Modification of default rate and lending cap

(a) In general Section 6(a)(3) of the Export-Import Bank Act of 1945 (12 U.S.C. 635e(a)(3)) is amended to read as follows: (3) Freezing of lending cap if default rate exceeds certain limitations (A) Traditional export credit portfolio The Bank may not exceed the amount of loans, guarantees, and insurance in the traditional export credit portfolio (as defined in section 8(g)(1)(B)) outstanding on the last day of a quarter if the rate calculated under section 8(g)(1) with respect to— (i) oil and gas transactions is 2 percent or more for that quarter; or (ii) all transactions in that portfolio other than oil and gas transactions is 4 percent or more for that quarter. (B) Make More in America Program portfolio The Bank may not exceed the amount of loans, guarantees, and insurance in the Make More in America Program portfolio (as defined in section 8(g)(1)(B)) outstanding on the last day of a quarter if the rate calculated under section 8(g)(1) with respect to that portfolio is 10 percent or more for that quarter. (C) China and Transformational Exports Program portfolio The Bank may not exceed the amount of loans, guarantees, and insurance in the China and Transformational Exports Program portfolio (as defined in section 8(g)(1)(B)) outstanding on the last day of a quarter if the rate calculated under section 8(g)(1) with respect to that portfolio is 10 percent or more for that quarter. (D) Termination of freeze (i) Traditional export credit portfolio A freeze under clause (i) or (ii) of paragraph (1)(A) shall remain in effect until the rate calculated under section 8(g)(1) with respect to— (I) in the case of a freeze under clause (i) of that paragraph, oil and gas transactions is less than 2 percent for that quarter; or (II) in the case of a freeze under clause (ii) of that paragraph, all transactions in the traditional export credit portfolio other than oil and gas transactions is less than 4 percent for that quarter. (ii) Make More in America Program portfolio A freeze under paragraph (1)(B) shall remain in effect until the rate calculated under section 8(g)(1) with respect to the Make More in America Program portfolio is less than 10 percent. (iii) China and Transformational Exports portfolio A freeze under paragraph (1)(C) shall remain in effect until the rate calculated under section 8(g)(1) with respect to the China and Transformational Exports Program portfolio is less than 10 percent. (iv) Contingencies Notwithstanding subparagraph (A), (B), or (C) of paragraph (1), a freeze under any such subparagraph shall terminate if— (I) the Secretary of Commerce determines that the continued operation of the Bank is in the national security or economic interests of the United States and notifies Congress not later than 30 days after making that determination; or (II) the Secretary of the Treasury determines that a financial crisis exists that requires the Bank to provide liquidity or risk enhancements to protect United States exports and notifies Congress not later than 30 days after making that determination.. (b) Calculating of default rates by portfolio Section 8(g)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635g(g)(1)) is amended to read as follows: (1) Monitoring of default rates (A) In general Not less frequently than quarterly, the Bank shall calculate the rate at which the entities to which the Bank has provided short-, medium-, or long-term financing are in default on a payment obligation under the financing, by dividing— (i) the total amount of the required payments that are overdue and are expected to become net losses after using the Bank’s reserves from collected interest and fees, by (ii) the applicable amount (as defined in section 6(a)(2)). (B) Accounting and default rates by portfolio The Bank shall maintain separate accounting of, and calculate a separate default rate under subparagraph (A) for— (i) all loans, guarantees, and insurance provided under the Make More in America Program pursuant to section 2(m) (in this Act referred to as the Make More in America Program portfolio); (ii) all loans, guarantees, and insurance provided under the China and Transformational Exports Program pursuant to section 2(l) (in this Act referred to as the China and Transformational Exports Program portfolio); and (iii) all loans, guarantees, and insurance provided under authorities other than the Make More in America Program pursuant to section 2(m) or the China and Transformational Exports Program pursuant to section 2(l) (in this Act referred to as the traditional export credit portfolio). (C) Separate risk reporting Not less frequently than quarterly, the Chief Risk Officer of the Bank shall report separately on the default rate, risk exposure, and portfolio performance of the traditional export credit portfolio and the Make More in America Program portfolio.. (c) Exclusion of transactions relating to Make More In America and China and Transformational Exports programs Section 8(g) of the Export-Import Bank Act of 1945 (12 U.S.C. 635g(g)), as amended by subsection (b), is further amended by adding at the end the following: (7) Exclusion of transactions relating to Make More In America and China and Transformational Exports programs For the purposes of this subsection, if financing provided under the Make More in America Program pursuant to section 2(m) or the China and Transformational Exports Program pursuant to section 2(l) results in a default rate calculated under paragraph (1) exceeding an applicable limitation under subparagraph (B) or (C) of section 6(a)(3), the Bank may, subject to the approval of the Board of Directors, exclude such financing from the calculation of the default rate.. (d) Conforming amendments Section 8(g) of the Export-Import Bank Act of 1945 (12 U.S.C. 635g(g)), as amended by subsections (b) and (c), is further amended— (1) in paragraph (3)— (A) by striking exceeds 2 percent and inserting exceeds a limitation under subparagraph (A), (B), or (C) of section 6(a)(3); (B) by striking be at least 2 percent and inserting equal or exceed that limitation; and (C) by striking less than 2 percent and inserting less than that limitation; (2) in paragraph (4)(B), by striking less than 2 percent and inserting less than the applicable limitation under subparagraph (A), (B), or (C) of section 6(a)(3); (3) in paragraph (5)— (A) in the paragraph heading, by striking is at least 2 percent and inserting equals or exceeds applicable limitation; (B) by striking the default rate and inserting a default rate; and (C) by striking is at least 2 percent and inserting equals or exceeds the applicable limitation under subparagraph (A), (B), or (C) of section 6(a)(3); and (4) in paragraph (6), in the matter preceding subparagraph (A)— (A) by striking the default rate and inserting a default rate; and (B) by striking remains above 2 percent and inserting continues to equal or exceed the applicable limitation under subparagraph (A), (B), or (C) of section 6(a)(3).