Bank of Hawaii has agreed to delay its withdrawal from American Samoa for 12 months amid pleas for an extension from American Samoa officials, residents and others with ties to the U.S. territory.
The change of plans came just an hour before the start of a Federal Reserve Bank of San Francisco hearing in Honolulu on Tuesday to discuss the impact that the departure would have on the territory.
Although the bank still plans to close its smaller Tafuna branch as planned on Friday, Bank of Hawaii CEO Peter Ho said Bankoh’s Utulei branch would remain open until March 15, 2014, to give the territory more time to find a suitable replacement bank.
Ho announced the change following a morning meeting with American Samoa Gov. Lolo Moliga, U.S. Rep. Eni Faleomavaega and their respective staffs.
The Utulei branch initially was scheduled to close with the Tafuna branch Friday, and then last week Ho extended the Utulei branch closure 90 days until June 14.
There are about 71,000 people in American Samoa and about 20,000 American Samoans living in Hawaii.
The Federal Reserve Bank has no regulatory power to prevent any bank from closing branches, but Ho said he wanted to be "supportive and accommodating" to the American Samoa community while at the same time doing what was in the best interest for the bank’s shareholders to make Bankoh a more efficient operation.
Faleomavaega said American Samoa has been "fragile" since an earthquake and tsunami in 2009, as well as the departure of one of the territory’s main tuna canneries.
The exit of Bankoh, which has been in American Samoa since 1969, will deprive the territory of its only U.S. bank, delay cash checking and make it more difficult to send and access money, officials have said. Australian-based ANZ, owned by Australia and New Zealand Banking Group, is the only other bank in the territory.
Moliga said Bankoh’s decision to delay its exit has lifted a heavy burden off his shoulders.
"It also demonstrates the spirit of aloha for which Hawaii is well known around the world," he said.
The Rev. Piula Alailima, who was born in American Samoa but moved to Hawaii in 1967 at the age of 12, told a three-member Federal Reserve panel that Bankoh is betraying American Samoans by leaving.
"Bank of Hawaii has been in American Samoa for 44 years," said Alailima, a pastor of Wesley United Methodist Church in the Waialae/Kahala area. "Bank of Hawaii became family. They became a part of our community and part of our culture, so their leaving is a betrayal. But I’m grateful to hear that Bank of Hawaii has shown some level of loyalty in extending their departure for another year."
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.
Dave Haleck, interim chairman of the Community Bank of Amerika Samoa, told the Federal Reserve Bank via teleconference Tuesday that his group has commitments for $7 million of the $10 million needed to start a bank and that the startup intends to file an application with the FDIC in three weeks.
