Ex-Im Failed to Adequately Explain Loan Procedures, Says Appeals Court
The U.S. Court of Appeals for the D.C. Circuit ruled the Export-Import Bank failed to fully justify its economic impact loan procedures, reversing the decision of the U.S. District Court in a case against the Bank brought by Delta Airlines…
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and the Air Line Pilots Association. The original suit, filed April 3, alleges the Bank’s loans for aircraft exports to foreign airlines harm U.S. airlines and their employees (see 13040523). The appeals court’s June 18 ruling agreed that the Bank failed to “reasonably explain” its justifications for part of its loan procedures, required under the Bank Act: the public law authorizing Ex-Im. The Act requires Ex-Im to determine how any potential loan might affect American industry and jobs. The Bank failed to explain its “apparent conclusion that loans and loan guarantees to help a foreign company provide a service (as opposed to a good) can never cause adverse effects to U.S. industries and U.S. jobs,” the Appeals Court decision said. The decision requires Ex-Im to explain how its economic impact procedures square with the Bank Act, “adequately consider and explain any adverse effects” of the particular loans Delta took issue with, or take any other action Ex-Im deems appropriate to comply with the Bank Act. The June 18 ruling did not vacate any of the Bank’s actions related to the case. Ex-Im will now be required to "take the complaints of industry participants seriously before proceeding with potentially harmful subsidies to foreign airlines," said Delta in a statement on the decision (here).