Trade Drought Impacts Lobbyists

US Banker | November, 2009

The financial market crisis and global recession knocked the wind out of the export credit business and trade in general. Now two of the sector’s most prominent lobbying groups have been infected by the decline.

On Monday, the 90-year old Bankers’ Association for Finance and Trade (which operates under the umbrella of the American Bankers Association and is based in Washington, D.C.) and the 85-year old International Financial Services Association, in Parsippany, N.J., announced a merger of two trade associations. As of January 2010, a reconstituted BAFT-IFSA will represent interests of firms concerned with payments and international trade finance.

The groups promised a “financially stronger organization,” in a statement released on November 16. “No part of either organization or its work will be discontinued.”

Don Taylor, president and chief executive of IFSA, will not survive the wedding in his current role. As it stands now BAFT president Donna Alexander will become CEO of the combined organization, and the staffs will eventually be united in Washington, D.C. Some staff cuts seem inevitable, analysts believe. “In this time of focus on cost containment and improving efficiency, the merger of two such closely related industry groups is no surprise,” according to Aite Group senior analyst Nancy Atkinson. “By combining, these organizations slow the runoff of members, get efficiencies of scale for administrative functions, and increase their political clout with regulators.”

Meanwhile, the U.S. Export-Import Bank made another stab at keeping international trade alive and breathing. The bank will extend insurance coverage to some U.S. companies. Exporters that qualify as small businesses under Small Business Administration rules, with annual export credit sales of $7.5 million or less, “are eligible for enhanced coverage under Ex-Im Bank’s short-term small business multibuyer insurance policy,” according to an announcement. The old cut-off was $5 million in sale. Benefits include discounted premiums, free exporter performance risk protection, and no first-loss deductibles. The new policy takes effect on December 1.