State to not pursue bank for DHHL loans
HONOLULU (AP) — The Hawaii attorney general’s office won’t go after Bank of America for failing to provide $150 million in loans to build 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 and some borrowers not meeting qualifications.
The Honolulu Star-Advertiser reported Monday that an internal attorney general office memo says the state isn’t in a legal position to pursue the bank.
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.