Bill seeks banking reforms

A proposed legislation under review by the House Commerce and Tourism Committee will seek reforms in the local banking industry, including enforcement of regulations and easing of government bureaucracy on the half-a-billion dollar sector.

Committee chair Rep. Oscar Babauta said the panel will soon wrap up work on the bill after almost a year of deliberation and consultation with bank executives on the island.

A former banking commissioner with the Department of Commerce, Oscar Camacho, is helping fine tune provisions of the measure which is viewed as crucial by CNMI officials in light of the growth of the financial sector.

According to Babauta, the committee will propose giving authority to the banking commissioner to empower him to conduct comprehensive auditing and inspections of banking institutions in the commonwealth.

It will also seek a slight increase in the banking license, the amount of which is still being evaluated by the House, but at the same time it will lessen bureaucracy in the issuance of business license every year.

“We have also a new provision that would allow them to have the license fee perpetual and annually, they just need to pay the fees and they don’t necessarily go though the entire process of renewing forms,” Babauta said. “We are actually reducing bureaucracy as it applies to banking regulations.”

During deliberation of the bill last year, Camacho had cautioned against placing too much control on the banking operations on the island, saying the move would only impede its development. .

He added the audit requirement by the government puts too much pressure on the bank despite the internal comprehensive internal audit already in place.

Bank executives have called on lawmakers to overhaul existing banking laws to bridge loopholes and update regulations governing their operations, including remittance services of foreign workers.

Meanwhile, Babauta will also propose reform measures on the insurance companies to reflect the recently signed law on mandatory auto insurance requiring car owners to have liability coverage.

“We are giving more teeth as far as enforcement is concerned, not necessarily putting more bureaucracy on the regulations,” the lawmaker pointed out.