During the first regular session of the 16th Congress, President Manny Mori transmitted a proposed bill to amend some of the FSM banking laws.
The bill had two parts.
The first part of the amendment creates separate treatment over the applications of foreign banks seeking to establish a new branch in the FSM as opposed to first-time applications for issuance of a license to open an initial banking location.
The second part altered the loan exposure ceiling imposed on banks and increased the limit that a bank may loan to its officer, director, agent, employee and/or relative.
A copy of the original bill can be seen on the FSM Congress Web site at the following link: http://www.fsmcongress.fm/pdf%20documents/16th%20Congress/Bills/C.B%2016-05.pdf
Congressional Act 16-18 came out of the second special session of the FSM Congress with only part of the second section of the amendment intact.
The amendment is to Title 29 (Commercial Banking) Section 613.
It effectively increases the amount a bank can loan to officers, directors, agents, employees, or shareholders of any domestic bank or any relative from $5,000 to $25,000 without having to go through a lengthy application and approval process (such as that set out in Section 613, Section 1).
Mori has signed this bill into Public Law 16-16 and conveyed appreciation to the Congress in his transmittal letter to Speaker Isaac Figir for passing this Act to increase the loan ceiling for bank staff and relatives as a realistic measure given the economic conditions of the nation.
He also states that he will continue to work closely with the Congress to see that the other amendments are addressed at a later time.
