Having transferred the shares of the Banco Pacifico Ecuador, owner of the Pacific National Bank (PNB), based in Miami, to the National Finance Corporation (CFN for its Spanish acronym), by decision of the Office of the President through the Executive Decree 941, was the reason why the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve in the U.S. decided that the PNB must be sold on a mandatory basis.
U.S. authorities have ruled that the PNB (only bank of Ecuadorian owners who have a license to operate in the U.S.) should be sold until March 28, 2013; otherwise it must go into liquidation.
These authorities, prior to the decision of selling, warned the CEO of Pacific Bank, Andres Baquerizo, that, according to U.S. law, the CFN is regarded as a company and, therefore, “an approval from the Federal Reserve to indirectly acquire the PNB, was required“. This involved sending an application by the CFN to become a Bank Holding Company.
However, the Federal Reserve, despite its strict rules, said another option could be putting the PNB in a disinvestment trust on a short term “before the transfer of the BPE to the CFN.”
With that information, Baquerizo began the process of transfer of shares in favor of the CFN, choosing to establish a disinvestment trust with the shares, on January 17, 2012.
It should be noted that the trust was signed on April 4, 2012, and because of this, the Federal Reserve warned that the transfer before receiving approval from U.S. regulators “Would result in a violation of the Bank Holding Company Act” which could harm the PNB.
According to Fausto Ortiz, former Minister of Finance of the government of Rafael Correa considers that the sale will not affect significantly the Banco Pacifico Ecuador as the heritage of the PNB is $ 40 million, which compared to the total assets of the Pacifico, i.e., $ 3,320 million, is barely a 1.2%.
However, Ortiz claims that the local authority will lose a valuable institution because it was the only Ecuadorian one that could operate on U.S. soil.