HONOLULU The state attorney generals office wont go after Bank of America for failing to provide $150 million in loans for building houses on Hawaiian home lands.
HONOLULU — The state attorney general’s office won’t go after Bank of America for failing to provide $150 million in loans for building houses on Hawaiian home lands.
Bank of America had committed to the loans as a condition of its 1994 acquisition of Liberty Bank in Hawaii. Last year, Gov. David Ige wrote a letter to a bank official saying the bank continues to be delinquent on its four-year commitment to provide the residential mortgage loans on the home lands, which are public lands for those with at least 50 percent Hawaiian blood.
The bank says while it only made a fraction of the loans, it did fulfill its commitment — just not as originally conceived. The bank says it encountered challenges, including a lack of available lots to make loans in sufficient quantities and some borrowers not meeting loan qualifications.
An internal attorney general office memo says the state isn’t in a legal position to pursue the bank.
“As far as any changes on the issue re: BoA’s $150M Commitment. There have been no changes in our position— that there are no legal bases for the state to pursue BoA on its past pronouncements regarding loans to native Hawaiians,” wrote Deputy Attorney General Ryan Kanaka’ole to Maui County Deputy Prosecutor Peter Hanano.
While the memo was not intended to be made public, the attorney general’s office confirmed that it generally reflected the department’s position. The office didn’t respond to a question asking for elaboration on the legal rationale.
Bank of America provided about $13 million in loans and worked with the Department of Hawaiian Home Lands to find other ways to fulfill the commitment, including construction financing to build homes and providing startup funding for helping beneficiaries improve credit scores and save for a down payment, said Dan Letendre, a Bank of America lending and investing executive.
A Native Hawaiian community development nonprofit wants the bank to pay a penalty. Na Po’e Kokua representatives say it was their group’s actions in the 1990s that forced Bank of America to make the commitment after they uncovered discriminatory loan practices on Hawaiian home lands. Ian Chan Hodges, who is helping the nonprofit, said a penalty of upward of $400 million would be used to build homes on Hawaiian home lands.
