Fund asked to support BoS’ request to end receivership

Bank of Saipan is asking the NMI Retirement Fund to support its petition to end the bank’s receivership status, according to Fund administrator Karl T. Reyes.

“The bank is asking whether the Fund could support for the end of receivership. What the board did was to meet with parties to personally hear from them,” said Reyes.

He said BoS representatives as well as bank receiver Antonio Muna presented the proposal during the Fund board’s meeting Thursday afternoon and Friday morning.

The Attorney General’s Office, likewise, presented its position on the issue during the meeting.

Reyes said the Fund will make known its decision during its meeting on Sept. 23, or four days before the set court hearing on the bank’s petition.

He said the bank is asking if Fund officials could attend and testify during the hearing or submit a position paper in support of the proposal.

During the meeting, the AGO expressed its support for the termination of receivership “under certain conditions.”

The Fund has $4.6 million remaining deposits in the bank.

Meantime the Commerce Department said earlier that it is not opposing the proposed termination of the bank’s receivership.

Acting Commerce Secretary Daniel L. Camacho said the agency is working closely with the Attorney General’s Office on the matter “to make sure that it (the bank) is in a situation where it can continue to operate and not present any risk to stockholders and depositors.”

Camacho said his office will submit its comments to the court on BoS’ application.

As acting Commerce secretary, Camacho also acts as the CNMI government’s banking director and insurance commissioner.

In early August, BoS asked the court to end the receivership, saying that the financial institution has achieved stability.

This came after the bank had successfully struck an agreement with the Commonwealth Development Authority to keep its deposits intact with the bank for the next several years.

The CNMI government remains the bank’s biggest depositor, with over $15 million in deposits.
These belong to the Marianas Public Lands Authority, NMI Fund, and CDA.

Earlier, BoS president Jon Bargfrede and Muna said the bank has met the criteria established by the court for ending the receivership.

They said bank operations have normalized, withdrawal restrictions on any private depositors’ accounts have been lifted, deposits have grown, and the bank has been generating new loans.

Muna, who was appointed as bank receiver beginning Sept. 27, 2002, pushed for the bank’s rehabilitation.

He replaced Randall Fennell who had wanted to liquidate the bank’s assets and pay off depositors.

The bank temporarily shut down operations in 2002 following the reported fraudulent acquisition of loans by the group of businessman Bert Douglas Montgomery, who is now serving his sentence in federal prison for wire fraud and other charges.

After about a year, the bank’s main branch in Chalan Kanoa reopened following the court’s approval of a rehabilitation plan.

In January this year, the bank reopened its branch in Garapan.