TBAS offers alternative to FDIC insurance — a unique program
Pago Pago, AMERICAN SAMOA — The Territorial Bank of American Samoa has implemented a “unique program” which insures deposits made by all commercial customers and consumers at the government owned financial institution. This is according to TBAS, which noted that the program went into effect early this week.
One of the major concerns that has been raised by consumers and businesses — including lawmakers — is that TBAS is not a member of the Federal Deposit Insurance Corporation (FDIC), which insures many US banks.
Some local residents — including business owners — are therefore reluctant to deposit money with TBAS, not only because it is not FDIC insured, but there has been no other type of assurance offered to protect their money.
TBAS officials had told Samoa News in the past that they were exploring possible programs to cover customer deposits until the bank becomes a member of the FDIC — which covers the depositors of a failed FDIC-insured depository institution dollar-for-dollar, principal plus any interest accrued or due to the depositor, through the date of default, up to at least $250,000.
In a brief statement yesterday, TBAS said that beginning August 12, 2019 all commercial and consumer deposits “will participate in a unique program by which these deposits will be secured by pledged assets of the bank to a maximum of $250,000 per tax identification number.”
“This program has been established by the bank in order to provide assurances to customers who experience FDIC insurance in other banking institutions,” TBAS president and chief executive officer Drew Roberts explained yesterday.
According to TBAS, this program ensures that bank assets are specifically allocated and pledged to providing deposit coverage in the event the bank should fail. The program is only available to commercial and consumer accounts.
TBAS points out that the program is not available for any government account, nor is it available to protect any owner or owners of the bank. Roberts says TBAS will continue the program until it acquires FDIC insurance.
“We are pleased to be able to offer this as an alternative to FDIC insurance, and look forward to addressing any concerns or questions you might have,” said Roberts.