Lieutenant Governor Gregory R. Francis, Chairman of the Virgin Islands Banking Board, said today that the Virgin Islands’ banking industry is financially sound.  Concerns about the stability of local banks were raised after widespread media reports of the failure of IndyMac Bank, a California based bank.  Banks across the country have been affected by risky mortgages and lending practices.

“The Division of Banking and Insurance takes its responsibilities to provide a safe and secure banking environment for the Virgin Islands community very seriously,” Francis stated.  The Division, in conjunction with the Virgin Islands Banking Board and the Federal Deposit Insurance Corporation (FDIC), is charged with protecting the public’s interest through regulation and enforcement of the banking and financial services industry. 

John McDonald, Director of the Division of Banking and Insurance, added that the problems encountered by banks across the United States are a result of the large number of foreclosures on the mainland.  According to McDonald, banks doing business in the territory generally do not offer certain types of products like sub-prime loans; these conservative practices have helped to maintain a stable banking environment in the territory.

Most depositors in local banks also have the protection of the FDIC which insures deposits up to $100,000. The FDIC is an independent agency of the federal government.

Anyone having questions about the financial condition of their banking institution is encouraged to contact their bank directly.