TBAS routing number depends on Fono approval of amendments
Gov. Lolo Matalasi Moliga is hopeful for an expedited Fono approval of proposed amendments to local statute, which established the Territorial Bank of American Samoa, that would allow the government-owned commercial bank to obtain a long awaited routing number.
If the Fono takes swift action, Lolo predicts the routing number to be received by the end of next month or early next year from the Federal Reserve, which would also be sent the approved amendments.
Samoa News understands from industry sources that not only does TBAS need to get a routing number — needed to expand its banking service, in areas such as checks and online transactions — the bank is also required to set up an account with the Federal Reserve.
Lolo returned last Friday night following several meetings in the US and during Wednesday’s cabinet meeting, he provided a summary verbal report on two of those meetings including the one held in Salt Lake City, Utah where the ASG delegation met with Utah Gov. Gary Herbert and other state officials.
Lolo and his delegation, on a separate occasion, met with Federal Reserve Board vice chairman Randy Quarles, who was recently confirmed by the US Congress. Also at the meeting was Congresswoman Aumua Amata.
During the cabinet meeting, Lolo said the meeting with Utah officials was an effort to move TBAS forward by expanding its banking services and this was also the same reason for the meeting with Quarles, who has only held the post for three-weeks after receiving Congressional confirmation.
He said it was only appropriate that the meeting was held in Salt Lake City, which is where the idea of a charter bank for American Samoa was born.
Lolo described the meeting with Quarles as uplifting and good, adding that the vice chair was close to telling them that the ASG delegation can take home with them the TBAS routing number; however, he said there are some weakness in the current TBAS statute that need to be addressed first.
“We learned many things at that meeting” Lolo said, adding that because American Samoa is considered under federal law as an unincorporated and unorganized territory, it is separated from states and other territories when it comes to federal banking laws.
He explained, "Federal banking laws established for states and other territories, with a different political union with the US, do not include American Samoa because of the different type of financial operations when it comes to TBAS, which is a charter bank, mirrored after a similar bank in North Dakota — the only current charter bank in the nation.”
Lolo said the proposed amendment to local statute being sent to the Fono for review and hopefully passage, during the special session that opens next Monday, will address these issues discussed with the Federal Reserve.
The governor didn’t provide specific details of those issues; but he did say that once the proposed amendments are approved, they will be sent to the Federal Reserve Board, which would then make a decision on the TBAS routing number.
According to Lolo, the Federal Reserve now has a better understanding of what TBAS is all about, adding that the previous federal administration didn’t have time to fully review TBAS's request and identify weaknesses in local statutes that need to be amended.
Lolo is hopeful for expedited passage of the proposed amendment by the Fono and if all goes as planned, he believes the routing number will be issued either by the end of December or beginning of January.
He said the feds have been made aware that the government stepped in to set up a bank, not because it wants to get into the banking business, but to help the public and the business community.
According to Lolo, the feds were also informed that about 50% to 60% of the money generated locally goes off island, and this is based on a report from the ASG Office of Financial Institution, which is headed by Commissioner Robert Ho Chee.
Lolo estimates — based on the OFI report — that more than $100 million goes off island, but the governor didn’t clarify if the estimate is based on a yearly basis, and if he is referring to payment of goods & services purchased off-island, including remittances sent to ‘family’ off-island.
Also based on the OFI report, according to Lolo, not less than $10 million goes out of American Samoa to countries like China, Philippines, Samoa, Australia and New Zealand. The money should have stayed in American Samoa, said Lolo, adding that the feds want to also do business with a US based financial institution.
Those who accompanied Lolo to the meetings in Utah were Ho Chee, Commerce Department director Keniseli Lafaele and TBAS president, Philip Ware.
Samoa News notes that the Senate has requested several times for the government to provide a report from OFI on how much money goes to foreign countries on a yearly basis.