Congressman Michael San Nicolas on Monday laid out his suggestions for getting Guam residents federal coronavirus economic payments or unemployment assistance as soon as one week from now.
But it seems those he’s included in the suggestions aren’t actually ready to sign on.
The Congressman invited only Speaker Tina Muna Barnes and Republican senators Mary Torres and Jim Moylan, along with media, to his online news conference Monday morning where he outlined two possible avenues.
First, a public solution, under which the Guam Economic Development Authority would sign an agreement with the GovGuam pension fund to buy a bond. In essence, that would be guaranteed by the government with interest paid back to the pension fund by the $10 million coming to Guam for local war claims.
“They require a 7% annualized rate of return on their investments – a minimum of 7%. So $10 million at 7% interest would provide capitalization of about $142.8 million,” San Nicolas said.
With the maximum one time benefit for eligible adults sitting at $1200, San Nicolas said that would mean around 116,000 Guam residents could apply for this advanced pay-day loan of sorts.
The Congressman says the retirement fund is the only public entity on island with enough capital to fund this agreement with GEDA.
“The way we can roll out that program is that the Legislature would authorize GEDA to be able to give out economic impact loans. GEDA would set up an application portal online that would include the applicant uploading a picture or a file copy of their 2018 or 2019 tax return. That would be the proving document that the applicant is qualified for the funds,” San Nicolas said.
He added that as part of that application, local residents would authorize their federal payments to go directly to GEDA, which can then pay back the pension fund with interest.
The second option would have the same structure but with the local banks funding these bridge loans. San Nicolas says this bank-option is less complicated than the one with GEDA and the pension fund.
San Nicolas admits none of these entities — GEDA, the local banks or the pension fund have been spoken to — or have any explicit buy-in in either of his suggestions.
Melanie Mendiola, the director of GEDA, told PNC that nothing is currently in the works…
“GEDA wasn’t consulted with this plan so we haven’t been able to really take a look and review in detail. So we need some time to take a look before we weigh in on the feasibility of the plan… secondly, we’d like to wage specific guidance from GGRF, in terms of the ability to loan retirement funds,” Mendiola said.
Guam Banking Association President Ed Untalan also says this is the first time he heard of this and any plan like this would need to go through the right channels first to review logistical and regulatory issues involved with this suggestion…
But the congressman insists that while there are several steps to getting the local programs set up, they’ll be faster than the federal dollars and even quicker if senators decide to pursue the bank option.
“I know how fast our legislature can work with very talented people in there on the staff side. So I really think that the mandate can be crafted within 24 hours if everybody burns the midnight oil. The legislature can go into session and get it passed and the banks can get to work getting the application up on their website. So I think between the two options, the fastest one would be the private option. I think that one week is something that we can do! I think Guam can do this,” San Nicolas said.
The congressman is suggesting the weekly unemployment benefits roll out the same way, with the banks or GEDA paying out a certain amount that would eventually be back-filled when the White House program kicks in.
All the local programs would be optional, according to San Nicolas, and residents could choose to wait for the federal dollars.
While senators on the conference call had varying questions for the congressman, they all agreed to explore these options more thoroughly.
Governor Lou Leon Guerrero would not comment on San Nicolas’ proposal. At her daily news conference, the governor said she was not informed or engaged on the matter.
She did say, though, that her team is looking at a different program that could provide financial support for the local community but did not share any further details.