Bank of Hawaii is delaying its planned departure from American Samoa for 90 days after conversations between CEO Peter Ho and the U.S. territory’s newly elected governor, Lolo Moliga.
American Samoa has been attempting to persuade the bank to remain in the territory, and the Federal Reserve Board of San Francisco will hold hearings Tuesday in Honolulu and American Samoa on the bank’s plan to close its two branches there.
Bankoh, the only U.S. bank in American Samoa, said Wednesday it will close the Tafuna branch on March 15, as originally planned, but will keep the Utulei branch open until June 14. The two branches employ a total of 30 people.
Ho met with Moliga in Honolulu last week and spoke with him again by phone on Tuesday.
"During my conversations with the governor, he brought to my attention the hardship this might cause by us leaving on the scheduled March 15th date," Ho said. "We did not want to create disruption in the marketplace, and therefore made the decision to extend the closing date. We certainly intend to work closely and diligently with Gov. Moliga and his administration during this interim period to ensure a smooth and orderly transition."
Moliga said Ho and the bank’s board of directors demonstrated "great sensitivity" to his plea for help "to avert economic calamity which the territory will experience if sufficient time is not given … to seek a replacement bank or pursue other options."
The governor had been seeking a 12-month extension but said he was still "very grateful" to Ho "for his gesture of good will."
Moliga said Bankoh left the door open for an additional extension if a replacement bank is not established. He said Ho assigned the bank’s physical assets in American Samoa to the American Samoa government to help expedite efforts to find a replacement bank.
No Hawaii banks have indicated a willingness to replace Bankoh in the territory, but a group of American Samoa business people and residents are raising money in an attempt to start a community bank, which would need approval from the Federal Deposit Insurance Corp.
Ho said Bankoh will maintain its cash management and payroll services, along with ATM service, during the 90-day extension. In addition, to further ease the transition, the bank will waive wire fees for one year for consumers wiring money from Hawaii to American Samoa.
Australia-based ANZ, owned by Australia and New Zealand Banking Group, will be the only bank left in the territory when Bankoh exits unless another bank comes in to fill the void.
More than one-third of Bankoh’s customers in American Samoa have transferred their accounts to Honolulu. Another one-third have opened accounts with ANZ. And roughly half of the remaining customers have less than $10 in their accounts, which indicates they are using other banks and are drawing down their accounts before the closing date, Bankoh said.
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AT A GLANCE
>> What: Hearing on closing of Bank of Hawaii branches in American Samoa
>> Who: Federal Reserve Board of San Francisco
>> When: Tuesday at 10 a.m.
>> Where: Tapa III Room in the Tapa Tower of Hilton Hawaiian Village
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Bankoh held about $97 million in deposits from American Samoa before a Nov. 30 announcement that it was pulling out after more than 40 years due to the territory’s geographic isolation from the bank’s other markets. The bank stopped accepting loan applications and opening new accounts on Feb. 15.
U.S. Rep. Eni Feleomavaega, who requested that the Federal Reserve Bank hold a hearing on the matter, will speak at a community meeting hosted by FACE (Faith Action for Community Equity) at noon Saturday at the University of Hawaii at Manoa Business Center to discuss the impact of Bankoh’s closing in American Samoa on residents in Hawaii with families residing in American Samoa, including military personnel. Those planning to attend should contact FACE State Director Drew Astolfi at 782-3674 or via email at drewastolfi@facehawaii.org.
