CDA loan delinquency at 83 percent

The delinquency rate on loans obtained from the Commonwealth Development Authority has reached an astronomical 83 percent, which will amount to millions of dollars in losses if the monies are not collected—a disastrous situation for the CNMI’s money lending agency.

The CDA vowed to aggressively collect on bad loans, as it opposed proposals for a legislative measure that would seek to condone certain delinquent loans.

Tom Glenn A. Quitugua, chairman of the CDA’s Development Corp. Division, said such legislative intervention would result in “financial disaster” for the CDA.

“In all fairness, I plead to the legislators not to succumb to outside influences. It is unfortunate that at this time, all of our lawmakers have been approached and pressured,” Quitugua said.

“If the Legislature passes a law…[that will] forgive all debtors, including the ones [who] are in default, what would become of our good borrowers who made every effort to pay their loan? What would be the next law? Would it be a law rewarding these few people?” he asked.

Quitugua noted, however, that the Babauta administration and the entire board of the DCD and the CDA oppose such a legislative proposal.

In a telephone interview, Quitugua said he received information that a bill might be reintroduced at the Senate, amid lobbying efforts by certain parties. Quitugua refused to name any lobbying party.

“As chairman of the DCD, I do not wish to air out people’s financial problems in the media, but for the sake of CDA, I must strongly appeal to the people in general that any debt owed must ultimately be paid back,” Quitugua said.

“To the clients of CDA who deserve and present realistic repayment ability or any other financial capability for a loan work out—these are the clients [the] CDA must protect,” he said. “The staff and management welcome all clients to come in especially those who are facing financial difficulties.”

He said the CDA would welcome efforts to make loan repayments, no matter how minimal the amounts might be.

With the high delinquency rate right now, Quitugua said the CDA vehemently opposes any proposal for write-offs, especially for delinquent borrowers who did not exercise fiscal responsibility. He said the CDA could only entertain the possibility of more flexible payment terms to alleviate these borrowers’ financial condition.

“To those clients who want to take advantage of CDA merely as an institution of last resort, I believe throughout the history of CDA, the institution has been very accommodating to each and every one of you. Let us all look at oneself in terms of personal management, and strive to make the best of what we have. After all, CDA can only re-loan funds which are collected from our borrowers,” he added.

Among the more prominent CDA borrowers is businessman Ronald Sablan, the owner of the beleaguered Pacific Gardenia Hotel and the president of the Hotel Association of the Northern Mariana Islands.

The CDA is pursuing on the collection of over $2.4 million in unpaid loans and interests by Sablan and his family’s Sy’s Corp.