AMERICAN SAMOA PROPOSES REGULATORY COMPLIANCE CHANGES FOR FINANCIAL INSTITUTIONS TO MEET FEDERAL REQUIREMENTS
Background
The Lemanu-Talauega Administration is seeking to amend local law to ensure compliance with federal regulations regarding government deposits in American Samoa.
Current Situation
According to a bill introduced last week in the Senate, the current provision of local law requires all government funds and deposits to be made into the Territorial Bank of American Samoa (TBAS), which is not federally insured. This presents an issue for the American Samoa Government (ASG) and its semi-autonomous agencies when receiving award funds from the federal government.
Federal Requirements
The federal government mandates that certain award funds received by ASG and its agencies must be deposited in accounts insured by the Federal Deposit Insurance Corporation (FDIC). However, TBAS is not FDIC-insured, making it impossible for ASG and its agencies to comply with the federal rules without amending the local law.
Proposed Changes
The proposed amendment would add a provision that allows government funds and deposits, including those earned or received by semi-autonomous agencies, to be deposited and maintained at TBAS unless:
- Specifically prohibited by federal statute or regulation
- Directed by court order
- Otherwise restricted
This change aims to ensure regulatory compliance while maintaining the existing banking arrangements in place.
Current Compliance Measures
American Samoa Government officials are already using accounts at Zions Bank, a FDIC member bank based in Utah, to comply with federal requirements when depositing federal funds. The proposed changes aim to simplify and streamline this process.
Next Steps
The bill is currently assigned to an appropriate committee for a hearing this week and is expected to be introduced in the House in coming days.
Key Points:
- The Lemanu-Talauega Administration proposes amending local law to ensure compliance with federal regulations regarding government deposits.
- TBAS, the current depository bank for ASG funds, is not federally insured, making it impossible to comply with federal requirements.
- The proposed change aims to modify a provision of local law to allow government funds and deposits to be deposited at TBAS unless prohibited by federal statute or regulation, directed by court order, or otherwise restricted.
- The bill is currently in committee and expected to be introduced in the House soon.