WASHINGTON D.C.— Manufacturers of farm machinery and other goods are hoping recent action by the U.S Senate restores the Export-Import Bank of the United States (EXIM), which was allowed by Congress to expire.

Any revival of the bank, however, won’t happen for at least another month, leaving some manufacturers on edge about the potential of losing business from other countries, particularly in the emerging markets of developing nations.

The Senate on July 27 voted 64-29 to reform and reauthorize EXIM after the longstanding federal government-backed credit agency was allowed to expire June 30. The measure to restore the bank now goes before the House for consideration, but it won’t be back in session until September.

Alexander Russ, director of International and Regulatory Affairs for the Assoc. of Equipment Manufacturers based in Milwaukee, said EXIM is relied upon heavily especially by small and mid-sized manufacturers in the United States to finance orders for products especially from developing nations without banking systems to secure credit.

Large manufacturers to some degree also rely on the bank to grow their overseas customer bases, he said.

The bank makes exporting goods possible for manufacturers who lack the capital to cover the expenses of shipping their products, until their money comes in from purchasers unable to secure their own credit from the lack of a banking system in their respective countries. Without the bank, turning to private lending institutions is not a viable option, Russ said.

EXIM issues loans and guarantees loans from the private sector, and without the government backing those loans private credit agencies are often reluctant to finance shipments to developing countries for fear of those loans falling into default. Interest rates from private banks are also higher than what’s assessed on loans backed by EXIM, said Russ.

“The private market is not going to come in and fill this gap,” he said.

Makers of farm machinery and other related equipment are among the variety of manufacturers that use the bank extensively, and if it is not renewed he said jobs will be lost, not only from losing customers tied to the availability of credit. Too, the more than 60 other countries with banks of their own to finance exports will gain a competitive advantage over the U.S. in the world market.

“If the United States loses ours, U.S. manufacturers will be at a significant economic disadvantage while trying to access these growing markets,” said Russ.

Helping in the fight to restore the bank is Indiana Sen. Joe Donnelly, a Democrat from Granger and member of the Senate Banking Committee.

“The Export-Import Bank has helped to create jobs in Indiana and across the country in a fiscally responsible way, and that is why I hope the House will follow the Senate’s bipartisan action and vote to reauthorize the bank,” he said.

The bank was up for renewal when Congress chose not to act prior to the June 30 deadline. Opponents say the bank is backed by government tax dollars and those monies should not be used to help private industry. Russ said the bank generates revenue for the U.S. Treasury and has a much lower default rate than in the private market.

Paul Bertels, vice president of production and sustainability for the National Corn Growers Assoc. out of Chesterfield, Mo.. said EXIM ceasing to exist won’t have much of an impact on grain producers. He said farmers needing to finance shipments of grain to other countries go through the Foreign Agricultural Service, a division of the USDA.

Nevertheless, he favors the bank coming back. “We view it as a favorable thing that can help agriculture,” said Bertels.

Under the Senate measure advanced by Donnelly, the bank’s charter would be renewed until Sept. 30, 2019. Among the reforms would be lowering the risk to taxpayers by requiring higher loan loss reserves.

Transparency and oversight of bank practices would be provided by creating a chief risk officer and risk management committee to oversee the bank’s operations; requiring the Inspector General to regularly audit the bank’s risk management procedures; and creating a non-political chief ethics officer to oversee ethics practices of bank employees, said Donnelly.

“At a time when American companies often are competing in a game rigged by foreign currency manipulation, intellectual property theft and insurmountable regulatory barriers, unilaterally eliminating our export credit agency just further handcuffs U.S. job creators and allows competitors in foreign countries to pick up business,” he said.