Lt. Governor Gerard Luz James II, chairman of the V.I. Banking Board, apparently disagrees with the director of the Industrial Development Commission concerning whether tax benefits enjoyed by the V.I. Community Bank would automatically extend to Chase Manhattan Bank if Chase's purchase of VICB is approved by regulators.
IDC director Frandelle Gerard said recently the commission wants beneficiaries to grow and that she believes the acquisition of the Chase assets would be covered by the IDC agreement VICB has with the government.
"That's news to me," James said in a brief interview. He said he did not think the benefits would transfer because Chase is a separate entity.
James would not say what the Banking Board's position is on the issue because it was one of the things discussed in executive session Friday.
He did say he believes that the board is close to a decision and probably will have a lot to say in about three weeks.
The local regulatory agency has been working with the Federal Deposit Insurance Corporation in researching the proposed purchase. The sale requires approval from both entities.
In a press release, James said the board met Friday with John Carter, deputy regional director of FDIC, who is headquartered in New York, and with Tom Conway, who is in charge of FDIC's San Juan office.
"The FDIC officials, as well as the members on the board, indicated that there are still several issues to be ironed out before a final decision can be made on the acquisition," the release states. "We have been working diligently to ensure that the interests of the Virgin Islands citizens have not been compromised in any way."
Chase's assets in the Virgin Islands far outweigh VICB's. According to financial statements the two reported to the government for 1998, Chase had $345,316,000 compared with the V.I. Community Bank's $64,930,000.
VICB is the only bank in the territory that has IDC benefits. It is exempt from real property taxes, gross receipts and excise taxes, and from 90 percent of income taxes.
