Bill to establish margin account for MPLT loan introduced

10/27/2025 - Rep. John Paul Sablan has introduced a bill that would conditionally authorize the Marianas Public Land Trust to establish a margin account solely to facilitate the $29-million loan authorized under Public Law 24-13.

Introduced on the House floor last Oct. 24, House Bill 24-68 would allow MPLT to open a margin account with a licensed U.S. broker-dealer. The measure grants the trust narrow and temporary authority to borrow against its assets through a margin account to finance the CNMI government’s $29-million Settlement Fund loan under PL 24-13, while ensuring strict fiduciary safeguards and legislative oversight.

Signed into law last Sept. 23, PL 24-13 authorizes MPLT to lend $29 million to the Commonwealth government to cover its annual obligations to retirees.

During last week’s House session, Sablan said that while he was introducing the measure, he asked his colleagues “not to take action as there is a scheduled meeting with MPLT” today, Oct. 27, at the House chamber.

Under the bill, MPLT may open a margin account only to secure or facilitate the $29-million loan and cannot use it for any other investment or trading activity. The trust may pledge only the minimum amount of investment-grade securities necessary to secure the loan, with total collateral exposure not to exceed the cash equivalent of $29 million.

Sablan’s bill also underscores that trustees must continue to uphold their constitutional duties of prudence, loyalty, and preservation of the trust corpus. 

The measure clarifies that margin transactions are not automatically deemed “prudent,” nor does it grant immunity to trustees.

Additionally, MPLT would be required to submit a detailed report to the Legislature and Gov. David M. Apatang within 30 days of entering into any margin agreement. The report must outline the collateral pledged, borrowing terms, and safeguards in place. Quarterly updates would also be required until the margin account is closed.

Finally, HB 24-68 includes standard provisions ensuring that the law remains valid even if certain sections are struck down and that existing rights and liabilities remain unaffected.

Report by Mark Rabago