American Samoa Seeks to Comply with Financial Regulations Amid Federal Funding Requirements

Background

In an effort to align with federal requirements for federal funding awarded to the territory, the Lemanu-Talauega Administration is proposing amendments to local law regarding government deposits currently required to be made into the Territorial Bank of American Samoa (TBAS).

The Issue

The federal government mandates 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). However, TBAS is not federally insured by FDIC, which has indicated it cannot insure accounts at the bank under its statutory and regulatory rules. As a result, ASG and its semi-autonomous agencies are unable to comply with federal regulations without amending a provision of local law on deposits with TBAS.

The Proposal

The proposed amendment aims to add an exception to the current law, stating that unless specifically prohibited by federal statute or regulation, or directed by order of the courts, all government funds and deposits shall be deposited with and maintained at the TBAS. This would ensure compliance with federal regulations and maintain access to federal funding for American Samoa’s government agencies.

Current Situation

Currently, local law requires all government funds and deposits, including those earned or received by ASG semi-autonomous agencies such as: * American Samoa Power Authority * American Samoa Community College * American Samoa Telecommunications authority to be deposited and maintained at the government-owned TBAS. However, to comply with federal requirements, ASG currently uses accounts at Zions Bank, a FDIC member based in Utah.

Next Steps

The bill was introduced in the Senate last week and has been assigned to a committee for a hearing this week. It is expected to be introduced in the House in the coming days. The proposed amendment aims to ensure compliance with federal regulations and maintain access to federal funding for American Samoa’s government agencies.