Financial Crime World

CNMI Government Still Owes $1.3 Million in Outstanding Loans

Unpaid Debt Still Outstanding Despite Repayment Efforts

Saipan, CNMI - The Northern Mariana Islands Settlement Fund is still waiting for the Commonwealth of the Northern Mariana Islands (CNMI) government to settle its outstanding loan debt of $492,875 and $1,303,939 respectively.

Loan Details

  • Loans matured in March 2015
  • Interest rate: 7.75% per annum
  • Secured by a first mortgage on the real property where the CNMI Judicial Complex was constructed and assignment of all revenues collected by the CNMI Court

Sources of Funding for Repayment

The funds were transferred to the Settlement Fund as part of the settlement agreement, with sources of funding for repayment coming from:

  • Criminal and civil fines
  • Revenues collected by the CNMI Court

Settlement Fund Updates

During the years ended September 30, 2021, and 2020, the CNMI Government made payments to reduce the outstanding loan balance.

Annual Payments Obligation

Under the settlement agreement, the CNMI Government is obligated to make minimum annual payments totaling approximately $120 million over the next three years. The government may petition the U.S. District Court to cease making annual payments if it believes the Settlement Fund has assets equal to the actuarial present value of accrued benefits of the settlement class members plus reasonable expenses for its expected life.

The Settlement Fund also owns a consent judgment totaling $779 million, which it can enforce against the CNMI Government in the U.S. District Court if the government fails to timely pay its obligations under the settlement agreement.

Settlement Fund Statistics

As of September 30, 2021, and 2020:

  • 2,630 members were receiving benefits or entitled to receive benefits, including retirees, beneficiaries, and those with disabilities.
  • 71 active settlement class members contributed to the fund.

Conclusion

The Settlement Fund continues to rely on contributions from its members and loan repayments from the CNMI Government to meet its obligations and provide benefits to its members.