$150M Bank of America Promise Broken
The $150 Million Commitment
1993, several native Hawaiians went to Bank of America to inquire
about the availability of loans for homes on Hawaiian Home Lands.
bankers were very condescending, handed the group some brochures,
and essentially discouraged them from applying.
led Nā Po`e Kokua (NPK), an organization established to assist
native Hawaiians with housing and related matters, to look at the
issue of how banks in Hawaii were treating native Hawaiians,
especially in regard to redlining, the practice of denying services
to residents of certain areas based on the racial or ethnic
composition of those areas, in Hawaii.
also looked at whether Hawaii banks were meeting their obligations
to communities through the Community Reinvestment Act (CRA), whereby
banks are required by law to help meet the credit needs of
communities in which they operate.
Bank of America announced plans to acquire Liberty Bank, and Nā
Po`e Kokua brought together other native Hawaiian and advocacy
groups to form the Hawaii Fair Lending Coalition (HFLC) and use fair
lending laws and the CRA to challenge the acquisition.
filed a complaint with the Office of Thrift Supervision, filed civil
rights complaints with the FBI and the Justice Department, and a
discrimination complaint with the Office of Fair Housing.
“oral argument” hearing was held in Honolulu, where fourteen
representatives of the Hawaii Fair Lending Coalition testified,
including kupuna and community members, many in the state’s second
official language, Hawaiian. This hearing, where press was not
allowed to record, was covered extensively by local print and
the course of six months, HFLC actions and BofA’s responses
generated fifty articles, editorials, and letters to the editor in
the Maui News, Honolulu Advertiser, Star Bulletin, Pacific Business
News, Wall Street Journal, and American Banker.
groups ultimately secured a four-year
$150 million loan commitment for native Hawaiians and
$100,000 in grants for Filipino community organizations, as well as
funding and support for Nā Po`e Kokua to support community
reinvestment by all banks.
Merger: Re-Affirming $150M Commitment/Late Fees:
1998, BofA had only met 2% of the $150 million pledge. HFLC
warned BofA that it was in danger of defaulting on is four-year
commitment, and that the bank was obligated to pay a $4.5
million late fee, based
on the opportunity cost of its failure to make the loans within the
timeframe. HFLC challenged Bank of America’s proposed merger with
NationsBank, which would make it the second largest bank in the
- DHHL Chair Kali Watson also opposed the merger unless Bank of America
made a commitment to providing $150 million in loans. The Commission
further “passed a resolution supporting the formation of a native
Hawaiian financial institution.”
28, 1998, NationsBank reached an agreement with NPK/HFLC,
requiring it to meet its $150 million loan commitment and invest a
minimum of $1 million in a “Hawaiian Bank” and up to $3.5
million with match and other support to compensate for the $4.5
million late fee.
the 100th anniversary
of Hawaii’s annexation, executives from NationsBank and Bank of
America met with NPK, Governor Cayetano, DHHL Chair Watson, CDFI
organizers, and kupuna on Oahu and Maui to publicly confirm their
commitment to the above agreement.
to Create a Native Hawaiian Bank
and activists worked to create the Native Hawaiian Community
Development Financial Institution (CDFI) or “Hawaiian Bank”,
with the support of BofA funding and technical assistance.
business plan and charter was submitted to the Office of Comptroller
of Currency (OCCC) but was denied
local banks were hostile to the efforts and potential funders,
including OHA and DHHL, were not supportive.
has fulfilled half of the commitment and we are working now to
compel them to complete the commitment and pay a late fee.
Ige has invited BOA to Hawaii to meet with NPK/HFLC to resolve this
issue once and for all.