The chairman of the Board of the Development Bank of American Samoa, Senator Nuanuaolefeagaiga Saoluaga Nua has confirmed that when the current board came in, there was an interest freeze on certain loans.
But he said in 2014 the board approved a resolution to reverse the interest freeze program and have all loans under this program repay all the frozen interest from 2010 up to the time that the resolution was approved.
In addition the interest on the principal of the loan, accrued up to the time of the board’s decision to reverse the policy would be paid.
Senator Nua said if there are any loans which did not follow the board’s decision then it is the fault of the management and loan managers.
According to Nua, the interest freeze program was having a negative effect on DBAS’ income and he cited the 2010 audit report for DBAS which said that DBAS’ decision to adopt an interest freeze policy was having a negative impact on the bank’s operating activities.
He said the policy as he understood it was intended to help loans which were 90 and 120 days behind on their payments and it was supposed to be a temporary relief until the loans were at 40 or 60% of the principal amount of the loan.
He said in 2014, the board decided to reverse the interest freeze policy after they noticed that none of the loans covered were anywhere close to paying their 40 or 60% of the original loan amounts.
Nua said the interest freeze program was in place when they came in, and was started by the previous board as a way to help resolve loans that were behind.
A statement from DBAS president Ruth Matagi Faatili last week said that the freeze on loan interest was discontinued in December of 2010.
Nua said he is calling a special meeting of the DBAS board for tomorrow to discuss the matter about the interest freeze loans.
He said he will find and provide to KHJ News, the copy of the resolution which the board approved in 2014 to discontinue the program and reverse all loans which had their interest frozen up to that time.
According to the board chairman, all interest that was not paid as well as the interest accrued on the principal had to be paid by the borrower.
In the meantime, KHJ News has learned that bank staff who previously had access to loan information are now prohibited from accessing the loan system. Only managers have access.
In addition all bank staff have been instructed not to talk to the media.
DBAS President Ruth Matagi Faatili has yet to respond to follow up questions sent to her last Thursday
