Pago Pago, AMERICAN SAMOA — To comply with federal requirements where federal funds awarded to American Samoa are required to be deposited in a federally insured financial institution, the Lemanu-Talauega Administration is proposing to amend local law, pertaining to government deposits currently required to be made into the Territorial Bank of American Samoa (TBAS).

Local law requires, without exception, that all government funds and deposits, including those earned or received by ASG semi-autonomous agencies such as the American Samoa Power Authority, American Samoa Community College and American Samoa Telecommunications authority —  be deposited and maintained at the government owned TBAS.

However, the “federal government requires that certain award funds received by the American Samoa government and its semi-autonomous agencies must be deposited in accounts insured” by the Federal Deposit Insurance Corporation (FDIC), according to the bill’s preamble.

It also says that the FDIC has indicated that under its statutory and regulatory rules, it is unable to insure the accounts at TBAS.

Furthermore, ASG and its semi-autonomous agencies are unable to comply with the federal rules, without amending a provision of local law on deposits with TBAS.

It’s well-known in the community that TBAS, currently the only bank in the territory, is not federally insured by FDIC.

The provision of the law the bill seeks to amend in order to comply with federal regulation is titled, “American Samoa Government Funds and Income of the Bank”. 

The amendment proposed by the bill adds this change (in quotation): “unless otherwise specifically prohibited by federal statute or regulation or as directed by order of the courts of this and any other state or territory, or of the United States,” — all  government funds and deposits — including those earned or received by semi-autonomous agencies, shall be deposited with and maintained at the TBAS.

The bill was introduced last week in the Senate and assigned to the appropriate committee for a hearing this week. It’s expected to be introduced in the House in the coming days.

Samoa News understands that ASG currently uses accounts at Zions Bank, a FDIC member based in Utah to comply with the federal requirement if necessary to deposit federal funds in a bank federally insured by FDIC.