it collects.

As part of its mission, Ex-Im Bank is committed to providing opportunities for all American businesses – especially Service Disabled, Veteran-Owned Small Business firms. 

Ex-Im Bank staff continues to support meetings in connection with the Interagency Network of Enterprise Assistance Providers. We continue our collaboration with the Center for Veterans Enterprise, benefiting from their partnerships with the Small Business Administration, American Small Business Development Associations, Department of Defense, Department of Veterans Affairs, and the Department of Labor.

Export loan authorizations by Ex-Im Bank more than doubled to $13.2 billion during the first half of the current fiscal year. That is a 125 percent increase compared to the record $5.9 billion authorized during the same period in Fiscal Year 2009. 

An estimated 109,000 American jobs have been supported by the Bank’s financing this fiscal year to date, compared to about 61,000 jobs supported during the same period last fiscal year.

Small business export loan authorizations have increased half a billion dollars during the same period to $2.3 billion, 28 percent greater than the first half of FY2009. 

The 2010 first-half figures are the latest in a series of records set by Ex-Im Bank while addressing tightened liquidity in the marketplace. In FY2009, total Ex-Im Bank authorizations came to $21 billion while authorizations for small business exporters totaled $4.36 billion—both historic highs.

To assist small businesses, the Bank implemented new products and services such as a premium rate reduction of 15 percent on our short-term multi-buyer insurance policies and short-term small business environmental multi-buyer insurance polices.  The premium rate reduction affects approximately half of all Ex-Im Bank insurance policy holders.

As of March 31, 2010, the self-sustaining Bank’s FY2010 receipts in excess of costs totaled $162.6 million. We are proud that we are able to function at no expected cost to the U.S. taxpayer. 

My colleagues at Ex-Im Bank and I look forward to working with the groups testifying today to increase our support within the veteran small business community. 

Chairwoman Herseth Sandlin, Ranking Member Boozman, Members of the Subcommittee, I welcome the opportunity to testify before you on the efforts the Export-Import Bank of the United States (Ex-Im Bank) is undertaking to help not only our veterans, but also U.S. small businesses, succeed in an increasingly difficult and complex international marketplace.

Our veterans deserve all the gratitude and assistance that the Federal Government can provide for them. I commend all our veterans for their service and sacrifice to this country.

Chairman Hochberg wishes he could be here today, and he, along with all my colleagues at the Bank are committed to working with this Committee and the other groups and agencies represented here to expand our outreach to small businesses owned by our veterans.

While the credit crunch appears to be easing, Ex-Im Bank remains committed to filling the gaps in trade financing and supporting and sustaining U.S. jobs, just as it has done for every economic crisis faced by this country since the Great Depression.

A few introductory words about the Bank may be helpful. Ex-Im Bank is the official export credit agency of the United States, and an independent federal agency chartered by the U.S. Congress.

Ex-Im Bank provides loans, loan guarantees and insurance to help U.S. companies export their goods and services.  We have a variety of products to facilitate commerce at all levels.  Ex-Im Bank helps American business reach the 95 percent of the global marketplace that is beyond our borders. 

It does not compete with private sector lenders but provides export financing that fill trade financing gaps. The Bank assumes credit and country risks that the private sector is unable or unwilling to accept. It also levels the playing field for U.S. exporters by matching the financing that other governments provide to their exporters.  Importantly, the Bank is self-sustaining, meaning the Bank pays for its operations from the interest and fees it collects. As of March 31, 2010, the self-sustaining Bank's FY2010 receipts in excess of costs totaled $162.6 million.

For more than 75 years, the Bank’s mission to grow and sustain American jobs has remained unchanged. 

Just last month at Ex-Im Bank’s Annual Conference, President Obama charged this government under his National Export Initiative with the goal of doubling U.S. exports and creating two million American jobs within the next five years. The Bank’s support of small businesses and veteran-owned businesses will lead the economic recovery and achieve the President’s target.

Ex-Im Bank is committed to providing opportunities for all American businesses – especially Service Disabled, Veteran-Owned Small Business firms. 

While I am proud to be here today to let our friends in the veterans community know that Ex-Im Bank can help, this is not the first outreach the Bank has done to this important community. Ex-Im Bank staff recently attended National Veteran Small Business Conference and Expo in July of last year. The U.S. Department of State (Office of Small and Disadvantaged Business) requested our participation along with the Danish Embassy and Australian Embassy on an International Business Development Panel at the conference. Seventy veteran-owned businesses attended the session where the Bank detailed our products that are available to them. I am happy to report that there were approximately 2,600 conference attendees.

Ex-Im Bank staff continues to support meetings in connection with the Interagency Network of Enterprise Assistance Providers (INEAP).

We continue our collaboration with the Center for Veterans Enterprise (CVE), benefiting from their partnerships with the Small Business Administration, American Small Business Development Associations, Department of Defense, Department of Veterans Affairs, and the Department of Labor. Ex-Im Bank staff maintains contact through the INEAP/Manufacturing Extension Partnership.  Ex-Im Bank promotional materials are shared with the Veterans Business Outreach. The last meeting was in March of this year.

I would like to take a moment to highlight a veteran’s success story at Ex-Im Bank. In 1956, George and Gertrude Gascon, ten years in the military, sought to purchase property in Southwest Harbor, Maine on which to settle after retirement from the U.S. Navy. Gertrude's parents, John and Dorothy Dunbar, mentioned that Ogden's lobster pound was for sale.  Flash forward 54 years to January 2010, when the Gascons’ son-in-law, Anthony Pettegrow, now co-owner of the business with the Gascons’ daughter Josette, called Ex-Im’s Northeast Regional Office. The domestic market, Mr. Pettegrow, explained, had become overly competitive due to an unexpected consequence of overfishing in the North Atlantic.  There had been a virtual elimination of the Maine lobster’s natural marine predators and lobster populations had swelled, with lobsters surviving long enough to grow to larger weights.  The resulting over supply has significantly impacted domestic prices.  Trenton Bridge Lobster Pound recognized that American lobsters commanded a premium overseas, and began selling abroad at healthier margins than had been possible at home.  As Mr. Pettegrow also explained, there are costly barriers to entry to exporting lobsters, and Trenton Bridge Lobster Pound is already set up properly to expand its more lucrative export sales.  Two existing customers in the UK and Italy now account for most of the company's sales.  Inquiries have recently been received from new buyers in Spain, Korea, and elsewhere, which the Pettegrows would like to pursue, but with prudent coverage.  As the company qualifies as a small business per SBA definition, Mr. Pettegrow was directed by the Regional Office toward the risk protection and marketing benefits of Ex-Im Bank’s Small Business Short-Term Multi-Buyer Export Credit Insurance Policy.  Trenton Bridge placed a policy application shortly after this conversation through a broker and by early February had received and accepted a quotation from Ex-Im Bank. Approximately 20 of the independent lobstermen supplying the company are also veterans, who now benefit from Trenton Bridge Lobster Pound’s newly opened markets.

I would like to provide a brief review of recent financing figures that will give you an idea of the challenges and opportunities that abound.

Export loan authorizations by Ex-Im Bank more than doubled to $13.2 billion during the first half of the current fiscal year. That is a 125 percent increase compared to the record $5.9 billion authorized during the same period in Fiscal Year 2009. 

An estimated 109,000 American jobs have been supported by the Bank’s financing this fiscal year to date, compared to about 61,000 jobs supported during the same period last fiscal year.

Small business export loan authorizations have increased half a billion dollars during the same period to $2.3 billion, 28 percent greater than the first half of FY2009. 

The 2010 first-half figures are the latest in a series of records set by Ex-Im Bank while addressing tightened liquidity in the marketplace. In FY2009, total Ex-Im Bank authorizations came to $21 billion while authorizations for small business exporters totaled $4.36 billion—both historic highs.

Export financing for buyers of U.S. goods and services sold in Asia increased from $456 million last year to $1.9 billion so far this fiscal year; all other regions in the world posted increases this fiscal year except Africa where exports are roughly even. 

We pay for our operations from the interest and fees collected.  This means we are able to finance our program budget, the amount we must set aside to cover risks, as well as our administrative budget, through the fees and payments received through our programs. 

As of March 31, 2010, the self-sustaining Bank’s FY2010 receipts in excess of costs totaled $162.6 million. We are proud that we are able to function at no expected cost to the U.S. taxpayer. 

Ex-Im Bank is uniquely able to fill the current financing gap in a number of ways. 

First, is our institutional flexibility.  Institutions such as Ex-Im Bank are prepared to respond to abrupt economic changes. For instance, prior to FY2009, most of the Bank’s larger transactions, and some smaller- and medium-sized, were financed through loan guarantees, where Ex-Im Bank would guarantee up to 85 percent of a commercial bank loan to a foreign buyer.  But Ex-Im Bank also had the option of lending directly to a foreign buyer.  In FY2009, commercial banks lacked the liquidity to offer loans.  So, where appropriate, increasingly Ex-Im Bank has stepped in and provided direct loans.

In our working capital program, Ex-Im Bank modified its credit standards to help small businesses so their exports could be stimulated and U.S. jobs sustained and created.  These actions have led to a banner year for the working capital product, eclipsing the former record for authorizations by over $70 million.  We, of course, carefully monitor this portfolio to minimize default risks.  

Also to assist small businesses, the Bank implemented new products and services such as a premium rate reduction of 15 percent on our short-term multi-buyer insurance policies and short-term small business environmental multi-buyer insurance polices.  The premium rate reduction affects approximately half of all Ex-Im Bank insurance policy holders.

During this economic downturn, Ex-Im Bank has introduced a “take-out” option, which allows commercial banks to sell their Ex-Im Bank guaranteed medium and long-term loans back to Ex-Im Bank.  This enables commercial banks to reduce their liquidity risks, lower borrowing rates, increase their own ability to lend, and make U.S. exports more competitive.

Looking to the future, we are seeking ways to do even more.  Inter-agency coordination and cooperation can be strengthened through the Trade Promotion Coordinating Committee, or TPCC, which is made up of 20 U.S. government agencies involved in trade, under the direction of the Department of Commerce. The Secretary of Commerce, who serves as the committee’s chairman, has made a vital TPCC a strategic priority.  I look forward to working with Secretary Locke, Ex-Im Bank Chairman Hochberg, and the TPCC to ensure that every effort is made to reach out directly to small businesses, including our veteran-owned businesses that either currently export or could potentially export. 

Ex-Im Bank, in close cooperation with other government agencies, is doing this through a hugely successful and widely-attended “ExportsLive” series. These trade promotion events provided exporters, small businesses new to exporting, and banks in New York, Boston, Miami, Houston, Detroit, Chicago, Los Angeles, Cincinnati, Minneapolis, Madison, WI, and Seattle areas with direct access to agency representatives from Ex-Im Bank, SBA, Commerce, USTR, OPIC, and TDA, along with one-on-one counseling for exporters. I look forward to more success from our “ExportsLive” trade events where we plan to visit Montana, Colorado, and Long Island, New York. I am sure that Ex-Im Bank would welcome the chance to work with you and your committee colleagues in hosting such events back in your districts.

Moreover, all of the regional offices of Ex-Im Bank, including New York, Miami, Houston, Chicago, Los Angeles, and San Francisco, are fully devoted to small business outreach. 

We host or attend over 400 conventions, seminars, or trade shows annually, have thousands of one-on-one meetings with businesses, and work aggressively to ensure banks and economic development agencies are aware of Ex-Im Bank and our products and services.

We estimate that there are 259,000 actual small business exporters in the United States.  With a business development staff of less than forty, Ex-Im Bank is working incredibly hard to reach these companies.

Similar outreach efforts are necessary to get commercial banks involved, or in many cases, re-involved as the banks are closer to American business, and can advise business on the resources Ex-Im Bank and other federal agencies can offer to increase their sales and increase employment.

Because of our limited resources, we need to use more third party “multipliers” in our outreach efforts.  For instance, we are refocusing our efforts to partner with senators, members of Congress, governors, mayors, state legislators, and others to host in-state trade seminars with local businesses. That is one of the reasons I am so proud to be here today, and I thank you for this opportunity to inform our veterans about the services provided by Ex-Im Bank.

We stand ready to work with you to help finance exports from veteran- owned businesses in your states and across the country.  And while there is still much more to be done, we know how to do it and what the goal is - to increase U.S. exports - thereby increasing U.S. jobs and opportunities for all Americans, but especially those who have served this country with honor and distinction. 

I look forward to partnering with the other veterans groups testifying here today in getting our message out on how to increase exports by our veteran exporting community.

Thank you again for this opportunity and I am happy to answer your questions.