Community Bank (IO) to file FDIC app this month
The Community Bank of Amerika Samoa (IO) has emphasized that it will take time for the locally owned and organized financial institution to obtain the necessary federal regulatory approval before opening its doors, and the official application will be filed this month with the Federal Deposit Insurance Corporation (FDIC).
The bank’s president and CEO Gary Ayre told reporters Tuesday that they had hoped it would take nine to 12 months before Bank of Hawai’i shut down local operations, but that does not appear to be the case.
“We are doing what we can in the meantime to make that process as smooth as possible,” he said, noting that Community Bank (IO) has received support from Gov. Lolo Matalasi Moliga and Congressman Faleomavaega Eni. A resolution is expected to be introduced in the Fono next week.
Faleomavaega’s support was outlined in a Mar. 1 letter to the FDIC saying that BoH’s closure will leave the territory with only one bank and this will have a significant impact on American Samoa’s economy.
“It is critical to have another bank in American Samoa in order to create a competitive market that would provide consumers in a low-income community with affordable banking, provide access to capital for small businesses, attract investment opportunities and provide necessary services,” he wrote, adding “I know that the Community Bank (IO) will be in full compliance with the laws and regulations” of FDIC.
Lolo in a Jan. 29 three-page letter to the FDIC also relayed his support, after receiving a visit from Community Bank officials on Jan. 18 about their plans, including the bank’s move to seek FDIC approval, which is necessary to open a U.S. charted bank.
The governor emphasized to FDIC the need for a second bank in the territory, saying that he supports the prospect of having a local bank directed by local business people to help consumers and businesses build a better future.
“My administration welcomes close scrutiny of the FDIC application of Community Bank,” he wrote. “If we are satisfied that the bank has a sound foundation and business plan, we will provide a local license and consider utilizing the bank for a variety of government banking needs.”
Also supporting Community Bank (IO) is former U.S. Department of Interior deputy assistant secretary David B. Cohen, who informed the FDIC last month that American Samoa “is struggling like few other places in the U.S.” He said the tuna canning industry in the territory has downsized drastically in recent years and the territory already had the lowest per capita income of any state or territory in the U.S., before the tuna industry decline.
“That decline has exacerbated American Samoa’s economic misery even further,” he said and pointed out that BoH’s departure will make things worse, leaving only one commercial bank, which is “foreign owned”.
“American Samoa cannot hope to get back on its feet economically if it continues to be so grossly underserved in terms of credit,” he pointed out. “Because of its small population and small economy, it would be difficult for the territory to attract another established commercial bank to take Bank of Hawai’i’s place.”
During Tuesday’s news conference, Ayre stressed that the Community Bank (IO) is an American Samoan bank, it will be owned by American Samoans and it will be run by American Samoans. He said this is the first time this has happened since 1979 when the original Amerika Samoa Bank was established.
He also said that the bank officials met with FDIC and “they’ve given us some good guidance on how to proceed. We will be launching a formal application with FDIC during the course of this month, and following that up with a third meeting with the FDIC in San Francisco toward the end of this month or beginning of next month.”
He said this will be followed by yet another formal meeting with FDIC, adding that there are a number of meetings involved in the process and they have to follow the process. He said it will take a couple of months before getting the FDIC approval.
Once that approval comes through from the regulator, they will starting “formalizing equity — we’ll be formalizing policies and procedures, formalizing corresponding banking relationships with mainland banks, doing all we can to make sure we can set the bank up as quickly as possible but as properly and effectively as possible,” said Ayre, a former CEO for ANZ Amerika Samoa Bank.
“A guiding light from my perspective is to make sure that the bank is run properly and adequately. The worst thing that could happen would be to go through all the effort to set it up, and have inadequate policies and procedures in place. It should be a properly structured well-run bank,” he said and again emphasized that it will take time before getting FDIC approval.
Samoa News will report on other details of the Community Bank news conference in future editions.