Posted by Staff on July 25, 2014
Committee Reviews the Dodd-Frank Act on its 4-year Anniversary
On Wednesday, the full committee held a hearing to assess the impact of the Dodd-Frank Act on America’s Main Street economy and hard-working American taxpayers on its 4th anniversary of being signed into law.
"It wasn’t deregulation; it was bad regulation that helped lead us into this crisis. So if you get the wrong diagnosis you get the wrong remedy. Dodd-Frank has been the wrong remedy, adding incomprehensible complexity to incomprehensible complexity," said Chairman Jeb Hensarling (R-TX). "So at the time Dodd-Frank was passed, we were told it would would 'lift the economy,' 'end too big to fail,' 'end bailouts,' 'increase financial stability' and 'increase investment and entrepreneurship.' And instead, what have we learned? We have learned that it is now official that we are in the slowest, weakest recovery in the history of the nation. Tens of millions of our countrymen now unemployed or underemployed. Negative economic growth in the last quarter. Business startups at a 20-year low. One out of seven dependent upon food stamps."
"The House Financial Services Committee has moved numerous regulatory relief bills, a number of which have actually passed with bipartisan support; none of which I recall being taken up by the Democratic Senate," added Chairman Hensarling.
Mr. Dale Wilson, a community banker from San Diego, Texas provided a first-hand account to the committee of how Dodd-Frank's "excessive regulation and government micro-management" has forced banks to consolidate due to the inability to "maintain profitability in an environment where the regulatory compliance costs are increasing between 50 and 200 percent."
"The real costs of the increased regulatory burden are being felt by small town borrowers and businesses that no longer have access to credit. When a small town loses its only bank, it loses its lifeblood. It's more difficult to improve schools, health care facilities, and other infrastructure projects. I know it was not the intent of Congress when it passed Dodd-Frank to harm community banks, but that is the awful reality," said Mr. Wilson.
Paul Kupiec, a former FDIC official and current Resident Scholar at the American Enterprise Institute, also testified at the hearing and debunked the myth asserted by Dodd-Franks supporters that Dodd-Frank ended “Too Big to Fail.”
“Ironically, Dodd-Frank’s heightened expectations of a government’s commitment to remove the possibility of a future financial crisis may increase the probability that such a crisis will occur and require government support for the largest financial institutions that have been identified as too-big-to-fail,” said Kupiec.
Subcommittee Examines the SEC's Division of Corporation Finance
On Thursday, the Capital Markets and Government Sponsored Enterprises Subcommittee held a hearing to examine the SEC's Division of Corporation Finance. This was the second in a series of SEC oversight hearings.
"It is unfortunate indeed that the SEC still does not embrace its mission to promote capital formation with as much zeal and enthusiasm as it does with Dodd-Frank. Our markets and economy are worse for it," said Subcommittee Chairman Scott Garrett (R-NJ).
"At a time when small businesses continue to struggle to raise capital and investors are having difficulty earning a return on their investment, the SEC should not harm small business job-creators or the investing public by reducing the amount of participants in this field eligible for private placement," added Chairman Garrett.
"The JOBS Act and numerous bipartisan bills that have passed out of this committee highlight the fact that the SEC needs to do more to promote capital formation through common sense updates to its regulations," said Rep. Robert Hurt (R-VA).
Rep. Patrick McHenry | Four years after Dodd-Frank fix, system still broken
Among the great indignities of the financial crisis: American families were footing the bill for the massive taxpayer-funded bailouts of Fannie Mae, Freddie Mac and other large financial institutions while struggling to scrape by in the broken economy. In 2009, Bloomberg estimated that the U.S. government and other federal agencies had committed nearly $13 trillion to support these failing institutions. The nearly $13 trillion represented 90% of the U.S. gross domestic product for 2008. In signing the law, Obama claimed that never again would the American people foot the bill for these large firms. Yet amazingly Dodd-Frank does not just fail to end these bailouts, it cements them into law and greatly increases the likelihood the American people will be stuck with the federal government's bailout tab again in the future.
Weekend Must Reads
Fox News | Derailing the American Dream since 2010: Thanks a lot, Dodd-Frank
Dodd-Frank and the rest of Washington over-regulation help explain why the U.S. economy today is $1.6 trillion smaller than what an average economic recovery over the last 50 years looks like. This lackluster performance explains why a family of four today is missing more than $1,100 in after-tax income and why there are nearly 6 million fewer jobs compared with the average recovery. The answer is less Dodd-Frank, less red tape and more free enterprise and economic freedom. Free enterprise has lifted more people out of poverty than all the government anti-poverty programs combined. It is the only economic system that frees ordinary people to achieve extraordinary results.
Citizens Against Government Waste | CAGW Names CFPB Director Richard Cordray July Porker of the Month
He singled out window replacement, plumbing and electrical upgrades, and a new roof as cost centers for the renovations, yet plans for the building also include such luxurious amenities as an indoor waterfall, a four-story glass staircase, a sunken garden, a custom “green” roof, and stools commissioned from world-renowned sculptor Maya Lin. The building, which is being rented, was accepted in “as is” condition by CFPB officials, and will not even house all of the CFPB’s staff. The renovation will cost approximately $590 per square foot, which is more than double the average cost for renovating some of Washington’s most high-end office buildings. According to the House Financial Services Committee, “…the CFPB is spending much more per square foot than it cost to build the Trump World Tower ($334/square foot), the Bellagio Hotel and Casino ($330/square foot) and the Burj Khalifa in Dubai ($450/square foot).” The latest estimated cost of $215.8 million is 37 percent greater than the value of the building, which was appraised at $157.3 million in 2011. House Financial Services Chairman Jeb Hensarling (R-Texas) has demanded that Director Cordray produce “full, unredacted” records related to the escalating costs for the building renovation by July 31, 2014.
Washington Times | At 4, Consumer Financial Protection Bureau is still unaccountable
The bureau's head, currently Richard Cordray, cannot be fired, no matter how poor his performance. He's armed with unlimited authority, enabling him to splurge on luxuries. He spent $216 million redecorating the bureau's headquarters with such amenities as a two-story waterfall and a glass staircase. The "consumer protection" bureau is now worth more per square foot than the Bellagio Hotel in Las Vegas or the opulent Burj Khalifa in Dubai, where a guest can sleep in a room designed by Giorgio Armani for $7,000 per night (if he can sleep at all after paying $7,000 for a place to sleep).
Investor's Business Daily | Four Years In, Dodd-Frank Hasn't Fixed Anything
"Ironically, Dodd-Frank's heightened expectations of a government commitment to remove the possibility of a future financial crisis may increase the probability that such a crisis will occur and require government support," former FDIC official Paul Kupiec, now with the American Enterprise Institute, testified this week. Meanwhile, nonbanks such as GE Capital, GMAC and other industrial finance companies came under the government's heavy regulatory hand for the first time ever. New agencies like the Consumer Financial Protection Bureau, which now controls all consumer lending, and the Financial Stability Oversight Council, a super-regulatory board with sweeping powers and no direct accountability to Congress, have become a dead hand.
On the Horizon
July 29, 2014 10:00 a.m.
In the News
Wall Street Journal | House Republicans Take Aim at Dodd-Frank
Wall Street Journal | Dodd-Frank Law Still Far From Finished
Wall Street Journal | Four Years of Dodd-Frank Damage
American Banker | DOJ Memo Leaves No Doubt About Choke Point’s Motives
American Banker | In Year Four of Dodd-Frank, Over-Regulation Is Getting Old
Washington Times | MORICI: Yellen’s denials of rising inflation
Posted by on July 24, 2014
The Export-Import Bank just can’t help themselves.
The United Arab Emirates (UAE), a country described as having “a high standard of living because of oil wealth,” sovereign wealth over $1 trillion in assets and a per-capita GDP of over $58,000, decided it needed some new aircraft and turbines.
Who better to help than American taxpayers through the Export-Import Bank?
In FY2013, the Ex-Im Bank offered over $1 billion worth of loans and loan guarantees backed by hardworking Americans’ taxpayer dollars to the UAE to buy aircraft from Boeing and turbines from General Electric.
With this latest deal, U.S. taxpayers have a total exposure of more than $6.2 billion to the oil-rich UAE, all thanks to Ex-Im.
If a country clearly has the means to finance projects without relying on American taxpayers, why should it get money from Ex-Im?
Posted by Staff on July 23, 2014
Mexico-based satellite operator known as Satmex announced it doesn’t need a loan from the Export-Import Bank to finance the purchase of Boeing satellites.
But that’s no reason not to take the “free money” financed by hardworking U.S. taxpayers through Ex-Im, is it?
In a conference call with investors, Satmex’s CEO Juan Garcia “said the company is nonetheless still working” to receive “a low-interest loan” from Ex-Im for $255.4 million, according to a report in SpaceNews.
If a company can finance a project without Ex-Im, why should it get money from Ex-Im?
Posted by Staff on July 22, 2014
Published July 21, 2014
By Rep. Jeb Hensarling
President Obama promised the sprawling Dodd-Frank Act he signed four years ago this week would “lift the economy,” “end too big to fail,” “end bailouts,” and “increase investment and entrepreneurship.”
Instead, Dodd-Frank has done the opposite, making it harder for Americans to achieve their dreams for themselves and their families.
Supporters of Dodd-Frank said its 400-plus regulations were needed to fix the “deregulation” that caused the 2008 financial crisis. But regulations on the financial industry actually increased every year in the decade leading up to the crisis. Much of this red tape either required, incented or browbeat financial institutions into making loans to people to buy homes they could not afford to keep.
A great tragedy of the crisis was not that Washington regulations failed to prevent it, but helped lead us into it.
Under Dodd-Frank, the big banks have gotten bigger, the small banks have gotten fewer, and the taxpayer has gotten poorer.
Dodd-Frank is every bit as far-reaching in its harmful consequences as ObamaCare. Like ObamaCare, with Dodd-Frank we see once again Democrats in Washington dictating the choices individuals can make, commanding the operations of businesses, and harming our ability to compete.
With its creation of new bureaucracies on top of an already balkanized, overly-complex regulatory structure, Dodd-Frank grants an extreme level of power to Washington bureaucrats that is more appropriate for a government controlled economy than one built upon freedom, free enterprise and free markets.
Rather than benefiting American consumers and workers, the law has unintended consequences on every one of its 2,300 pages.
Thanks to the Consumer Financial Protection Bureau’s Qualified Mortgage rule, Dodd-Frank makes it harder for low and moderate-income Americans to buy a home. According to a Federal Reserve study, roughly one third of African-American and Hispanic borrowers would not be able to obtain a mortgage based solely on the CFPB’s debt-to-income requirements.
Because of Dodd-Frank’s crushing regulatory burden, there are fewer community financial institutions serving the needs of small businesses and families. Under Dodd-Frank, the big banks have gotten bigger, the small banks have gotten fewer, and the taxpayer has gotten poorer. Consumers have less access to credit and to financial products and services they want and need.
The new “end user” margin requirements imposed by Dodd-Frank mean Main Street businesses and farmers face higher costs in managing their risk. These costs are passed on to consumers and felt directly by every American family when they sit down at the kitchen table.
Dodd-Frank’s Volcker rule makes U.S. capital markets less competitive against other international financial centers. It’s more expensive for U.S. companies to raise working capital and harder for Americans saving for retirement or their children’s college educations.
Dodd-Frank created the Financial Stability Oversight Council and gave it the power to designate certain large businesses as “Systemically Important Financial Institutions” (SIFIs). Now insurance companies that pose no discernible systemic risk to the economy are being subjected to unnecessary regulation that dries up capital for infrastructure projects, and harms investors and policy-holders.
Rather than ending bailouts, Dodd-Frank entrenches bailouts as official government policy. In the words of Richard Fisher, the President of the Dallas Federal Reserve Bank, “SIFIs occupy a privileged position in the financial system.” They are “viewed by the market as being the first to be saved by the first responders in a financial crisis.”
Thanks to Dodd-Frank’s Durbin amendment, services that bank customers once took for granted like free checking are being curbed or eliminated.
Dodd-Frank is one of the linchpins of an Obama economic strategy that has brought America the slowest, weakest non-recovery recovery since the Great Depression.
Never before in my lifetime do I remember a time when the challenges of upward mobility and economic opportunity have been greater. Not surprisingly, I also do not ever recall a time when the red tape burdens on our job creators and capital markets have been greater.
Whether it’s Dodd-Frank, ObamaCare or the IRS, the heavy burden of Washington regulations is choking our economy and the ability of employers to hire more workers.
The numbers tell the story: 16 million Americans unemployed or underemployed; the smallest percentage of workers in our labor force in three decades; and small business start-ups at the lowest level in 20 years.
Dodd-Frank and the rest of Washington over-regulation help explain why the U.S. economy today is $1.6 trillion smaller than what an average economic recovery over the last 50 years looks like. This lackluster performance explains why a family of four today is missing more than $1,100 in after-tax income and why there are nearly 6 million fewer jobs compared with the average recovery.
The answer is less Dodd-Frank, less red tape and more free enterprise and economic freedom.
Free enterprise has lifted more people out of poverty than all the government anti-poverty programs combined. It is the only economic system that frees ordinary people to achieve extraordinary results.
In the Financial Services Committee, we’ve focused on passing initiatives that make it easier to create jobs so more Americans can find work. So far, more than 20 of these jobs bills that have come out of our committee have passed the House with bipartisan support.
Among them are bipartisan bills to repeal Dodd-Frank regulations that make it harder to invest in small companies; to streamline rules so it’s easier for small business owners to sell their enterprises rather than close them up when they retire; and to require federal agencies to undertake a thorough cost-benefit analysis of proposed rules and choose the lowest cost alternative.
We’re advancing solutions to reduce red tape, help small businesses grow and expand opportunity for everyone. Many of these bipartisan bills relieve Main Street from burdensome Dodd-Frank regulations that we were told would apply only to Wall Street. But like dozens of other House-passed bills, they are stuck in the Senate.
If President Obama is serious about helping low and middle-income Americans, he will use his pen and phone for something other than executive power grabs. He will use them to call on Senate Democrats to get to work and do their part.
Posted by Staff on July 22, 2014
Why is Australia’s richest citizen – worth at least $18 billion – receiving loans backed by American taxpayers?
The Sydney Morning Herald calls it “the latest example of a flaw in the United States political economy: what some see as crony capitalism.”
Regrettably, “crony capitalism” is just what the Export-Import Bank does day-in, day-out: use hardworking taxpayers to finance crony deals for the powerful, the wealthy, and the well-connected.
Here are the deal details:
Australia’s richest citizen, billionaire mining heiress Gina Rinehart, secured a $694 million loan from American taxpayers thanks to Ex-Im’s support for the Roy Hill iron ore project.
Why are U.S. taxpayers involved? Because – as the newspaper reports – “Commercial banks and bond investors were reluctant to shoulder all the risk.”
If big banks and bond investors won’t take the risk, then why should American taxpayers be forced to?
Could this egregious deal get any worse? Why, yes.
Not only does Ex-Im risk taxpayers’ hard-earned dollars, Ex-Im’s financing of the deal also puts American jobs at risk. Four Democratic senators say the project will “substantially injure American iron ore and steel producers and their employees that are competing in the same global marketplace.”
Explains Senator Amy Klobuchar (D-MN): “My grandfather worked 1,500 feet underground as a miner, and countless other men and women in Northern Minnesota have worked hard providing iron ore to the world. It doesn’t make sense for our government to be funding our competition, especially when this project could have such a negative impact on local economies and the livelihoods of so many miners.”
Posted by Staff on July 22, 2014
At his event in Seattle tonight, it won’t be surprising if President Obama praises the Export-Import Bank as a “jobs creator” that “doesn’t cost taxpayers anything.”
It’s a far cry from how he used to describe the Export-Import Bank – as “little more than a fund for corporate welfare.”
The President may hope that his audience is unfamiliar with those remarks. He may also hope they overlook the fact that the Ex-Im Bank has been doing business with Russian companies that his Treasury Department added to its sanctions list.
But here are five important facts about Ex-Im:
1). The Ex-Im Bank doesn’t create jobs.
Government export finance assistance programs like Ex-Im “largely shift production among sectors within the economy rather than raise the overall level of employment in the economy.” - Government Accountability Office, “Export-Import Bank: Key Factors in Considering Ex-Im Bank Reauthorization”
“[A]t best the Ex-Im Bank creates jobs in export industries by destroying jobs in non-export industries.” – Donald Bodreaux, Ph.D, Professor of Economics at George Mason University\
“By some estimates, the Bank’s loan guarantees have resulted in up to 7,500 lost U.S. carrier jobs, and up to $684 million of lost income for U.S. airline employees annually.” – Delta Airlines
2). The Ex-Im Bank doesn’t return money to the taxpayers.
The Ex-Im Bank’s profits aren’t real. They are an accounting illusion. The non-partisan Congressional Budget Office (CBO) reports that if the Bank followed more accurate accounting rules, its ledger would show a cost to taxpayers of $200 million/year, or $2 billion over 10 years. -- CBO Fair-Value Estimate
3). Less Than 1 Percent of 1 Percent of America’s Small Businesses Benefit From Ex-Im.
Congress requires that 20% of Ex-Im’s authorizations go to small businesses, but Ex-Im consistently fails to meet this statutory requirement. In reality, just 0.009 percent of America’s small businesses receive any help at all from Ex-Im.
Instead, Ex-Im’s subsidies go overwhelmingly to very large corporations like Boeing, GE and Caterpillar.
4). The Ex-Im Bank uses American taxpayers’ money to help foreign corporations, including businesses that are owned by the governments of China, Russia, Saudi Arabia, and the United Arab Emirates.
Of the 50 largest loans or guarantees approved by the Ex-Im Bank since FY2007, 46% of the loans have gone to state-owned companies or to a joint-venture that includes a state-owned company.
5). The Ex-Im Bank financed only 1.6% of total U.S. exports in 2013.
That’s less than 0.18 percent of the total U.S. economy.
Posted by Staff on July 21, 2014
On Wednesday at 10:00 a.m. the Full Committee will hold a hearing to assess the impact of the Dodd-Frank Act on its four-year anniversary. To view the committee staff report on “too big to fail” that was released today, click here.
On Thursday at 10:00 a.m. the Capital Markets and Government Sponsored Enterprises Subcommittee will hold a hearing to examine the SEC’s Division of Corporation Finance.
Be sure to check back here on the Bottom Line Blog -- and sign up for our email updates -- for additional information throughout the week.
Posted by Staff on July 21, 2014
With One Hand U.S. Sanctions Russian Companies, But With the Other…
The Export-Import Bank is financing deals with Russian companies hit
Two of the four Russian firms targeted with new sanctions announced last week by the Obama administration have received more than $1 billion in U.S. taxpayer-financed subsidies from the Export-Import Bank.
Vnesheconombank (VEB) and Gazprombank – two state-owned Russian banks – have together received more than $1 billion in Ex-Im financing since 2003.
Here are the deal details:
In 2003, Gazprombank received a five-year loan guarantee worth $22.6 million from Ex-Im.
VEB alone has received over $1 billion in Ex-Im backed loan guarantees. This includes a $496 million loan guarantee in 2012 and a $703 million loan guarantee in 2014.
The sanctions do not apply to these existing arrangements, “meaning Ex-Im is under no obligation to cancel previous deals it has with either company,” according to one report.
Ex-Im Bank Chairman Fred Hochberg (left) with Vladimir Dmitriev, Chairman, Vnesheconombank
Posted by Staff on July 18, 2014
Full Committee Receives Semi-Annual Testimony on Monetary Policy and the State of the Economy
On Wednesday, the full committee held a hearing to receive the semi-annual testimony from Federal Reserve Chair Janet Yellen on the conduct of monetary policy and the state of the economy.
Members of the committee called attention to the Federal Reserve Accountability and Transparency Act introduced by Rep. Bill Huizenga (R-MI) and Rep. Scott Garrett (R-NJ), which the committee held a hearing on last week.
"The overwhelming weight of evidence is that monetary policy is at its best in maintaining stable prices and maximum employment when it follows a clear, predictable monetary policy rule. I believe the period of the Great Moderation between 1987 and 2002 attests to this proposition. Had a clear, predictable monetary policy rule like the Taylor Rule been in place throughout the last decade, it is likely the financial crisis would have been avoided in the first place, or at least downgraded to a garden variety recession," said Chairman Jeb Hensarling (R-TX).
The Federal Reserve Accountability and Transparency Act “in no way, shape or form dictates monetary policy. Anybody who maintains otherwise either hasn’t read the act, doesn’t understand the act or regrettably they are trying to mislead others," said Chairman Hensarling. "The Fed can set any rule it wishes. It can change the rule anytime it wishes. It can deviate from the rule anytime it wishes. Under the FRAT Act, it simply has to report and explain this to the rest of us. That’s what transparency and accountability are all about."
Subcommittee Examines Justice Department's "Operation Choke Point"
On Tuesday, the Oversight and Investigations Subcommittee held a hearing to review the Justice Department's actions regarding Operation Choke Point. Members of the subcommittee voiced concerns that lawfully-operating businesses are being denied access to banking services.
"Our concern is, we have a federal government that's out of control. And we have bureaucrats who think they can get a swift idea and impose the heavy hand of government on legitimate businesses that have had no adjudication of fraud. But you come in here and you say, 'fraudulent, fraudulent, fraudulent,' and you haven't proved it at all," said Rep. Sean Duffy (R-WI).
Subcommittee Chairman Patrick McHenry (R-NC) said, "equally important to the federal prosecution of alleged fraudsters are lawful methods by which the government and regulators identify and investigate those in question. For any division of government to seemingly circumvent lawful, judicious means of conducting federal investigations, it not only subjects itself to rigorous congressional oversight, but it also betrays those who it seeks to protect. And that's the American people."
Subcommittee Discusses Proposals to Reduce Excessive Red Tape
On Tuesday, the Financial Institutions and Consumer Credit Subcommittee held its second hearing to examine legislation designed to reduce the regulatory burden and streamline regulatory compliance for community financial institutions. Members of the subcommittee sought to ensure that consumers would have greater access to the financial products that they want and need.
Subcommittee Chairman Shelley Moore Capito (R-WV) discussed ways to ensure that community banks were able to maintain mortgage-servicing rights so that consumers were "able to go to the institution which they know is carrying these servicing rights" and "know exactly when and how and who is servicing their mortgage."
"A bank's board and the bank's management is in a much better position to ascertain the reputational risk of that bank than an unaccountable, unelected federal regulator in Washington, D.C.," said Rep. Andy Barr (R-KY).
Subcommittee Discusses the Bank Account Seizure of Terrorist Assets (BASTA) Act
On Thursday, the Monetary Policy and Trade Subcommittee held a hearing to discuss matters related to the execution of court judgments against assets of the Fuerzas Armadas Revolucionarias de Colombia (FARC) for actions taken against Americans captured in Columbia by the group in 2003.
"Today we'll be discussing those difficult topics and some matters of extraordinary complexity involving ways to fairly compensate victims of these heinous acts," said Rep. Bill Huizenga (R-MI).
Rep. Bill Huizenga | Video: Rep. Huizenga: The Fed Is Due for a Tune-Up
Rep. Bill Huizenga (R-MI) discusses the legislation to curb Federal Reserve powers with Peter Cook on "Street Smart."
Weekend Must Reads
Investor's Business Daily | Fed's Failed Monetary Experiment About To End
It'll be years before all the damage to our economy is fully known. But it should be clear by now if it wasn't before: The Fed's radical intervention has not been a success, and the costs are only now becoming apparent.
CNBC | Looks like the Fed wants to have even more power
"The whole financial system and economy of the United States is now a laboratory experiment as macroprudential policies are put in place by those very people who failed to understand or correct the excesses that developed in the last financial crisis," Bove said in a note to clients. "More problematic is the fact that macroprudential policy requires regulators to control the growth and direction of the U.S. economy. It denies the right of the private sector to grow in any direction it chooses without the explicit control of the government. It is anti-capitalistic."
Committee on Financial Services | The Six Biggest Inaccuracies in the July 10 Bloomberg Businessweek Article Regarding the CFPB’s Building Renovations
The Financial Services Committee will continue to investigate why CFPB leadership decided to commit the Bureau to a quarter billion dollars in long-term lease payments without performing any due diligence, and why it has decided to spend an additional $215.8 million to renovate a building it doesn’t own, an amount that is more than $70 million higher than the building’s appraised value.
In the News
Wall Street Journal | How to Spark Another 'Great Moderation'
The Hill | Republicans start small on Fed reforms
Wall Street Journal | Boeing Will Survive an Ex-Im Defeat
In Case You Missed It
Posted by Staff on July 18, 2014
The U.S. Statement Department reports the Democratic Republic of the Congo (DRC) is a country with “major human rights problems.” One human rights organization labelled it the “rape capital of the world.” According to another report, women in this country were raped by security forces to stop “women speaking about politics, human rights and, in some cases, rape itself.”
Despite these horrific abuses and the DRC’s recent track record of default, the Ex-Im Bank is open for business there, risking more taxpayer money in the process.
Here are the deal details:
Since 2010, the Ex-Im Bank has approved more than $3 million in financing for deals in the DRC, including the financing for many mining projects. Recently, the Obama Administration forgave $979 million in defaulted DRC government debt, which came from U.S. taxpayer-backed Ex-Im financing to the DRC. In 2010, Kerry Kennedy, founder of the Robert F. Kennedy Memorial Center for Human Rights, argued that it was the “Wrong Time for Congo Debt Forgiveness.”
American taxpayers should be asking why the Ex-Im Bank is back in business in the DRC, providing financing to mining companies in a country with a terrible human rights record and a history of defaulting on hardworking American taxpayers.
Today, the Export-Import Bank’s total exposure to the country is over $2 million.