ALL banks in the CNMI must be insured by the Federal Deposit Insurance Corp. to ensure that depositors and their money are well protected and to avoid incidents similar to what happened to Bank of Saipan, according to acting Commerce Secretary Fermin M. Atalig.
“I will recommend that all banks be FDIC approved,” Atalig said.
“Even though the insurance is only up to $100,000 for every deposit, once you’re FDIC insured, the FDIC people can come anytime and check on your books so that is a benefit. The banks would always be on their toes,” he added.
Atalig as acting commerce secretary has no power to require all Saipan-based banks to be FDIC insured because an existing law allows each banking institution to have the sole authority to decide if they want to be FDIC insured.
“If all the banks here are FDIC approved, I don’t think we will be in this mess now. But I’m not saying that non-FDIC banks are not safe—I’m just saying that it will be better for everyone if they are FDIC approved,” Atalig said.
The FDIC is an independent agency of the U.S. government.
Congress established it in 1933 to insure bank deposits, help maintain sound conditions in the American banking system and protect the nation’s money supply in case of financial institution failure.
Under Public Law 4-33, all banks in the CNMI must be federally insured.
However, the 9th Legislature amended this law and gave banks the discretionary power if they want to be FDIC insured.
In a separate interview, House Ways and Means Committee Chairman Stanley Torres, R-Saipan, said lawmakers will soon discuss legislation requiring banks to be FDIC insured.
“We are determined to put the law back. We will require or prohibit public funds to be deposited in non-FDIC banks,” Torres said.
More than $14 million in government funds are currently deposited in non-FDIC insured banks. At least $8 million belongs to the Marianas Public Lands Authority.
