A call for parity on loans—whether in default or not

To Senate President Joaquin G. Adriano and House Speaker Benigno R. Fitial:

As you may be aware, we are a local business that received a Commonwealth Development Authority loan in 1995 for $598,000 to open our franchised health club known as Gold’s Gym. After a year of construction, we began making payments on our loan to CDA in March 1997. Over the last eight years, we have made enormous personal sacrifices in order to focus our attention on serving our customers, employees and repaying the government for the opportunity it gave us to realize our dreams of operating our own business. We knew that owning a business and taking on debt required risk on our part, as does any sensible business owner. We have made every loan payment to CDA on time. In fact, when we could afford it, we began accelerating our payments to CDA rather than paying ourselves so that one day that money could be used to help other local entrepreneurs start their own business. We are presently paid two years in advance of our scheduled loan payment at CDA.

When we found out that Senate Bill 14-48 was passed by both the House and the Senate to relieve all CDA delinquent and default borrowers of their interest and penalties, we were shocked, especially since there was nothing to reward CDA borrowers that are in good standing. We have been responsible local business owners by paying our employees, taxes and loan payments on time. This legislation is extremely unfair to us and businesses like us that have been paying their loans to CDA. We’ve heard the excuse that the delinquent and default borrowers need to be provided special accommodation due to the bad economy. This is an unacceptable excuse because we all faced the same economy. We also believe that many of these delinquent and default borrowers were in the same status before the economy began shrinking in 1998, which truly means that the economy was not the primary cause of their situation.

We understand that the acting governor recently vetoed this legislation and we urge the House and Senate to be responsible and NOT override the veto. However, if the House and Senate still plan to override the veto and pass this legislation into law, then we should receive the same benefits that the CDA delinquent and default borrowers will receive from this law. This means that all of the interest we paid to CDA to date should be credited toward our remaining principal balance. As of this date, we have paid CDA $311,508.51 in principal and an additional $315,813.54 in interest. Our outstanding principal balance is $260,000; therefore, if the interest we paid is credited toward our remaining principal balance, our CDA loan will be paid in full. We appreciate your consideration and look forward to your response.

Josephine Cabrera Togawa-Plinske
Gold’s Gym Saipan