The race to create the next Public Bank in the United States has been won by far flung American Samoa! In early April, the Federal Reserve — after two years of delay — allowed the Territorial Bank of American Samoa access to the U.S. payments system.
An article in American Banker by editor-in-chief Rob Blackwell quotes PBI Chair Ellen Brown:
“It does set a precedent. … It definitely will add impetus.”
The article continues:
“It’s a huge deal for the people of American Samoa,” Phil Ware, president of the Territorial Bank, said in an interview. …
“There hasn’t been a commercial loan made on the island in five years or more,” he said. “So one of the first things we want to start doing is extend credit to the small-business community. That is a necessary part of the economy.”
Public-bank supporters, meanwhile, see the Fed approval as a sign that there won’t be regulatory hurdles to the creation of additional public banks in the U.S."
Rob Blackwell’s article continues:
"Both the San Francisco Fed and a spokesman for Quarles [the new vice chairman of banking supervision at the Fed] declined to comment for this article. But sources suggested that the Fed was at least partly concerned about what kind of precedent it would set in approving a public bank. …
“'It is significant that a new public bank has been opened within the U.S. territory and can function within the payments' system, said Thomas Marois, senior lecturer of development studies at the University of London, who has studied public banks. 'It demonstrates that there is no … legal barrier.'"