The bombshell dropped yesterday by House Speaker Savali Talavou Ale that Bank of Hawai’i will be leaving the territory at the end of June this year sparked a flurry of comments and questions from lawmakers. The Speaker’s announcement came as chairman of the House Commerce Committee, Larry Sanitoa was scheduling a hearing following the introduction of a bill allowing the establishment of a government owned Charter Bank.

Samoa News has left messages for the Speaker asking for him to clarify the source of his information, but efforts were unsuccessful as of press time.

As Sanitoa announced plans for a hearing on the Charter Bank, Tualauta faipule, Vui Florence Saulo pointed out that BoH officials should be questioned about the exact date they plan to close down business. And that’s when they got the stunning news.

“They have been working with the community for so long and yet they are just going to up and leave,” she asked? Vui also pointed out that the lawmakers need to hear BoH’s plans as the public is still in the dark as to when the bank is leaving. The Tualauta faipule further noted that this has a huge affect on the local businesses.

Vui’s comments was supported by Manu’a faipule Vesi Talalelei Fautanu Jr who also noted that BoH officials should give an update as to the status of their services for the people.

Savali pointed out to the lawmakers that Governor Lolo Matalasi Moliga and his administration have worked tirelessly, turning over every rock seeking ways to persuade BoH to remain in the territory, however, they have been unsuccessful and as a result the administration is now in the process of establishing a Charter bank.

Vui replied that while she supports Lolo and Lemanu’s move for a new bank, however all she’s seeking are answers from BoH.

She said it’s going to take time for the Charter bank to be set up and businesses will be affected tremendously once BoH leaves.

CHARTER BANK HEARING

During the House Regular Session yesterday, Sanitoa scheduled a hearing for the Charter Bank measure, calling on the Attorney General, Talauega Eleasalo Ale, Treasurer Uiligatone Tonimaipe’a and Governor’s Legal Counsel Steve Watson as witnesses to answer lawmakers’ questioned.

Sanitoa also pointed out yesterday that he has already requested a projected revenue and expenditures report from the Executive Branch and their five-year financial statement on the projected revenue and expenditures for the bank. The Chairman informed the lawmakers that word he received says there is no five-year plan, rather there is a three-year plan. Sanitoa stated that he’s already requested the Fono’s legal team to submit a summary analysis on the pros and cons of this bill.

Given the requested reports, Sanitoa said he has scheduled the hearing for next month, February 3, 2015. The House Speaker, however, told Sanitoa the need to re-schedule for an earlier hearing in this relatively important piece of legislation as it’s been sitting in the House for some time and lawmakers should act on it sooner rather than later.

According to provisions of the bill, all American Samoa government funds and deposits will be handled by the bank, which will be called the Territorial Bank of American Samoa. Additionally, it will be operated and managed by an ASG holding company called Territorial Bankcorp.

The measure identifies each semi autonomous ASG entity — including the ASG Employees Retirement Fund and the Feleti Barstow Library — and makes clear that all these government entities are required to have their funds and deposits handled by TBAS.

However, it says that any revenues earned from handling these accounts remain with the bank, which will get $10 million as start-up seed money, coming from a bond issued under the American Samoa Economic Development Authority. (See Samoa News edition Jan.15 for other information about the bank.)

BACKGROUND

Last year February, BoH’s president and CEO, Peter Ho told Samoa News that they would not leave the territory until they are comfortable that the depository needs of the territory can be appropriately accommodated. The Lolo Administration, supported by the private sector, lawmakers and Congressman Faleomavaega Eni, wanted BoH to remain open until another bank is chartered and authorized to operate in the territory.

A BoH closing would leave only ANZ Amerika Samoa Bank to serve the banking needs of the territory. The only other financial institution on the horizon for American Samoa is the locally owned Community Bank of American Samoa (IC), which has already applied for a federal charter and is currently awaiting approval. The bank announced last September that about 50 founding investors have expressed interest in investing $8 million in the bank. And the founding investors either live in American Samoa or operate businesses in the territory. The bank is awaiting FDIC approval to proceed.