Commerce supports end of BOS receivership

The Commerce Department said it is not opposing the proposed termination of the receivership of Bank of Saipan.

In an interview yesterday, acting Commerce Secretary Daniel L. Camacho said the agency is working closely with the Attorney General’s Office on the matter.

“We do not oppose the ending or the removal of receivership but we want to make sure that the bank is in a situation where it can continue to operate and not present any risk to stockholders and depositors,” said Camacho.

He said his office will submit its comments on BoS’ application in court next month.

Camacho, who now acts as the CNMI government’s banking director and insurance commissioner, said the BoS hearing is set on Sept. 20 at the Superior Court.

“We would give our comments whether we oppose it or not and we may request for continuance or additional time; but basically, all I’m saying is we do not oppose the removal of receivership,” said Camacho.

Earlier this month, BoS and its receiver, Antonio S. Muna, asked the court to end the receivership, expressing confidence that the bank has achieved stability.

This after the bank struck an agreement with the Commonwealth Development Authority for the government agency to keep its deposits with the bank for the next several years.

The CNMI government remains the bank’s biggest depositor, with approximately over $15 million in deposits. Of the total amount, the Marianas Public Lands Authority has some $9 million; the Northern Mariana Islands Retirement Fund, $5.6 million, and CDA controls the remaining deposits.

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 was appointed bank receiver beginning Sept. 27, 2002, replacing Randall Fennell who had wanted to liquidate the bank’s assets and pay off depositors.

Muna favored the rehabilitation of the bank from day one. He worked closely with the bank’s shareholders, managers and depositors and implemented a court-approved rehabilitation plan.

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

The bank’s main branch in Chalan Kanoa reopened in May 2003 following the court’s approval of a rehabilitation plan. In January this, the bank reopened its Garapan branch.

Bargfrede said the bank had begun to normalize in its operations and has removed any withdrawal restrictions since December 2004.

At that time, it reported an operating profit of approximately $1 million and new deposits of $4 million, which increased total deposits to about $23 million.