AAFA 'Ringing the Alarm Bells' on Crisis for Trade Credit Insurance
The American Apparel and Footwear Association is calling on the federal government to temporarily provide reinsurance to insurers that provide trade credit insurance to importers. AAFA CEO Steve Lamar pointed to a report published July 9, and funded by trade credit insurance firms, that lays out the concept. Reinsurance would protect insurers, at least partially, from losses if retailers were not able to pay apparel companies for what the retailers had ordered.
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Lamar said AAFA has been “ringing the alarm bells about the looming credit crisis,” and that without trade credit insurance, importers will have to place smaller orders, especially given cash flow uncertainty during the pandemic. “The Federal government must take action today to make sure credit markets are fully functioning throughout the crucially important holiday season,” Lamar said in a press release.