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Fono moves forward with amendments to TBAS statute

Rendering of the proposed new Fono Building. [SN file photo]

Both the Senate and House are expediting passage of an Administration bill that seeks to amend the Territorial Bank of American Samoa statute by deleting several provisions of the law pertaining to the bank’s “Holding Company: — Territorial Bancorp Holding Company."

The measure was introduced yesterday in both chambers and assigned to the appropriate committees for review. In the House, a discussion amongst faipule was held after their session yesterday, with the decision to report the measure today to the floor for second reading.

In the Senate, the legislation was assigned to the Senate Budget and Appropriations Committee, whose vice-chair Sen. Tuaolo Manaia Fruean moved to have the bill presented to the floor today for second reading.

Tuaolo recalled Gov. Lolo Matalasi Moliga’s address Monday to the joint session of the Fono, regarding the importance of amending current TBAS law by removing “Holding Company” thus, paving the way for TBAS to get its routing number from the Federal Reserve. (See yesterday’s Samoa News for details).

Tuaolo said the governor gave a thorough explanation regarding the amendments to the law, and added that he spoke to the Bank’s consultant, who also provided identical information on why the law needs to be amended.

Therefore, to save time, Tuaolo moved for the bill to go through second reading today, unless there is a need to call a committee hearing for witnesses to testify.

Sens. Fai’ivae Iuli Godinet and Tuiagamoa Tavai both agreed with Tuaolo, although Fai’ivae said he is seeking additional clarification on certain provisions of the proposed amendments.

Senate President Pro Tempore, Nuanuaolefeagaiga Saoluaga Nua, who led yesterday’s Senate session, called a brief recess for a discussion, during which Senate legal counsel Mitzie Jessop-Ta’ase was called in to help clarify any issues for senators.

Jessop-Ta’ase gave a quick explanation in response to Fai’ivae’s question, pertaining to current provision of the law, dealing with the establishment of the Holding Company, its role, functions, and responsibilities. This entire section of the law is proposed to be removed.

She explained that “Holding Company” is for private commercial banks, and the holding company is responsible for many issues such as securing assets for a bank. But in TBAS's case, its assets are owned by ASG, she said. 

Two other senators spoke during the meeting. Tuaolo reminded senators that TBAS “is our bank”, which was established with $10 million in proceeds from the bond sale. TBAS cannot move forward, without the consent of the Senate in amending current law, he said, referring to the “Holding Company”.

When the session resumed, senators agreed to move the bill forward with second reading today, and third reading tomorrow.

Besides removing all provisions pertaining to the Holding Company, the bill also makes technical amendments, including the 7-member governing board becoming the TBAS board of directors.

Another proposed amendment clarifies that the “CEO and the management team are responsible for the management” of TBAS.

According to the Lolo Administration, TBAS is yet to secure transit and routing numbers allowing it to provide on-line or electronic banking services, in part, due to objections by the Federal Reserve Board of Governors.

Based on information from the Federal Reserve Board, the amendments to the TBAS statute resulting in the dissolution of the Territorial Bancorp Holding Company “are required to facilitate approval of a master account for TBAS with the Federal Reserve Bank,” according to the bill’s preamble.