Chamber of Commerce tells FDIC Community Bank (IO) will be "significant asset" to AS
The local Chamber of Commerce has sent a letter of support to the U.S. Federal Deposit Insurance Corporation (FDIC) for the newly formed Community Bank of Amerika Samoa (IO), which plans to file its federal regulatory application in three weeks time.
In the letter dated yesterday to the FDIC, Chamber chairman David Robinson, on behalf of the Chamber’s board of directors, pointed out that since Bank of Hawai’i will be closing down local operations, the business organization believes that it “would be in the best interests of local residents, businesses and other organizations if there were two full service banks operating in the Territory.”
The Chamber noted that a group of local investors are seeking to obtain federal and territorial approval to open a new full service, FDIC-insured bank to be known as the Community Bank of Amerika Samoa (IO).
“The Chamber takes note that Amerika Samoa Bank, a locally-owned and locally-controlled bank with several of the same investors who are backing the Community Bank, provided excellent service to the community and satisfactory returns to its shareholders from 1979 to 2001,” he said. (This bank is now a subsidiary of the Australia- based Australia New Zealand Banking Group and is a division of ANZ Guam Inc.)
Robinson further noted that Gov. Lolo Matalasi Moliga and Congressman Faleomavaega Eni have provided their full support for the formation of the Community Bank.
“The Chamber therefore concludes that a reasonable solution to the on-going banking needs of the American Samoa community, business owners and organizations would be to establish a new, locally owned full service bank,” the Chamber chairman wrote.
“Such a bank would be a significant asset to the community and it would have a positive impact on the local economy,” he said, adding that the Chamber’s board of directors, on behalf of its membership “has resolved to provide its full support for the establishment of the Community Bank as it undertakes stringent local and federal reviews of its plans and its efforts to obtain approval to operate an FDIC-insured bank in the Territory.”
Community Bank interim chairman Avamua Dave Haleck said in a public meeting this week, hosted by the U.S. Federal Reserve Bank of San Francisco, that Community Bank will formally submit its FDIC application in three weeks time and a five-member delegation from the bank met on Jan. 9 this year with FDIC officials in San Francisco to initiate the process of obtaining FDIC approval.
Pending federal regulatory approval, Community Bank is looking at early 2014 to open its doors. “We have observed that banks owned by off-island banking companies have historically struggled with adapting their technology and policies to accommodate the unique banking environment in American Samoa,” Avamua said.
As regards to serving the overseas Samoan population, he said Community Bank intends to have convenient internet banking, VISA or Master Card-branded debit cards, advanced merchant services, and other modern banking products and services that will enable family members on-and-off island to easily and affordably transfer funds.
For example, the bank intends to use automated check imaging so that the holding period for processing and clearing off-island checks will be approximately four working days, he said.
In making his case, Avamua argued that Community Bank already has, among other things, bank founders who reflect deep and widespread support from the local business community as well as other community sectors, and qualified executive management credited to fill the CEO, chief operation officer and chief financial officer positions.
Community Bank also has a “comprehensive plan that emphasizes local governance, local lending and a full range of modern banking services, all with a prudent framework that is fully compliant with federal requirements and banking’s best practices.
Avamua shared that the vast majority “of our capital will be raised within the territory and efforts to identify potential investors will continue during the FDIC review process; an Offering Circular should be ready for review in May and will provide for locals to purchase shares with a minimum investment of $1,000.”
A Senate Joint Resolution supporting the bank’s FDIC-application was the subject of a Senate Government Operations Committee hearing yesterday where bank officials testified about the need for the territory to have a second bank, when BoH departs next March. The officials also provided the status of the bank’s quest to set up operations.
The measure goes through third and final reading today and will then be sent to the House for their review and endorsement.
Last Friday and over the weekend, Community Bank officials and founders met extensively with two executives of Zions Bank, on island to meet with ASG about the service it can offer not only to the government but to the private sector.
Avamua told the hearing that it appears Zions Bank will be able to provide some of the critical banking services needed over the next year. Avamua will be meeting next week in Salt Lake City, Utah with Zions Bank president and CEO Scott Anderson.
According to Community Bank (IO) CEO Gary Ayre, “Community Bank (IO) and senior officials at Zions Bank are presently in discussions concerning Zions Bank serving as Community Bank (IO)’s correspondent bank after Community Bank (IO) obtains” FDIC approval.
“Officials of the two companies met Friday and discussions will continue in the coming weeks as we seek to formalize the ways in which we will work together… and establish a correspondent bank relationship once we are in operation,” said Ayre.
Avamua said over the weekend that the meeting with Anderson is expected to further deepen the ties between Community Bank (IO) and Zions Bank.
“We extend our thanks to Governor Lolo Moliga for helping us establish our friendship and business relationship with Zions Bank, one of the nation’s leading financial institutions,” he said.
Zions Bank came onto the local scene when Lolo met Utah Gov. Gary Herbert last month during the meeting of the National Governors Association in Washington DC. From there, they struck up a friendship that led to Lolo’s meeting in Salt Lake City with the Zions Bank president, as well as others in the banking industry.