Update: State of economic emergency for AmSam

Following meetings with banking officials in the U.S., Gov. Lolo Matalasi Moliga is now considering the issuance of a declaration of a state of economic emergency, due to the pending closure of Bank of Hawai’i in the territory. Meanwhile, the governor continues to take steps to forestall or mitigate the BoH departure set for Mar. 15.
 
Lolo made the revelation in a media statement following meetings Wednesday with officials of a Utah bank. The media statement also revealed that the Lolo administration has requested assistant from federal entities that oversee and regulate banking and financial institutions.
 
FEDERAL RESERVE BANK
 
Lolo disclosed that the administration on Monday filed a formal request with the Federal Reserve Bank of San Francisco  “request(ing) the Federal Reserve Bank of San Francisco to convene a meeting of Federal Reserve representatives, other interested depository institution regulatory agencies, community leaders and other appropriate individuals, organizations, and depository institutions, as you may determine.”
 
In the letter signed by Acting Gov. Lemanu Peleti Mauga, the territorial government recommends that BoH continue their operations in the territory for an additional 12 months, and asked the Federal Reserve to explore “the feasibility of obtaining adequate alternate facilities and services for the territory, including the establishment of a new branch by another depository institution, the chartering of a new depository institution, or the establishment of a community development credit union.”
 
Lolo had written recently to the U.S. Department of Interior saying that his administration will seek any assistance from the Federal Reserve Bank and his delegation — while in Washington D.C. this month for meetings — will also meet with officials of the Federal Reserve Bank.
 
The Federal Reserve Bank of San Francisco, District 12, provides wholesale banking services to financial institutions throughout the nine western states and American Samoa. As the nation’s central bank, the Federal Reserve System formulates monetary policies, serves as a bank regulator, administers certain consumer protection laws, and is a fiscal agent for the U.S. government, according to its website.
 
In its public notice — published in Samoa News since December regarding the closing of the local branches — BoH says that members of the public wishing to comment on the closure can send mail to the Federal Reserve Bank of San Francisco.
 
“While the Federal Reserve does not have the authority to approve or prevent the closing of bank branches, it may assist in the exploration of alternative facilities and services for the affected area,” the notice states.
 
There was no immediate reply from the Federal Reserve Bank’s media office to Samoa News request for comments to the ASG letter signed by Lemanu, nor did it give indication of the type of assistance it can offer American Samoa.
 
The governor has already thrown his support behind a group of residents and business people who are forming the Community Bank of Amerika Samoa. The bank is “In Organization” designated by “IO”, while seeking federal approval.
 
UTAH  MEETINGS
 
In the media statement, Lolo said he met Wednesday in Salt Lake City, Utah with Zions Bank chief executive officer and president A. Scott Anderson to explore the bank’s interest in  extending its banking services to American Samoa, in view of the pending BoH departure.
 
The media statement didn’t elaborate on the outcome of the meeting with Zions Bank, which was first established in 1873 and operates more than 500 offices in ten western states including Utah, Arizona and California.
 
“Our meeting with Mr. Anderson was one of several... while laying over for 24 hours in Salt Lake City. Along with Mr. Anderson, members of my staff and I met with past and present officials of the Federal Reserve Bank to discuss our request to the Federal Reserve for assistance,” he said.
 
The governor and his staff also had meetings with senior staff representing Utah, including Utah Senators Orrin Hatch and Mike Lee, and Congressman Craig Stewart, for the same purpose.
 
Lolo noted that the meeting participants uniformly expressed their concern about the negative impact Bank of Hawaii’s leaving will have on the availability of financial services in the territory. Also mentioned by the governor was the fact that “BoH’s departure sends a terrible message to potential investors when the only American-owned bank in the territory, one that has been there for almost forty years, wants to leave.”
 
“This could not have come at a worse time as we try to turn around our economic development efforts. I know we’re a low to moderate income community, and maybe that’s why they want to leave, but I still take offense that BoH, after 40 profitable years, wants to leave us hanging on a short three month’s notice,” said Lolo.
 
CONCLUSION
 
After the meetings with Federal officials and private sector leaders, Lolo “indicated he is contemplating the idea of declaring a state of economic emergency in the territory, given the severity of the expected impact on the people of American Samoa caused by the sudden departure of BoH,” according to the governor’s media statement.
 
Lolo was joined in the meetings in Utah by ASG Treasurer Falema’o ‘Phil’ Pili; Commerce Department director Keniseli Lafaele, Executive Assistant Iulogologo Joe Pereira, Governor’s Legal Counsel Steve Watson, and John Marsh — who is a former Bank of Hawaii area manager and recent nominee to the Board of Trustees of the ASG Retirement Fund.
 
(Samoa News notes that not mentioned in the governor’s press release is that John Marsh is also a former ASPA chief financial officer, and an interim CEO of ASPA.)
 
Iulogologo told Samoa News early this week that the governor is expected to meet with BoH and other Hawai’i based banks, on the way back from the mainland, en route to the territory.
 
Last month Lolo appealed to BoH to delay for 12-months the decisions to close local operations “in order to smooth our transition into the future.” He also says that ANZ is some 12 months away from being able to offer some of the services now provided by the Bank of Hawaii to the government, businesses and people of American Samoa.