Ex-Im Bank gets to hide bad loans to compete with China
H.R. 1615 — Strengthening Exports Against China Act · Filed by Young Kim (R-CA) · 2 cosponsors · Introduced Feb 26, 2025 · Referred to committee
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What it does
This bill amends the Export-Import Bank Act to exclude certain U.S. export financings from the calculation of the bank's default rate when determining whether it has hit its lending cap. Specifically, it excludes defaults on loans that help U.S. companies replace or compete with products from Chinese entities on the Commerce Department's Entity List or Treasury's sanctions list, or loans made under the bank's China-focused export program. The effect is to allow the bank to lend more money overall by not counting these particular defaults against its statutory cap.
Why we flagged it
The bill is a narrow amendment to the Export-Import Bank's lending cap calculation designed to increase financing capacity for exporters competing with sanctioned Chinese entities. It is not a broad policy reform but a targeted adjustment to a specific metric that gates the bank's lending authority.
What the text implies
- By excluding defaults on China-competition loans from the default-rate calculation, the bill obscures the true performance of the bank's lending portfolio, potentially allowing deteriorating loan quality to go undetected by Congress and the public.
- The exclusion may incentivize the bank to classify marginal loans as 'China-competition' financing to keep them out of the default calculation, creating a perverse incentive to game the metric.
The full analysis lists 4 implications of this text.
Who stands to gain
U.S. exporters competing with Chinese firms; Export-dependent manufacturers and technology companies; Export-Import Bank (via expanded lending authority)