BAFT Signs Onto a Letter in Support of EXIM

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On October 31, the House Financial Services Committee (HFSC) approved H.R. 4863, the United States Export Finance Agency Act of 2019, that reauthorizes the Export-Import Bank, by a vote of 30 to 27.

This bill includes strong provisions to promote certainty and stability in agency operations, such as a 10-year reauthorization, an increase in the authorization ceiling, and a quorum fix. The bill also renames EXIM as the United States Export Finance Agency.

The House Rules Committee will meet on Tuesday, November 12 to consider additional amendments filed and to set the rule for House floor consideration of HR. 4863 (Committee bill print here; Committee report here). A House floor vote on H.R. 4863 is likely to take place later this week. The list of amendments filed can be found here.

In anticipation of the House Rules Committee meeting, BAFT joined other trade associations to urge Congress to pass a long term reauthorization. The letter highlights the President’s support for a 10-year reauthorization, and signals support for both the House and the Senate bills.

You can read the letter in our Library of Documents page under Comment Letters.

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BAFT, the leading global trade association for transaction banking, today announced a partnership with International Finance Corporation which delivered training workshops on BAFT’s Respondent’s Playbook for Obtaining and Maintaining a Correspondent Banking Relationship in six African countries.

The program began in South Africa, and included workshops in Ethiopia, Ghana, Senegal, Cote D’Ivoire, and concluded in Madagascar. The objective of the workshops was to train respondent banks on correspondent banking due diligence expectations as outlined in BAFT’s Respondent’s Playbook. The workshops are geared toward private sector banks, primarily compliance and risk management staff, as well as transaction banking business lines (trade finance and payments) and credit officers.

The two-day workshop provided an overview of important considerations when establishing a new correspondent banking relationship, including financial crime exposure and compliance risk. Attendees also participated in an in-depth discussion on respondent best practices for due diligence, maintaining relationships, and working with money service businesses and fintech companies.

“We are thrilled to launch such an important capacity building initiative in cooperation with the IFC in markets deeply affected by correspondent banking de-risking,” said Tod Burwell, BAFT President and CEO.  “We hope that participants gained new knowledge and insight on ways to become strengthen relationships with correspondent banks.”

To learn how your organization may receive BAFT’s Respondent’s Playbook Training or for additional training and educational topics please email [email protected].

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BAFT joins a coalition of over two-hundred organizations and companies to call on members of the U.S. House and Senate to pass a robust and long-term reauthorization of the U.S. Export-Import Bank before its charter expires at the end of September.

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BAFT and several other industry associations responded to a Request for Information regarding Potential Regulatory Changes to the Remittance Rule issued by the Consumer Financial Protection Bureau (“CFPB”).

The letter focused on the banking industry’s continued reliance on the open network of correspondent banking to transfer funds cross-border and, therefore, the Rule’s Temporary Exception permitting the use of estimates for certain disclosures.  Download the comment letter.

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On June 27, 2019, the Senate Banking Committee met in an open session to conduct a hearing on the Oversight and Reauthorization of the Export-Import Bank of the United States.

The Honorable Kimberly Reed, President and Chairman of the Board of Directors of the Export-Import Bank of the United States offered testimony. BAFT has issued a Statement for the Record urging for the committee to move swiftly to pass a long-term reauthorization, prevent unnecessary disruptions to its activities by permanently resolving the quorum issue; increase EXIM’s statutory lending authority to align with market demands, and avoid unnecessary administrative roadblocks that will negatively affect the competitiveness of U.S. companies.

Read the Statement for the Record here. For additional information, please email [email protected].

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BAFT releases much anticipated Guidance Paper for Auto Extension thanks to the effort of the BAFT North America Standby LC Committee – Auto Extension working group.

Convened in November of 2015, by the members of the North America Standby LC Committee who put together a working group to study the use of auto-extension clauses in standby letters of credit and demand guarantees in the United States as applicable. The objective was to produce a white aper to be used as guidance for banks within the United States reflecting Auto Extension Best Practices as it relates to language suggestions, accounting practices and identification of “problem language.” This paper outlines the good, the bad and the ugly as it relates to auto-extension clauses and the challenges faced by banks in managing the associated risks.

BAFT’s Guidance Paper for Auto Extension is available for free to the global transaction banking community and can be found here.