Natalie (Tasha) Kama
Maui County Council
Kahului Seat

Hawaiian Issues

$150M Bank of America Promise Broken

The $150 Million Commitment

  • In 1993, several native Hawaiians went to Bank of America to inquire about the availability of loans for homes on Hawaiian Home Lands.
  • The bankers were very condescending, handed the group some brochures, and essentially discouraged them from applying.
  • This 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.
  • NPK 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.
  • Later, 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. 
  • HFLC 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. 
  • An “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 television media.
  • Over 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.
  • Community 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.

1998:  NationsBank Merger: Re-Affirming $150M Commitment/Late Fees:

  • May 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 nation. 
  • 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.”
  • June 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. 
  • On 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.

1998-2000:  Work to Create a Native Hawaiian Bank

  • NPK 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.
  • A business plan and charter was submitted to the Office of Comptroller of Currency (OCCC) but was denied
  • Furthermore, local banks were hostile to the efforts and potential funders, including OHA and DHHL, were not supportive.
  • BOA has fulfilled half of the commitment and we are working now to compel them to complete the commitment and pay a late fee.
  • Gov. Ige has invited BOA to Hawaii to meet with NPK/HFLC to resolve this issue once and for all.