DEVELOPMENT BANK OF AMERICAN SAMOA

Title 28

FINANCE AND FINANCIAL INSTITUTIONS

Chapters:

01 Development Bank of American Samoa

02-08 (Reserved)

09 U.S. Loan Agreements

10 Banks

11 Savings and Loan Institutions

12-13 (Reserved)

14 A.S.G. Credit Facility Agreements

15 Loans

16 Escheat of unclaimed Bank deposits

Chapter 01

DEVELOPMENT BANK OF AMERICAN SAMOA

Sections:

28.0101 Purpose of Bank.

28.0102 Charter of Bank-Powers.

28.0103 Board-President.

28.0104 Audit.

28.0105 Capital investment-Loan guarantees.

28.0106 Existence for public benefit-Tax exempt status-Government not liable for Bank’s obligation.

28.0107 Annual report required.

28.0108 Assets and liabilities existing upon enactment of this chapter.

28.0109 Loans to aliens.

28.0110 Malfeasance of Director.

28.0111 Larceny and fraud-Penalty.

28.0101 Purpose of Bank.

In order to provide the people of American Samoa with lending and investment facilities and assist in the promotion of private enterprise and meet the needs of developing economy, the corporate body known as the “Development Bank of American Samoa”, hereinafter referred to as “the Bank”, is empowered under the charter of the Bank to carry out its purposes.

History: 1972, PL 12-67 § 1.

28.0102 Charter of Bank-Powers.

The charter of the Bank is as follows in this section and 28.0103 through 28.0105:

(a) The existence of the Bank shall be perpetual.

(b) The principal office of the Bank shall be located at Pago Pago, Tutuila, American Samoa.

(c) Subject to any existing limitation or limitations hereinafter enacted, the Bank, through its officers and agents, is authorized to engage in all banking functions, other than to receive deposits of money that will assist in the economic advancement of American Samoa.

(d) In performing the functions authorized in subsection (c), the Bank shall have and exercise all lawful powers normally exercised by banking corporations, including the following:

(1) to adopt, alter and use a corporate seal:

(2) to adopt and amend bylaws governing the conduct of its business and the exercise of its powers;

(3) to sue and be sued in its corporate name;

(4) to acquire in any lawful manner, real, personal, or mixed property, either tangible or intangible, to hold, maintain, use, and operate such property, and to sell, lease, or otherwise dispose of such property.

(e) The Board may, by majority vote of its entire membership, adopt, amend, or repeal bylaws of the Bank providing for the management of the business of the Bank, the organization, meetings, and procedures of the Board, the duties of the officers of the Bank, the officers required to furnish bonds and the amounts thereof, the form of the seal of the Bank, and the preparation and submission of required reports. Bylaws may not be adopted, amended or repealed except after 1 week’s written notice to each Director.

History: 1972, PL 12-67 § 2, 3.

28.0103 Board-President.

(a) The affairs of the Bank must be managed and its corporate powers exercised by a Board of Directors, hereinafter referred to as “the Board”, which consists of 10 members, 9 of whom are to be appointed by the Governor with the advice and consent of the Senate. The Chairman, who is a Board member, is elected by a majority of the Board. In the event of a vacancy for any reason whatsoever, the Governor may appoint a person to fill the vacancy until the next session of the Legislature. All Directors serve two year terms. All appointees may be reappointed to the board and may be removed by the Governor for cause, provided the majority of the Board concurs in the cause or causes offered. At least 4 of the Board members are representatives of private business or financial interests in American Samoa. The President of the Development Bank is a nonvoting ex officio member of the Board of Directors. The President may not serve as Chairman of the Board of Directors.

(b) The Governor, with the approval of the Board, appoints a President of the Bank, with the advice and consent of the Senate. The President is responsible for the operation of the Bank with the assistance of such other officers and employees as the Board may authorize. The salary of the President and other officers is established by the Board.

History: 1972, PL 12-67 § 2, 3; 1973, PL 13-28 § 1; amd 1985, PL 19-3 § 1.

Amendments: 1973 Provided for approval by senate and omitted provisions relating to original appointments in subsection (a,).

1985 Increased board membership from 9 to 10; made general amendments to overall language of the section.

28.0104 Audit.

The books and records of the Bank shall be thoroughly examined and audited annually, following the end of the Bank’s fiscal year, to show the statement of condition as of that fiscal year end and operations of the Bank for the 12-month period, by qualified independent certified public accountants, preferably of recognized international standing, appointed by the Board. The government shall have the right ‘through qualified personnel in the Department of Administrative Services, or its auditing offices, to examine the affairs of the Bank at reasonable intervals, to insure that the Bank is operating its affairs on a sound businesslike basis.

History: 1972, PL 12-67 § 2, 3.

28.0105 Capital investment-Loan guarantees.

(a) The capital of the Bank, together with all funds and credits that it may obtain from any loans, credits, grants, or other advances from the United States Government, or any related instrumentality empowered to make funds available to the Bank or any international finance institution or from private financial institutions that may provide loans or credits to the Bank, shall be available for investment by the Bank whether in the form of loans or stock in enterprises controlled by private individuals, partnerships, or corporations engaged in business or industry of whatever nature, that are deemed to conform to the objectives of furthering the economy of American Samoa except as may be limited by subsection (b). The loans or stock investments and all temporary short term investments must be made on the terms and conditions that the management of the Bank may determine and shall be approved by the Board of Directors and must be based on prudent and sound business judgment, as to the capacity of the prospective borrowers to repay, and all stock investments made where, in the judgment of the board, the prospects of successful operation of the business or industry seem warranted. The loans or credits authorized by this section may be only to qualified borrowers who are American Samoans or permanent residents of American Samoa.

(b) The Bank may guarantee loans or equipment leases by qualified lenders or equipment leasing firms, and it may guarantee construction performance bonds by bonding companies to entities fully or majority owned or controlled by American Samoans who although having reasonable assurance of repayment, do not qualify for loans, leases, or performance bonds under the requirements imposed by the original lender, lessor or bonding agency. The guarantees by the Bank may not exceed in the aggregate at any one time a total of 4 times the capital and surplus (excluding undivided profits) of the Bank; nor may the aggregate of Bank loans to and guarantees for any person or entity, or group of persons or entities with a common ownership, business, or financial interest, exceed 10% of the Bank’s capital and surplus unless the loan or the performance of a contract is secured directly or under right of assumption of collateral property, tangible or intangible, carrying a written and expert appraisal of at least 35 percent in excess of the amount guaranteed. All guarantees shall be approved by the Bank’s Board of Directors. In making guarantees and thus assuming contingent liability, the Bank shall, consistent with conservative Banking principles, keep at all times a portion of its capital funds invested in securities of the Treasury or other agencies of the United States.

(c) Commercial, or non-residential, guarantees under this section shall not exceed 90 percent of the loan amount or the total encumbrance granted to secure such loan and guarantee, whichever is less.

(d) Guarantees of home loans under this section may, in the discretion of the Bank Board of Directors, exceed 90% of the loan amount, provided that such loan and guarantee is fully secured and collateralized by the home to be constructed or improved.

History: 1972, PL 12-67 § 2, 3; amd 1973, PL 13-28 § 1, 2; 1978, PL 15-78; 1980, PL 16-81 § 1; amd 1987, PL 20-21 § 1.

Amendments: 1973 Subsection (a): amended generally.

Subsection (b): deleted provisions relating to investment of capital funds by Bank.

1978 Subsection (b): amended generally.

1980 Subsection (b): added “of the total encumbrance granted” to next to last sentence.

1987 Replaced “Loans” with “Loan guarantees” in section title. Subsection (b): replaced language concerning loan guarantees with clarifying language and required approval of all guarantees. Subsections (c) and (d): added.

Case Notes:

Common stock issued by government corporation to a Bank in exchange for retirement of debt was not improper and was within authority of corporation’s board of directors. Fa’atiliga v. Lutali, 3 A.S.R.2d 139 (1986).

28.0106 Existence for public benefit-Tax exempt status-Government not liable for Bank’s obligation.

The Bank exists and operates solely for the benefit of the public and is exempt from any taxes or assessments on any of its property, operations, or activities. The debts and obligations of the Bank are not debts or obligations of the government, the government may not be responsible for any such debts or obligations.

History: 1962, PL 7-11; 1969, PL 11-40.

28.0107 Annual report required.

(a) The Development Bank of American Samoa must prepare and file with the Governor and with the Legislature of American Samoa, annually, within 90 days after the close of its fiscal year, a report sworn to by an officer of the Bank stating:

(1) the name and address of the Bank;

(2) a profit and loss statement of the last fiscal year and a statement of its assets and liabilities as of the close of the year; and

(3) the names and addresses of all Directors and officers of the Bank.

(b) The report must be made available to the public by publication or otherwise.