By 2016, American Samoa was desperate. Its economy and population had been shrinking for years and hopes of a turnaround fell as the verdant volcanic islands in the South Pacific withered into banking desert.
The Bank of Hawaii announced in 2012 it intended to leave the U.S. territory entirely. It agreed to hang on until a successor could be found but scaled back services.
By 2016, officials and consultants say, no new loans had been issued for four or five years. Consumers who couldn’t afford to travel to Hawaii or the mainland resorted to backyard lenders and paid usurious rates.
In their desperation, the islanders found inspiration in early frontiersman and prairie progressives who had likewise found themselves on the margins of the American economy.
The islanders are now putting the finishing touches on the first new U.S. public bank in almost a century. The development is being closely watched by other isolated regions hoping to kick-start economic renewal — and by the legal marijuana industry whose operators have struggled to enter the federal banking system.
Public banks were once relatively common in the U.S. but today exist only in North Dakota. Typically, state and local governments own the banks and deposit their revenue there. The banks then offer loans, partnerships and services to boost the local economy and hopefully turn a profit.
No loans but plenty of sharks
The seven islands of American Samoa lie about six hours southwest of Honolulu by air. The territory is slightly larger than the District of Columbia and home to 60,000 American nationals. Its largest export is processed tuna under the Chicken of the Sea and StarKist brands.