Banks, Estonia, Financial Services

The Association Bank intends to contest the decision that denies it an activity license.

The supervisory board of the Association Bank on Tuesday upheld the stance of the management board that they will contest the decision of the Financial Supervision Authority. "We do not agree to the approach of the Financial Supervision Authority that the City of Tallinn as an institution is not trustworthy enough to be a member of the bank," Ulle Mathiesen, member of the management board of the Association Bank, said in a press release.

The Association Bank of Estonia filed an application for a banking license with the Financial Supervision Authority in January 2016.

"A little more than one year and two months later, after several meetings and an intense exchange of mails, the Financial Supervision Authority reached the standpoint that they will forgo a review of our application. They formally notified their decision to us on April 5, 2017," Mathiesen said. The Financial Supervision Authority said they made a decision like this because they were unable to sufficiently assess the credibility of the City of Tallinn as the bank's founder unless they got additional information about Edgar Savisaar.

She said the reasons cited by the regulator seemed strange, as Edgar Savisaar has been removed from the management of the city by a court order already for a long period of time. "Besides, the Financial Supervision Authority demanded from us the charge sheets of the court case related to Edgar Savisaar and the chairman of the Council of Tallinn, Kalev Kallo, the presentation of which by the Association Bank of Estonia to the Financial Supervision Authority is legally impossible. In our opinion there's no reason to doubt the financial credibility of the City of Tallinn as an institution," Mathiesen said.

The Association Bank of Estonia was formally established in June 2015 by 122 private individuals and 32 legal persons, including the City of Tallinn, Mainor, E-Piim Tootmine, Silikaat Grupp, Saidafarm, Fund Ehitus, Endover KVB and Seven Oil, the credit and loan associations of Polva County, Kambja and Kehtna, the Rural Development Credit Cooperative, and EELK Varahaldus, property management company of the Estonian Evangelical Lutheran Church.

The bank was entered in the commercial register in February 2016 and the number of members of the bank has climbed to 161 by now.