Small Business money to be held by Zions Bank, program administered by DOC
American Samoa’s share of just over $10 million of the federally funded State Small Business Credit Initiative (SSBCI) program has been deposited with Utah-based Zions Bank because of a U.S. Treasury requirement that SSBCI money be held by a U.S. financial institution.
Additionally, Zions Bank will continue to handle the American Samoa government payroll account and other accounts when the government owned Charter Bank is established in the territory, said ASG Treasurer Uelinitone Tonumaipe’a during a Senate Budget and Appropriations Committee hearing on Wednesday.
The hearing was the third in which members of the American Samoa Economic Development Authority were called to answer more questions from senators regarding the administration’s Charter Bank legislation, which allows ASG to set up the Territorial Bank of American Samoa — that will not be insured by the Federal Deposit Insurance Corporation (FDIC).
During the hearing, Sen. Magalei Logovi’i pointed out provisions of the bill, which say that all government accounts, without exception, are to be deposited with the Charter Bank, including ASG's semi autonomous agencies and the Retirement Fund.
Magalei said ASEDA board member, Attorney General Talauega Eleasalo Ale had testified earlier in the week that this provision of the bill refers only to “operation accounts” of all government entities.
“The Retirement Fund [operating] account is at ANZ bank,” Magalei, a former Retirement Board member noted, and then asked, “wouldn’t this requirement in the bill cause complaints from ANZ — if other ASG bank accounts are transferred to the charter bank?”
Talauega responded, that he believes ANZ would not be happy with the decision, but these funds deposited with ANZ are government money which can be transferred to another bank, if ASG wishes.
He said that this would be the same if the money held by ANZ belonged to a private individual or business, who can deposit their money at whichever financial institution they prefer. “So the government can transfer accounts or money to their preferred bank,” he said.
Based on this “without exception” provision of the bill, Magalei asked if the government will transfer its payroll account out of Zions Bank to the Charter Bank, when it is up and running.
Tonumaipea explained that Zions currently handles only direct deposits, while Bank of Hawaii still handles papers checks — a role that will be taken over by the Charter Bank, once it’s set up — and Zions will continue with direct-deposits.
Additionally there are other ASG accounts with Zions Bank, he said.
For example ASG was directed by the U.S. Treasury to transfer SSBCI money — which was with ANZ — to Zions Bank, because ANZ is not a US owned financial institution. “We were required to put this money in a U.S. bank,” he said.
(Amerika Samoa Bank is a branch of ANZ Guam, Inc., which is a subsidiary of the Australia New Zealand Banking Group Limited.)
Magalei then asked if the SSBCI money will be transferred to the charter bank, to which Tonumaipea first pointed out that Zions is “our correspondent bank” and SSBCI account can still be maintained by Zions.
The SSBCI aims to increase credit availability for small businesses, and the U.S. Treasury has already approved the local American Samoa Venture Fund (ASVF) to operate the SSBCI.
It is being administered locally by the Commerce Department, which has started accepting applications for the program.
At last week’s cabinet meeting, Lolo told directors that the local Treasury Department started out as administrator of the SSBCI but the U.S. Treasury recommended another agency to administer the program, as well as hiring outside consultants.
Therefore, he said, his administration opted for Commerce Department, which is in line with the department’s administrative purview of economic development.
The ASVF’s investment priorities are in the following industries: Healthcare/Medical; Air and Sea transportation; Fisheries; Agricultural; Eco-tourism; and Manufacturing. Application information can be obtain from DOC office at the A.P Lutali Executive Office Building in Utulei or online: www.doc.as.gov