The measure requires that government funds, both federal and local, should be deposited in a bank covered by the Federal Deposit Insurance Corp.
Introduced by Vice Speaker Joseph P. Deleon Guerrero, R-Saipan, House Bill 16-4 seeks to repeal and re-enact some portions of the Commonwealth Code governing deposit security requirement for fund of the CNMI government and its agencies, including autonomous entities.
Crisostimo, D-Saipan, said he talked with some officials of Bank of Saipan and they believe that the legislation will be disadvantageous to locally run bank.
The Bank of Saipan is still in the process of securing FDIC membership, the senator said.
“This is the bank that we know, the bank of our community,” Crisostimo said, adding that the bank’s slim chance of making money from doing business with the government should also be taken into consideration.
Crisostimo urged his colleagues to listen to the concerns of the bank.
The bill, he said, favors only the big banks and not local businesses.
But Sen. Maria T. Pangelinan, D-Saipan, said it is the government’s responsibility not to risk public funds by placing them in non-FDIC banks.
She doubts whether Bank of Saipan’s stockholders deposit their money in non-FDIC banks.
“If these bank owners will risk their own money in these banks, we will give it a second thought,” Pangelinan said referring to the bill.
Sen. President Pete P. Reyes noted the Bank of Saipan’s problems in the past which put public funds in jeopardy.
But he said he is willing to hear from the Bank of Saipan and other financial institutions before the Senate acts on the bill.
In early 2002, the CNMI government placed the bank under receivership after federal authorities arrested the bank’s former chief executive officer Tomas Aldan for attempting to sell it to U.S. “investors” under fraudulent pretenses.
