Recently Passed Public Law Allows for Banks to Loan Higher Amounts to Bank Staff and Relatives of Bank Employees
Palikir, Pohnpei (FSM Information Services): December 18, 2009 - As of December 11, 2009, domestic banks in the FSM can lend up to $25,000 to bank staff or relatives of the banking staff without having to go through an arduous application and review process. This is a big change from the previous limit of $5,000, thanks to a new public law.
During the First Regular Session of the 16th Congress, President Mori transmitted a proposed bill to amend some of the banking laws of the FSM. The bill had two parts. The first part of the amendment creates separate treatment over the applications of foreign banks seeking to establish a new branch in the FSM as opposed to first-time applications for issuance of a license. The second part altered the loan exposure ceiling imposed on banks and increased the limit that a bank may loan to its officer, director, agent, employee and/or relative. A copy of the original bill can be seen on the FSM Congress website at the following link: http://www.fsmcongress.fm/pdf documents/16th Congress/Bills/C.B 16-05.pdf
Congressional Act 16-18 came out of the Second Special Session of Congress with only part of the second section of the amendment intact. The amendment is to Title 29 (Commercial Banking) Section 613. It effectively increases the amount a bank can loan to officers, directors, agents, employees, or shareholders of any domestic bank or any relative from $5,000 to $25,000 without having to go through a lengthy application and approval process (such as that set out in Section 613, Section 1).
President Mori has signed this bill into Public Law 16-16 and conveyed appreciation to the Congress in his transmittal letter to Speaker Figir for passing this Act to increase the loan ceiling for bank staff and relatives as a realistic measure given the economic conditions of the nation. He also states that he will continue to work closely with the Congress to see that the other amendments are addressed at a later time.
For further information on this release, please contact:
FSM Office of the President Public Information: Press, Radio, Video P.O Box 34 Palikir Station, Pohnpei, FM 96941 Tel.: (691) 320-2548/2092 Fax.: (691) 320-4356 e-mail: email@example.com http://www.fsmpio.fm/