Eni seeks to amend Reg CC to include territories

21-day hold on checks issued by US chartered banks a “serious burden” to residents

Congressman Faleomavaega Eni is seeking the support of his Congressional colleagues from Guam and the Commonwealth of the Northern Mariana Islands, as co-sponsors of new legislation he plans to introduce soon that will prevent a 21-day delay in cashing checks issued by U.S. chartered banks.
“This issue of 21-day delay also effects Guam and CNMI so I have requested the support from Guam Congresswoman Madeleine Bordallo and CNMI Congressman Gregorio Camacho Sablan, as co-sponsors of this important measure that I plan to introduce in the U.S. House,” said Faleomavaega via telephone yesterday morning from Washington D.C.
Samoa News, last month, during the community uproar as the Bank of Hawai’i March 15 closing date loomed closer, informed the Congressman that the Expedited Funds Availability Act enacted in 1987 by the U.S. Congress that standardizes hold periods on deposits made to commercial banks and regulates institutions' use of deposit holds does not apply to American Samoa, Guam and CNMI. Therefore, the hold period for the Pacific territories is 21 business days.
(The act is also referred to as Regulation CC or Reg CC, after the Federal Reserve regulation that implements the act.)
In American Samoa, this impacts checks deposited with ANZ Amerika Samoa Bank, the local subsidiary of ANZ Guam Inc., and if BoH had closed its doors on March 15th, as planned, would have left ANZ ASB as the only bank in the territory. ANZ ASB’s off-island check policy, according to the bank officials, is that any checks written on an off-island account are held for 21 days.
BoH has since announced it will not be closing its doors until March of next year, and checks written on a local BoH branch account are currently still being accepted as ‘on island’ checks by ANZ ASB, and as such are only subject to a 4- 5 business day hold.
Samoa News asked Faleomavaega as to why the Reg CC, an important consumer protection act, does not apply to the territories; and how did he plan to address this matter.
In a news release, the Congressman confirmed that he would introduce legislation that will include the three territories in this federal law. He also provided background information, saying that in 1987, former U.S. Rep. Fernand St. Germain of Rhode Island introduced H.R. 27, known as the Competitive Equality Banking Act of 1987. This legislation was passed by the Congress and later signed into law by President Ronald Reagan. 
Regulation CC was listed as Title VI under H.R. 27, which excluded American Samoa, Guam, and the Northern Mariana Islands from the definitions of “State” and “United States.”
Banks in these territories were deemed “Pacific Island banks,” and checks drawn on Pacific Island banks were thereafter called “Pacific Island checks, he explained.
“A crucial distinction between State banks and checks and Pacific Island banks and checks lies in the ‘hold time’ permitted by Regulation CC,” he said.
For example, banks can hold Pacific Island checks up to 21 days before releasing funds for access or use. Another distinction permits a delay in the return of Pacific Island checks that are overdrawn. However, State checks that are overdrawn must be returned “in an expeditious manner.”
“It is important that all banks in American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands are able to treat local customers with the same services that are offered in the rest of the states and other territories,” he said.
In 1995, Faleomavega introduced H.R. 1800, a bill that would amend Regulation CC to include Guam and American Samoa. The bill was referred to the House Committee on Banking and Financial Services, but no action was taken.
“Given ANZ’s 21-business day deposit policy, I feel that it is necessary that all banks in American Samoa and the other territories should be expected to offer the same level of services as do the banks in Hawai’i or California,” he said.
“This will allow local customers to access their money much sooner rather than waiting for almost a whole month after a deposit. This is a serious burden to the consumer especially when they need access to funds to pay their bills,” he pointed out.
Faleomavaega plans to work closely with Chairman Jeb Hensarling and Ranking Member Maxine Waters of the House Committee on Financial Services to ensure that American Samoa and the other territories are included in Regulation CC.
“I will keep our people abreast on the progress of this legislation,” he said and thanked Samoa News for bringing this issue to his attention.
Samoa News reporter Fili Sagapolutele contributed to this report.


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