Fed Reserve public meeting first to hear of BoH delay
The majority of people who testified at yesterday’s public meeting here and in Honolulu urged Bank of Hawai’i to further delay its planned closure of local operations until a suitable U.S. bank takes over banking needs of American Samoa residents.
The Federal Reserve Bank of San Francisco called the public meeting after receiving a certain number of comments about the BoH move to fully shutdown its local operations and Federal Reserve official Tracy Basinger emphasized at the outset of the meeting that closure of bank branches “doe not require regulatory approval.”
It was then revealed by Lolo in the public meeting that BoH has agreed to a 12-month delay in fully closing down operations in American Samoa. The Utulei branch will remain open for one-year while the Tafuna branch will close by the end of this week, as initially scheduled. (See separate story printed elsewhere in today’s edition).
While the public meeting was hosted from Honolulu, some 20 local residents participated via teleconference at Sadie’s By the Sea. Several BoH officials attended the meeting both here and in Honolulu.
The first public testimony came from Avamua Dave Haleck, the interim board chairman of the Community Bank of Amerika Samoa (IO), the newly formed local financial institution that will be filing an application with the federal government for regulatory approval.
Community Bank (IO) “recommends” that BoH “maintain operations” in the territory until Community Bank “receives approvals to establish operation and open its doors,” said Avamua, adding that such extension until Community Bank opens “is in the best interest of the community, including the private sector, the government and of course consumers and Samoans off-island.”
“Such extension will ensure minimal disruption of banking arrangements for consumers, business and government, especially in light of Community Bank’s relationship with Zions Bank,” he said. “An extension will give Community Bank an opportunity to provide continuity of employment for the core of Bank of Hawai’i’s 30-person local workforce...”
And if BoH stays open until Community Bank is ready to open, “we would negotiate with the American Samoa Government concerning purchase and leasing of various bank-related assets, including BoH premises in Utulei and Tafuna, executive housing, bank furniture, fixtures and equipment,” he said.
Also testifying from here was local business man James L. McGuire, who requested BoH to delay its departure allowing for a smoother transition of local customers into banking services, especially those services not available in the territory.
“The bottom line is there needs to be more time,” he said and pointed out that maybe in the future someone in the banking industry should find out the real reason BoH decided after four decades to leave the territory.
Lena Seumanutafa, another local resident, said in her testimony that this issue of BoH leaving is “personal” to her and many residents of the territory. She describes BoH’s decision to leave after 44 years, like a mother “abandoning a child”. Additionally, she felt this was a “thoughtless decision” by BoH to leave the territory, and added that “we deserve better” treatment.
Among the testimonies presented in Honolulu was that of Rev. Samuel Domingo, president of the Oahu chapter of the non-profit group, Faith Action for Community Equity (FACE), whose members across Hawai’i have come out to support the territory’s concerns with BoH’s departure.
Domingo said FACE is very concerned about BoH choosing to leave American Samoa and the news of the bank’s departure “stunned many of us". He said there are still a lot of questions swirling around the bank’s closure.
“How wonderful it is, that we have this wonderful relationship [BoH and American Samoa] …and service for over four decades, and now we find ourselves on the verge of divorce,” he said. He said FACE is concerned the impact on people’s lives as well as businesses.
“Bank of Hawai’i’s withdrawal will mean an abrupt loss of services. It will expose the people and businesses to predators” waiting to take advantage of the crisis — for example, high fees going unchallenged, he said.
He acknowledged that BoH has extended its stay for 12 months, but “many people will go home and not worry about what is happening in our community.”
However, “our organization continues to feel strongly about following this thing all the way through. We want to make sure that we will be there to make sure that the transition goes well and goes well for the people of American Samoa and for the people of American Samoan ancestry in Hawai’i,” he said. “We continue to call on Bank of Hawaii to do the right thing. To continue to work with the government of American Samoa so there will be a smooth transition. The people and businesses deserve it.”
Rev. Piula Alailima, another one who testified in Honolulu, said BoH’s “rush decision” to leave American Samoa “was a betrayal of trust” that the community had in the bank for all these many years. He also said that BoH “has shown some level of loyalty” to American Samoa with the extension of its stay.
Renee Leotele Togafau and Napua Amina both pointed out the hardship for Samoan families in Hawai’i sending money to their relatives in the territory upon full departure of BoH.
“Stay a little longer,” said Amina, a member of FACE who resides on the island of Maui, but flew to Honolulu yesterday morning to testify.
Testifying by phone from California was Michael McDonald, who is the vice president of American Samoa operations for the Riverside, Calif., based nonprofit group, Community Investment Corp., which is seeking to set up a community development credit union in the territory. The organization has an office at the Pago Plaza. McDonald’s testimony was to share the corporation’s longer term solution to the BoH departure.
See tomorrow's Samoa News edition regarding McDonald’s testimony as well as the rest of the statement from Avamua, and the response from the U.S. based group, National Community Reinvestment Corporation, which does not believe that a credit union or a locally formed bank can serve the banking needs of American Samoa.
FONO JOINT RESOLUTION VOICES SUPPORT FOR THE COMMUNITY BANK (IO)
In a joint resolution of the Senate and House, the Fono has voiced their support for the Community Bank of Amerika Samoa's application to obtain approval to operate an FDIC-insured bank in the territory. FDIC is the Federal Deposit Insurance Corporation.
(It should be noted that the Federal Deposit Insurance Corporation is a United States government corporation operating as an independent agency created by the Banking Act of 1933. As of January 2013, it provides deposit insurance guaranteeing the safety of a depositor's accounts in member banks up to $250,000 for each deposit ownership category in each insured bank.
According to the Senate Joint Resolution, which was approved yesterday, Bank of Hawai’i decided to cease its operations in the territory leaving ANZ-Guam as the only FDIC-insured banking institution in American Samoa, noting that ANZ will be unable to provide a variety of essential banking services that were previously provided by BoH, including the ability to process payroll for the American Samoa Government and other employers using direct deposit.
The resolution notes that having two banks in the territory would be of great benefit to local residents, businesses and other organizations as well as the economy.
The legislature has been informed that a group of local investors are seeking to obtain federal and territorial approval to open a new full service FDIC insured bank in American Samoa to be known as Community Bank of Amerika Samoa.
The legislature takes notice that from 1979 to 2001 the Amerika Samoa bank was a locally owned and controlled bank with several of the same investors now backing Community Bank (IO) of Amerika Samoa. That bank had provided excellent service to the community and a satisfactory return to its shareholders, the resolution says.
Gov. Lolo Matalasi Moliga also provided his full support for the formation of the Community Bank in his letter dated January 29, 2013 to the Federal Deposit Insurance Corporation.
The legislature therefore concludes that an American Samoa solution to the banking needs of the community would be a great asset to the community, and the Community Bank is the only known active effort to establish a new FDIC-insured bank in the territory.
“The 33rd Legislature of the Territory of American Samoa does hereby express its full support for the application of the Community Bank of Amerika Samoa as it undertakes the stringent local and federal reviews of its plans in its effort to obtain approval to operate an FDCI-insured bank in the territory.
Copies of this join resolution will be sent to Governor Lolo Matalasi Moliga, Congressman Faleomavaega Eni Hunkin, Chief Operation Officer Gary Ayre of the Community Bank and Louis Cheng of the FDIC.
See tomorrow's Samoa News edition regarding testimony presented during the public meeting held by the Federal Reserve Bank on Tuesday morning, from the U.S. based group, National Community Reinvestment Corporation, which does not believe that a credit union or a locally formed bank can serve the banking needs of American Samoa.