PREVIOUS REQUEST FOR THIRD BANK IN TERRITORY WAS DENIED SAY ORGANIZERS
Having a third bank in the territory has been in the talks for over two years, but the Federal Deposit Insurance Corporation (FDCI) in San Francisco denied the request, noting that the community is not big enough for three banks.
This was revealed during the House hearing regarding a Senate Joint Resolution supporting the Community Bank of Amerika Samoa's application to obtain approval to operate an FDIC insured bank in the territory. The resolution was approved in the Senate two weeks ago.
According to the resolution, having two banks in the territory would be of great benefit to local residents, businesses and other organizations as well as the economy. It takes notice that from 1979 to 2001 the Amerika Samoa bank was a locally owned and controlled bank with several of the same investors now backing Community Bank (IO) of Amerika Samoa. That bank had provided excellent service to the community and a satisfactory return to its shareholders, the resolution points out.
On Monday, the House of Representatives approved in final reading a Senate Joint Resolution , followed by a hearing conducted by Vice Speaker Talia I’aulualo Fa’afetai Chairman of the House Rules Committee. Attending the hearing were three of the founding members of the Community Bank (IO), Avamua Dave Haleck, Lewis Wolman and Robin Annesley Dalton.
Avamua informed the House members that the idea of the community bank began over two years ago. “We had thought about opening a third bank in AS, together with Bank of Hawaii and the ANZ, and when we shared this idea with the FDIC in San Francisco, we were flatly told ‘no way’.
“The community is not enough for three banks, it’s only enough for two banks, they said.”
"With this idea we backed off a little bit and we approached bank of Hawaii to discuss with them what the possibility was, and if they were interested leaving the island,” said Avamua. However, this was before BoH announced they were leaving the territory.
He said they were referred to an agency in San Francisco to discuss this issue but those negotiations did not materialize. Following that, BoH decided to announce their departure from AS and "this is where we are today."
He noted that BoH’s delay in departing the territory until March 2014 is a good thing, as this will allow the Community Bank time to file their application with FDIC.
“This is a large effort and I’m very happy to say that members of the community and some individuals have come together, and put together their assets in terms of money to try and provide this extra service to our community. Obviously we cannot live with a 'one bank' situation… and the community is coming together to support this effort” said Avamua.
He noted their current goal is to raise $10 million dollars, and they are half way. He said they are continuing to work diligently to secure $10 million dollars — or close to it — and they will file their application later this month.
Avamua warned that the process can be long, and they are looking at 12 months before receiving an answer from the FDIC. He stated that they hope to be in business by the time BoH departs in March 2014.
Wolman told lawmakers that once they succeed setting up the community bank, there will be an opportunity for members of the public to buy shares in the new bank . “We will make sure everyone understands that the Community Bank will provide that opportunity and will give people the opportunity they had in 1979 to own shares in a local company, and to participate in doing business on the island, as it develops, and our children will take our places,” he said.
Annesley Dalton said the same situation exists today that existed in 1979 when her father organized the beginning of the Amerika Samoa Bank. “We needed a second bank in the community, a bank chaired by locals and a board that will be composed of locals that understand the local culture and business atmosphere, which I think many of you understand does not exist outside of AS.
“The faalavelave (family and village obligations) the churches, the type of money that is required by our people to operate in the community — having a local board will go a long way to helping develop the economy of the territory as well as the cultural development,” she said.
She noted that during the Amerika Samoa bank tenure, in which Avamua was a board member for ten years, many of the projects that the Amerika Samoa Bank funded were projects that may not necessarily have made it through in normal banking situations, but because of the particular understanding of the local board of directors, they did fund such projects, which was the success story of Amerika Samoa Bank and its history.
“So we all know that it is a positive move, and I believe the situation that exists today was identical back in 1979, and I believe that it will be a successful venture if and when it gets off the ground,” she said.
Rep. Faimealelei Anthony Allen asked as to where the remainder of the $10million will come from? He noted that it appears from Avamua’s testimony that having another bank has been in the works, and it also appears that he was aware that BoH was leaving, yet nothing was done about it.
Avamua responded when they approached BOH with their idea of having a third bank in the territory late in 2010 and early 2011, “we were told that having a third bank in the territory would be unsuccessful” and they backed off. However they were also surprised to hear that BoH was leaving.