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    EDITOR’s NOTE: This month, we offer competing views on the Export-Import Bank, which is up for reauthorization by Congress. Here is a brief view we’ve put together of just what the bank is and why there is controversy over the reauthorization. Read this, then turn the page for our special Point/Counterpoint.

    The Export-Import Bank is an independent agency that provides loans, guarantees and insurance-related financing to foreign businesses that want to buy products from U.S. exporters.
    As the official export credit agency of the United States, the “Ex-Im,” as it is known, has the ability to make loans to businesses that a normal bank would deem too risky. In the last five years, loans made by the agency have supported 1.2 million American jobs and the agency generated $2 billion for U.S. taxpayers in loan fees.
    But can America’s own banks do a better, more effective job of lending the money and keep the American taxpayer from being exposed to the loan guarantees of the Ex-Im Bank?
    That seems to be topic du jour in Congress, which is again being asked to reauthorize the bank, whose charter expires at the end of September.
    In the 80-year history of the Export-Import Bank, its charter has been reauthorized 16 times, mostly with broad bipartisan support. In 2012, however, weeks of debate led up to the reauthorization.
    This year continues the politicking.
    “Regardless of what the real truth is about job creation, we know that there is a political element to the debate that is choosing to use Ex-Im Bank as an exhibit to a broader ideological fight in America. I’m not sure this is fair to the many small- to medium-size companies that I see on a regular basis,” Al Li, a St. Louis-based banker, told the Illinois Business Journal. Li has helped multinational companies throughout the Midwest with global trade finance topics like export working capital, foreign currency and documentary collections. He recently spoke on the challenges of foreign trade during a gathering at Southern Illinois University Edwardsville.
    The current opposition to reauthorization gathered steam in July when Kevin McCarthy, R-Calif., was chosen by his colleagues as House Majority Leader to replace Eric Cantor, the Virginia Republican who lost his primary election days before.
    McCarthy is among lawmakers and conservatives who say the bank is a form of corporate welfare that primarily benefits select companies, including Boeing, General Electric and Caterpillar.
    Supporters say, however, that some 90 percent of the bank’s transactions last year were said to be for small-business exports.
    There is a growing sense of urgency for a resolution to the debate. Congress has only 15 days of session, coming after its scheduled recess, before the charter expires. The Obama administration is seeking a five-year reauthorization and a gradual increase in the bank’s lending cap, from $140 billion to $160 billion.
    Some lawmakers questioned whether the Ex-Im Bank should be — in effect — picking winners and losers with its loans and guarantees. One key argument for supporters is that the bank serves at no cost to taxpayers, but some analysts say that is more of an accounting illusion. The non-partisan Congressional Budget Office has cautioned policymakers that the government’s official accounting rules effectively force budget analysts to understate the cost of such loan programs by excluding, or not factoring in, the costs for market risk.
    Criticism has been led by Jeb Hensarling, a Republican Congressman from Texas and the head of the House Financial Services Committee. He summed up his feelings in a terse letter to the heads of two entities that gain much from Ex-Im — The Boeing Co. and the National Association of Manufacturers.
    “Although you may not recognize Ex-Im’s activities as subsidies, the Congressional Budget Office does. I would direct your attention to CBO’s May 2014 report on the matter. Regardless, it is undeniable that Ex-Im places credit risks on the taxpayers’ balance sheet that could instead be placed instead on your companies’ balance sheets. With a national debt that stands at an unsustainable $17 trillion and growing, the taxpayers’ balance sheet really doesn’t need any more credit risk,” Hensarling wrote in mid-July.
    The Ex-Im Bank’s most successful program is its long-term loan guarantee program, which generated an estimated $21 billion in estimated new guarantee volume in 2012, and apparent profits of $354 million. That was sufficient enough to offset the costs of the Ex-Im’s other small programs combined, according to a study by the Manhattan Institute for Policy Research, a nonprofit, nonpartisan organization dedicated to economic research.
    U.S. Sen. Dick Durbin, D-Illinois, is among those backing reauthorization of the Ex-Im. He recently met with the bank’s Chairman and President Fred Hochberg.
    “In just the last five years, this agency has not only helped 250 Illinois businesses — including over 150 small businesses — break into overseas markets and create local jobs, but it has also made money for the American taxpayer,” Durbin said in a statement.
    Ex-Im Bank says it does not compete with private-sector banking. It fills financing gaps when the private sector is unable or unwilling to do so. At the same time, it says private-sector lenders are Ex-Im Bank’s partners. Some 98 percent of Ex-Im Bank’s transactions involved commercial banks during FY 2013.
    In hopes of deflecting some of the criticism Export-Import Bank officials released a factsheet about the agency and some of the changes aimed at improving efficiency.
    Ex-Im Bank says it recently completed a new internal realignment and is now organized by industry sector, which it says will allow it to respond to trends in the marketplace.
    The bank says it has set “an ambitious goal” to complete 80 percent of its new transactions within 30 days. In FY 2013, Ex-Im Bank surpassed that goal, processing 89 percent of new transactions within 30 days and 98 percent within 100 days.
    The bank also established an Enterprise Risk Committee in which senior managers participate to formulate systematic risk management. Ex-Im also created and filled the new position of chief risk officer.
    All major exporting countries, including America’s biggest, global competitors, have their own export credit agencies, which support their respective countries’ exports. Some of them face far fewer rules than does Ex-Im, such as China, which financed more than $100 billion of Chinese exports in 2013, compared to Ex-Im Bank’s support of $37.4 billion worth of U.S. exports last year, Ex-Im’s statement says.
    When Congress reauthorized Ex-Im Bank in 2012, it required a number of reforms, and Ex-Im Bank says it has implemented all of them.