“AVAMUA RESPONDS TO SEN. LAOLAGI’S COMMENTS”
Because our name was mentioned in a story today (Friday, Sept. 16, 2016) regarding Senate President Pro Temp Senator Laolagi Savali Vaeao taking issue with Representative Larry Sanitoa’s comments on the Territorial Bank of American Samoa (TBAS), I feel compelled to respond.
First, Reference to Community Bank. The Community Bank of American Samoa (IO) (CBAS) was a community effort that involved days and months of work, many individuals, businesses and families whom were willing to invest their hard earned monies to establish CBAS.
Second, the process for gaining insurance was concluded because ASG decided that it was to their best interest to pursue TBAS and getting legislation passed by the Fono in order to complete the endeavor. The facilities detailed in CBAS application for insurance were the same that TBAS had identified for their use. With no future facilities to operate from CBAS withdrew its application for insurance. Furthermore, no opportunity was provided to CBAS to testify in the hearings that established legislation to set up TBAS.
And finally, meetings with ASEDA to allow CBAS to work with ASG under the enacted legislation to establish CBAS with private ownership using investor funds instead of bond (borrowed) funds did not arrive to a positive conclusion for CBAS.
I believe Rep. Sanitoa was not questioning the process taken to establish legislation to set up TBAS but more on the economics of using valuable resources, which will cost ASG and the people of American Samoa 13 or 14% in interest on $15 million. Five (5) years interest only will cost ASG a minimum of $5.4 million. Can we afford this?
In business, an investment must have a return to its shareholders. With a return on investment, taxes are paid for income and shareholders pay taxes on dividends.
It is true that we need a second bank but difficult, if not impossible to borrow money at a high rate of interest in order set up a business, even a Government owned business. Without a solid plan to recover from paying interest, paying rent, paying payroll, paying utilities plus all the other costs involved and come out breaking even or making a little for shareholders, the business will not survive. Shareholders in this case are the people of American Samoa.
Good luck to TBAS.
Avamua Dave Haleck