H.R. 597 — what changed

removed This Act may be cited as the “Reform Exports and Expand the American Economy Act”.

changed Section 3 6(a) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) 635e(a)) is amended by adding at the end the following:amended—

added “(2) Applicable amount defined—In this subsection, the term applicable amount, for each of fiscal years 2015 through 2019, means $135,000,000,000.

added “(3) Freezing of lending cap if default rate is 2 percent or more—If the rate calculated under section 8(g)(1) is 2 percent or more for a quarter, the Bank may not exceed the amount of loans, guarantees, and insurance outstanding on the last day of that quarter until the rate calculated under section 8(g)(1) is less than 2 percent.”

removed “(k) Office of Ethics

removed “(1) Establishment—There is hereby established an Office of Ethics within the Bank, which shall oversee all ethics issues within the Bank.

removed “(2) Head of office—The head of the Office of Ethics shall be the Chief Ethics Officer, who shall be appointed by the Board of Directors of the Bank, within 180 days after the date of the enactment of this paragraph, from among persons with a background in law who have experience in the fields of law and ethics, including the individual serving as a designated agency ethics official for the Bank pursuant to Ethics in Government Act of 1978. The Chief Ethics Officer shall report to the Board.

removed “(3) Duties—The Office of Ethics has jurisdiction over all employees and contractors of, and matters relating to, the Bank. With respect to employees and contractors of the Bank, the Office of Ethics may—

removed “(A) recommend administrative actions to establish or enforce standards of official conduct;

removed “(B) investigate alleged violations of the Code of Official Conduct or of any applicable rules, laws, or regulations governing the performance of official duties or the discharge of official responsibilities;

removed “(C) report to appropriate Federal or State authorities substantial evidence of a violation of any law applicable to the performance of official duties that may have been disclosed in an Office of Ethics investigation, subject to approval of the report by an affirmative vote of a majority of the Board of Directors of the Bank; and

removed “(D) render advisory opinions regarding the propriety of any current or proposed conduct of employee or contractor of the Bank, and issue general guidance on such matters as necessary.”

added “(b) Reserve requirement—The Bank shall build to and hold in reserve, to protect against future losses, an amount that is not less than 5 percent of the aggregate amount of disbursed and outstanding loans, guarantees, and insurance of the Bank.”

removed Section 17(b) of the Export-Import Bank Reauthorization Act of 2012 (12 U.S.C. 635a–6(b)) is amended to read as follows:

removed “(b) Review of fraud controls—Not less frequently than every 4 years, the Comptroller General of the United States shall—

removed “(1) review the adequacy of the design and effectiveness of the controls used by the Export-Import Bank of the United States to prevent, detect, and investigate fraudulent applications for loans and guarantees and the compliance by the Bank with the controls, including by auditing a sample of Bank transactions, and

removed “(2) submit to the Committees on Financial Services and Appropriations of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Appropriations of the Senate a written report regarding the findings of the review and providing such recommendations with respect to the controls as the Comptroller General deems appropriate.”

changed Section 8 17(b) of the Export-Import Bank Reauthorization Act of 1945 2012 (12 U.S.C. 635g) 635a–6(b)) is amended by adding at the end the following:to read as follows:

changed “(k) Reports on private export financing and “(b) Review of fraud controls—Not later than 4 years after the date of the enactment of the Export-Import Bank pricing Reform and credit standardsReauthorization Act of 2015, and every 4 years thereafter, the Comptroller General of the United States shall—

changed “(1) Private export financing—The Board review the adequacy of Governors the design and effectiveness of the Federal Reserve System shall issue a semiannual report to controls used by the Congress on Export-Import Bank of the terms United States to prevent, detect, and conditions (including interest rates, maturities, investigate fraudulent applications for loans and credit standards) that apply in guarantees and the provision of export finance compliance by private financial institutions.the Bank with the controls, including by auditing a sample of Bank transactions; and

changed “(2) Bank pricing and credit standards—The Bank shall issue an annual submit a written report to the Congress on the steps taken by the Bank to adjust regarding the pricing findings of products offered, the review and providing such recommendations with respect to the credit standards used, by controls described in paragraph (1) as the Bank to avoid crowding out private export finance.”Comptroller General deems appropriate to—

added “(A) the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate; and

added “(B) the Committee on Financial Services and the Committee on Appropriations of the House of Representatives.”

changed Section 8 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g), as amended by section 103 of this Act, 635a) is amended by adding at the end the following:

changed “(l) Recommendations regarding prohibited countries—The Board of Directors of the Bank, in consultation with Congress, the President, and the Secretary “(k) Office of State, shall develop recommendations annually regarding the countries with whom and in which the Bank should not be doing business, and the Bank shall include the recommendations in its annual report to the Congress under subsection (a).”Ethics

added “(1) Establishment—There is established an Office of Ethics within the Bank, which shall oversee all ethics issues within the Bank.

added “(2) Head of office

added “(A) In general—The head of the Office of Ethics shall be the Chief Ethics Officer, who shall report to the Board of Directors.

added “(B) Appointment—Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Chief Ethics Officer shall be—

added “(i) appointed by the President of the Bank from among persons—

added “(I) with a background in law who have experience in the fields of law and ethics; and

added “(II) who are not serving in a position requiring appointment by the President of the United States before being appointed to be Chief Ethics Officer; and

added “(ii) approved by the Board.

added “(C) Designated agency ethics official—The Chief Ethics Officer shall serve as the designated agency ethics official for the Bank pursuant to the Ethics in Government Act of 1978 (5 U.S.C. App. 101 et seq.).

added “(3) Duties—The Office of Ethics has jurisdiction over all employees of, and ethics matters relating to, the Bank. With respect to employees of the Bank, the Office of Ethics shall—

added “(A) recommend administrative actions to establish or enforce standards of official conduct;

added “(B) refer to the Office of the Inspector General of the Bank alleged violations of—

added “(i) the standards of ethical conduct applicable to employees of the Bank under parts 2635 and 6201 of title 5, Code of Federal Regulations;

added “(ii) the standards of ethical conduct established by the Chief Ethics Officer; and

added “(iii) any other laws, rules, or regulations governing the performance of official duties or the discharge of official responsibilities that are applicable to employees of the Bank;

added “(C) report to appropriate Federal or State authorities substantial evidence of a violation of any law applicable to the performance of official duties that may have been disclosed to the Office of Ethics; and

added “(D) render advisory opinions regarding the propriety of any current or proposed conduct of an employee or contractor of the Bank, and issue general guidance on such matters as necessary.”

changed Section 3(c) 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(c)) 635a), as amended by section 104, is further amended by redesignating paragraph (10) as paragraph (11) and inserting after paragraph (9) adding at the end the following:

changed “(10) Independent audit by the Comptroller General“(l) Chief Risk Officer

changed “(A) Annual audit—The Comptroller General of the United States shall, before the end of the 1-year period beginning on the date of the enactment of this paragraph and each year thereafter, carry out an audit “(1) In general—There shall be a Chief Risk Officer of the Bank’s loan, guarantee, insurance, and credit programs.Bank, who shall—

changed “(B) Report—At the completion of each audit required under subparagraph (A), the Comptroller General shall issue a report “(A) oversee all issues relating to the Bank and risk within the Congress containing—Bank; and

changed “(i) all findings and determinations made in carrying out “(B) report to the audit; andPresident of the Bank.

changed “(ii) any recommendations that “(2) Appointment—Not later than 180 days after the Comptroller General may have—date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Chief Risk Officer shall be—

changed “(I) to assist the Bank in fulfilling “(A) appointed by the accounting and reporting responsibilities President of the Bank;Bank from among persons—

changed “(II) to ensure that “(i) with a demonstrated ability in the Bank has adequate administrative general management of, and knowledge of and extensive practical experience in, financial controls; risk evaluation practices in large governmental or business entities; and

changed “(III) with respect to procedures for the internal audit functions of, and “(ii) who are not serving in a position requiring appointment by the use President of independent accountants by the Bank.”United States before being appointed to be Chief Risk Officer; and

added “(B) approved by the Board.

added “(3) Duties—The duties of the Chief Risk Officer are—

added “(A) to be responsible for all matters related to managing and mitigating all risk to which the Bank is exposed, including the programs and operations of the Bank;

added “(B) to establish policies and processes for risk oversight, the monitoring of management compliance with risk limits, and the management of risk exposures and risk controls across the Bank;

added “(C) to be responsible for the planning and execution of all Bank risk management activities, including policies, reporting, and systems to achieve strategic risk objectives;

added “(D) to develop an integrated risk management program that includes identifying, prioritizing, measuring, monitoring, and managing internal control and operating risks and other identified risks;

added “(E) to ensure that the process for risk assessment and underwriting for individual transactions considers how each such transaction considers the effect of the transaction on the concentration of exposure in the overall portfolio of the Bank, taking into account fees, collateralization, and historic default rates; and

added “(F) to review the adequacy of the use by the Bank of qualitative metrics to assess the risk of default under various scenarios.”

added “(m) Risk management committee

added “(1) Establishment—There is established a management committee to be known as the “Risk Management Committee”.

added “(2) Membership—The membership of the Risk Management Committee shall be the members of the Board of Directors, with the President and First Vice President of the Bank serving as ex officio members.

added “(3) Duties—The duties of the Risk Management Committee shall be—

added “(A) to oversee, in conjunction with the Office of the Chief Financial Officer of the Bank—

added “(i) periodic stress testing on the entire Bank portfolio, reflecting different market, industry, and macroeconomic scenarios, and consistent with common practices of commercial and multilateral development banks; and

added “(ii) the monitoring of industry, geographic, and obligor exposure levels; and

added “(B) to review all required reports on the default rate of the Bank before submission to Congress under section 8(g).”

removed Section 3(e) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(e)) is amended by adding at the end the following:

removed “(3) Ethics

removed “(A) Code of ethics

removed “(i) In general—The Chief Ethics Officer shall draft a Code of Ethics that sets out strict and definite standards of official conduct for all Bank directors, officers, and employees, which Code shall include a policy that prohibits conflicts of interest, as described in paragraph (1) of this subsection, and other policies, prohibitions, and restrictions that the Chief Ethics Officer deems appropriate.

removed “(ii) Considerations—In drafting the Code of Ethics, the Chief Ethics Officer shall consider the Principles of Ethical Conduct for Government Officers and Employee set forth in Executive Order 12731 (Oct. 17, 1990).

removed “(iii) Consistency with Ethics in Government Act of 1978—The Chief Ethics Officer shall ensure that the Code of Ethics is consistent with the Ethics in Government Act of 1978 and the regulations promulgated under such Act.

removed “(iv) Effectiveness; amendment—The Code of Ethics (and an amendment to the Code) shall take effect on approval by the Board. The Code of Ethics may be amended only on the recommendation of the Chief Ethics Officer.

removed “(v) Annual employee certifications—The Board, in consultation with the Chief Ethics Officer, shall implement a policy that requires all Bank directors, officers, and employees to certify annually that they have read, understand, and complied with and will continue to comply with the Code of Ethics. The annual certifications shall contain a statement that notifies the signatory that section 1001 of title 18, United States Code, applies to the certification.

removed “(B) Financial disclosure

removed “(i) In general—Within 180 days after the date of the enactment of this paragraph, the Board, in consultation with the Chief Ethics Officer, shall prepare a financial disclosure form for Covered Individuals, which form shall—

removed “(I) require information about assets, income, debts, and any other financial information that the Board deems appropriate for ensuring that a Covered Individual is in compliance with the Code of Ethics established under subparagraph (A); and

removed “(II) be no less extensive than financial reports required to be filed under title I of the Ethics in Government Act of 1978 and the regulations promulgated under such Act.

removed “(ii) Financial reporting policy—The Board, in consultation with the Chief Ethics Officer, shall implement a policy that—

removed “(I) requires each Covered Individual and the spouse of the Covered Individual to annually complete the financial disclosure form and submit the completed form to the General Counsel or his or her designee for review; and

removed “(II) allows any Covered Individual who is required to file financial reports under title I of the Ethics in Government Act of 1978 or any other Federal law to file the financial reports under such title or other law in lieu of the financial disclosure form described in this subparagraph, but the Board may require those who do so to supplement the financial report with all information required to be disclosed under this subparagraph.

removed “(iii) Covered Individual defined—In this subparagraph, the term Covered Individual means any Bank director, officer, employee, or contractor with the ability to affect any Bank decision relating to financing, funding, insuring, or otherwise providing backing to any company or project.

removed “(iv) Availability of completed financial disclosure forms

removed “(I) In general—The Bank shall make completed financial disclosure forms available to the Office of Inspector General for the Bank.

removed “(II) Prohibitions—A completed financial disclosure form shall not be made available—

removed “(aa) to another Bank director, officer, employee, attorney, or agent, except as necessary to ensure compliance of a Covered Individual with this subparagraph, the Code of Ethics, or any applicable law; or

removed “(bb) to the public.

removed “(C) Rule of interpretation—Nothing in this paragraph shall supersede, modify, change, or otherwise affect any requirement, procedure, or restriction applicable to a Bank employee, officer, or director under the Ethics in Government Act of 1978 that applies in addition to the requirements, procedures, and restrictions applicable to a Bank employee, officer, or director under this paragraph.”

removed Section 2(b)(1)(E) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)(E)) is amended by adding at the end the following:

removed “(xi) Electronic documents—Not later than the end of the 2-year period beginning on the date of the enactment of this clause, the Bank shall implement policies to accept electronic documents whenever possible, including copies of bills of lading, certifications, and compliance documents.

removed “(xii) Electronic payments—Not later than the end of the 2-year period beginning on the date of the enactment of this clause, the Bank shall implement policies to accept electronic payments in all of its programs.”

removed Section 2(a)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(a)(1)) is amended by striking “Net earnings of the Bank after reasonable provision for possible losses shall be used for payment of dividends on capital stock.” and inserting “The Bank shall retain not less than 30 percent of total net earnings as a provision for possible losses. Notwithstanding the previous sentence, during any period when the aggregate of such retained earnings is less than 10 percent of the applicable amount (as defined under section 6(a)(2)), the Bank shall retain not less than 80 percent of total net earning as a provision for possible losses. Net earnings that are not retained as a provision for possible losses shall be used for payment of dividends on capital stock.”.

added “(k) Report on Programs for Small and Medium-Sized Businesses—The Bank shall include in its annual report to Congress under subsection (a) a report on the programs of the Bank for United States businesses with less than $250,000,000 in annual sales.”

removed Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) is amended—

removed “(v) no person may serve as the President of the Bank for more than 2 terms.”

changed Section 7 2(b)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635f) 635(b)(1)) is amended by striking “2014” and inserting “2019”.adding at the end the following:

added “(M) Not later than 2 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Bank shall implement policies—

added “(i) to accept electronic documents with respect to transactions whenever possible, including copies of bills of lading, certifications, and compliance documents, in such manner so as not to undermine any potential civil or criminal enforcement related to the transactions; and

added “(ii) to accept electronic payments in all of its programs.”

changed Section 1(c) 3(j) of Public Law 103–428 the Export-Import Act of 1945 (12 U.S.C. 635 note) 635a(j)) is amended by striking “2014” and inserting “2019”.amended—