On March 12, the Federal Reserve Bank of San Francisco (FRBSF) hosted a public meeting at the Hilton Hawaiian Village regarding Bank of Hawaii’s (BoH) planned closure of its American Samoa branches after 44 years.
After Peter Ho (president, chairman and CEO of BoH) met with Gov. Lolo Moliga of American Samoa and Eni Faleomavaega, the non-voting U.S. congressman from the territory, he agreed to a delay of 12 months instead of the 90 days he had originally announced.
Eni listed many difficulties American Samoans would face if BoH were to leave after the previous 90-day extension:
“Transferring money from the U.S. mainland could take up to three weeks . . . Because the American Samoa government (ASG) uses Bank of Hawaii to process payroll, this may have a negative consequence for ASG employees. Many families residing in Hawaii, especially those who serve in the military, will no longer be able to easily share remittances with family in American Samoa.”
According to Tracy Basinger of the FRBSF, Federal Reserve Banks “have no power to delay or prevent” a member bank from closing its regional branches.
John Taylor, president and CEO of the National Community Reinvestment Corporation, disagrees. “They have the power to intervene in the market to prevent negative effects on public interest, and these actions would create a monopoly in American Samoa,” he said.
One solution discussed is the creation of Community Bank, a new American Samoa bank. But Dave Haleck, the interim chairman of Community Bank of Amerika Samoa, said it would take until early 2014 to provide a full range of services. Establishing a local credit union was also a proposed.
The problem with both solutions is attracting banks and other institutions to invest in the American Samoa economy, which has been depressed since the 2009 earthquake and tsunami and the closing of one of American Samoa’s main tuna canneries.