Pago Pago, AMERICAN SAMOA — Further queries that were raised during a hearing on the Territorial Bank of American Samoa (TBAS) included long lines at the ATMs, the FDIC issue and the bank’s audited financials.

They were among the issues discussed when Acting CEO of TBAS, Owen Peery and Director of the Office of Financial Institutions Tuasivi John Marsh were called to the House of Representatives on Monday, October 2, 2023 to provide an update on issues at the government-owned bank. 

Faipule Tautoloitua Sauasetoa Ho-Ching asked if TBAS was looking at getting more ATMs in the Territory, and Peery disclosed that for fiscal year 2024, there are no plans to increase the number of terminals in the territory.

 “We are always looking at strategic placement and where those ATMs are located, but if we look back to the days of Bank of Hawai’i and ANZ, there were 12 combined terminals on the island, and TBAS has more than 23 terminals placed around Tutuila,” he said. 

The acting TBAS CEO told Tautoloitua that they “have essentially doubled the volume of ATMs, and that it is both a huge accomplishment and task, especially in regards to servicing the ATMs, requiring a lot of resources, manpower and that it’s quite expensive.”

 “We have one mechanism of getting cash onto the island, which requires 2 flights from the Federal Reserve to the island, and it’s a large expense that the bank needs to budget for every fiscal year.” 

Peery told Tautoloitua that the bank’s ultimate goal is to move away from cash for day-to-day activities, however they understand that cash is being utilized specifically for fa’alavelave’s and not for day-to-day purchases, “but that their the goal is to get the community to use the efficient way to pay by using their debit card for day-to-day purchases.”

Tautoloitua commended TBAS on the increase of ATMs on island, but “did note that in the heavily populated districts, there are still long lines at the ATMs, and that he wanted to make sure that all villages have easy access to ATMs.”

He suggested that an immediate solution to long lines is adding more ATMs in the heavily populated districts.

Tautoloitua then asked for more clarification on the FDIC issue, noting that ASG will not be relinquishing their shares, he asked Peery if TBAS management was looking at other options. 

 “We do routinely look at other options and there are private options, which are not inexpensive, and at the end of the day, we have to balance what the risks are,” Peery began in his response. 

 “If we think back to 4- 5 months ago where we saw multiple bank failures across the United States, I just want to note that those were all FDIC regulated banks.

“FDIC does not mean that a bank cannot fail, because it absolutely can.

“The majority of account holders at those banks were only made whole because the U.S. government bailed the banks out,” continued Peery. 

Tautoloitua said that “it would be in the best interest of TBAS to be FDIC insured, and that our banks would fall under the categories of banks that would benefit from being bailed out by the U.S. government.”

Faipule Manumaua Wayne C. Wilson refrained from asking any questions, opting to wait until the audit reports were published and given to the Fono for their review. 

Faipule Larry Sanitoa commented on the FDIC insurance, saying, “It’s critical that TBAS is FDIC insured because they can bail out the bank if it were to fail.” Sanitoa then asked when former TBAS CEO David Buehler’s contract expires. To Peery’s understanding, Buehler’s contract expires January 7, 2024. 

 “In the absence of the report of fiscal year 2022, what is the actual equity and capital of the bank?” asked Sanitoa. 

Peery stated that the “financial position of the bank is strong,” and as of the end of FY2023, “we are projecting a surplus for the bank.”

He said he did not want to provide a specific number until the financials were audited, but did reassure that FY 2022 and FY 2023 were strong years for the bank, and that they anticipate ending the year with a surplus.

BACKGROUND

Samoa News should point out that the FDIC insures deposits in member banks up to $250,000 per account ownership category.

The FDIC — Federal Deposit Insurance Corporation — is a US government-owned corporation that supplies deposit insurance to depositors in American commercial and savings banks.

So yes, it does not stop a bank from failing, however, it does supply insurance to account holders when a bank does fail.