A report from e21, a nonpartisan economic think tank, reveals the true costs of the Export-Import Bank’s taxpayer subsidized loans could amount to more than $200 million in 2012 alone.

The current accounting method used by Ex-Im is based on the Federal Credit Reform Act of 1990 (FCRA) does not accurately reflect the true taxpayer burden. As the Congressional Budget Office (CBO) stated earlier this year:

FCRA-based cost estimates do not provide a full accounting of what federal credit programs actually cost the government because they do not incorporate the full cost of the risk associated with the loans. Fair-value accounting recognizes market risk … as a cost to the government.”

Proponents of Ex-Im have long argued that the bank makes a net profit for taxpayers based on the faulty FCRA method. However, using fair-value accounting, a method supported by CBO, e21 finds that:

“[T]he Ex-Im bank’s loan guarantees are made at sufficiently generous terms that borrowers receive subsidies of about 1% of the amount borrowed. That translates into a $200 million cost for taxpayers on the $21 billion in loans that the bank will make in 2012. Because the bank’s smaller loan programs already carry positive subsides under FCRA, the total subsidy level for the entire Ex-Im bank business is even higher than $200 million using fair-value estimates.

Senator DeMint supports the use fair-value accounting to bring full transparency to the true costs to taxpayers. Senator DeMint has strongly opposed the reauthorization of Ex-Im that would increase the taxpayer subsidized loan cap to $140 billion. He outlined his opposition in a recent op-ed in the Greenville News.


(Editor’s Note: The above communication is an email from an elected official. It does not necessarily reflect the editorial position of To submit your letter, news release, email blast, media advisory or issues statement for publication, click here).