One year later, TBAS still doesn't have a routing number
While the Territorial Bank of American Samoa awaits federal approval of its routing number, TBAS continues to carry out operations, including “active car activities”, in which the bank has taken over car loan portfolios from local car dealers.
This is according to Utu Abe Malae, chairman of the ASG’s Territorial Bancorp Holding Company board, the governing body of TBAS, when he appeared yesterday before a Senate committee hearing on issues regarding the American Samoa Power Authority, where he serves as executive director.
Yesterday marked the one-year anniversary since TBAS was officially launched and opened its doors for business and since then, TBAS officials have been working diligently to secure a routing number, which is needed for among other things, to issue checking accounts for bank customers.
During the committee hearing, Sen. Tuaolo Manaia Fruean inquired on the status of the routing number, to which Utu said TBAS is still waiting for it, adding that they are working on other ways to secure the routing number.
When asked after the hearing for clarification, Utu told Samoa News that “there is a turnover of federal officials in Washington, D.C. and we are working with those people now.”
At the Senate hearing, Tuaolo asked if the feds have recommended that the government not be involved in a commercial bank, to which Utu said, that’s one of the recommendations, for the government to reduce its involvement but it's not in writing.
Utu explained that the bank’s plan at this point is that in three-years — if the routing number is received now — the bank is turned over to operate in the private sector, like a community bank and the government steps away, although the government will still have shares in the bank but “not controlling shares”.
Responding to other inquiries from Tuaolo, Utu explained that there are “active loan activities.” For example, car loans such as those with ASCO Motors and Samoa Motors have been taken over by TBAS, despite not having a routing number.
In response to a question from Tuaolo, if the bank is operating at a loss, Utu said “yes”, adding that the bank is looking to “operate at a loss” during the first two years of operations, but improve thereafter.
When asked for further clarification about TBAS purchasing loan portfolios, Utu replied “Yes, the bank has purchased car loan portfolios from Samoa Motors and others [and] the automobile dealers were happy to sell them to TBAS.”
“You see, the automobile dealers prefer to sell the cars and not act as the bank for the car buyers,” he continued.
Car dealers like ASCO Motors and Samoa Motors have had their own in-house financing for some time now, to help customers purchase vehicles. Over the past several months, customers have reported having problems meeting the strict requirements set by the local commercial banks to get a car loan.
Tuaolo called for support of TBAS and asked about ASPA to which Utu said, he along with ASPA personnel have accounts at TBAS, but issuance of checks cannot be done until a routing number is secured.