“….placing all of our government’s deposits of about $30 million — including ASPA, LBJ, ASTCA, Am. Samoa Community College, and the Retirement Fund Operating accounts in an uninsured financial institution is a major risk and troubling,” says Tualauta faipule Larry Sanitoa who was the only lawmaker to vote “No” on the Administration’s Charter Bank bill that was approved in final reading in the House on Friday.

The House version of the Territorial Bank of American Samoa, or TBAS, which will serve as the government’s bank as well as accept deposits from and make loans to the community at large, will now go to the Senate for their approval with amendments made by House members.

Sanitoa, who’s Chairman of the Economic Development Committee told Samoa News that while he understands the legislative process and certainly respects his colleagues’ decision, it is his belief that there is still a need for them to do their due diligence, with a comprehensive review of  this very important and critical legislation.

“I commend and applaud Governor Lolo and the administration for taking a courageous move to address the banking problems facing our Territory since Bank of Hawaii announced their intention to cease doing business on island some two years ago.”

“Having said that, the proposed legislation by the administration has great merits and benefits for our government, our economic development and more importantly to our people, however, the fact is, it also brings great risk to our government finances if we would default on the repayment of the $10 million bonds.”

Sanitoa pointed out that “placing all of our government’s deposits of about $30 million including ASPA, LBJ, ASTCA, Am. Samoa Community College, and the Retirement Fund Operating accounts in an uninsured financial institution is a major risk, and troubling.”

According to the bill, the bank’s CEO will not receive any additional compensation for being a board member, except for his annual salary. The other board members are to receive $5,000 per year, while the chairman gets $6,000 a year. The bill makes clear that each board member — before taking office and at the end of each fiscal year — must file with the bank a personal financial statement, which among other things discloses any financial interests that the board member or his or her immediate family (spouses and children) have in any business entity that is a customer of the bank.

However, there were amendments made to the bill by House members wherein the Territorial Bank board of directors shall consist of seven voting members and the bank CEO  shall serve in an ex-officio capacity and shall not have voting rights. “The voting members shall include the Lieutenant Governor, the American Samoa Treasurer, the Director of the Department of Commerce and four At-Large members to be nominated by the governor and confirmed by the Legislature.”

During the House session last week Friday, when the measure was read in final reading, Sanitoa was the only lawmaker who voted “no” and following the vote on the Charter Bank bill, House Speaker Savali Talavou Ale reminded Sanitoa that the work by his committee was not done, as there was another pending bill related to the Charter Bank bill. That bill would create the Office of Finance Services — to be administered by a Commissioner, who is appointed by the governor — within the Treasury Department. (The Senate version of the OFS bill is still in committee. See elsewhere in today’s issue.)

  Provisions of the proposed bill identify what the Office of Finance Services has the authority to regulate: all financial institutions that operate or conduct business in the territory — private and government owned— and not only banks.

GOVERNMENT AND THE CHARTER BANK

At the cabinet meeting last week, Governor Lolo Matalasi Moliga stated that upon his return from his trip to Washington DC, he will be meeting with Bank of Hawaii officials regarding their services. He told the directors that they need to communicate with their lawmakers to support the passage of the Charter Bank bills, because it appears that there are some who are trying to delay the passage of this important legislation.

Lolo explained that he met with the leaders of the Community Bank last week and he was informed that they have withdrawn their application with the Federal Depository Insurance Corporation as recommended by FDIC. He added that ASG has supported the efforts made by this bank since the beginning, and the government depended on said bank, however in the end, nothing has happened.

The governor said that the government then had to come up with a solution, hence the establishment of the Charter Bank.

“These efforts are not for you and me, rather for the common people who stand in line, those who cannot get a loan and those who cannot get a savings account. I told the Fono leaders if there is another way that the Fono and the public can help with the bank problems, then inform him, but don’t find a way to delay the process,” Lolo said.

Samoa News should point out that officials of the Community Bank were reported to  propose to the governor in a letter that the government charter bank work in tangent with them, as there is no room for three banks in the territory. There was no mention that their FDIC application had been withdrawn, but only said that the government’s move for a Charter Bank had stymied their own efforts, causing concern with the FDIC.

Also last week, Treasurer Ueligatone Tonumaipe’a said during his appearance before the House for the Charter Bank hearing that the Zions Bank would “only support the government bank, they will not support any other bank, and if we try to change that, then Zions Bank will not be our correspondence bank, they are only here to help American Samoa (Government)… only the American Samoa (Government). Once we involve the private sector they (Zions) will pull out, because the private sector — all they want is profit — but the government’s vision behind this bank is to help out the public.”

HOUSE SPEAKER & HAND SLAMMING

Also during the House session last Friday, Savali rebuked reports by Samoa News that he had slammed his hand on the desk, while demanding that Sanitoa report the bill with changes.

Savali stated during the session that his hand “fell on the desk” which caused a loud bang that came off as if he had slammed his hand on the desk.

He says the newspaper report was not true, and admonished the media to report what is accurate as sometimes “something happens” — however when it’s reported it is different from what occurred.

Samoa News reported on Friday that Savali had stormed out of the House chamber during a committee hearing, after he slammed his hand on the desk and accused Sanitoa of purposely delaying the administration bill for the Charter Bank to be reported into session for the lawmakers to act upon, as the House needs to act on this measure right away.