Judge may deny Hawaiians' bank case
By Vicki Viotti
Advertiser Staff Writer
A federal judge appears poised to rule today or tomorrow against a group of Native Hawaiians in their demand that the Federal Reserve Board deny Bank of America its latest merger request until it fulfills a 10-year-old commitment to provide $150 million in mortgage loans to Hawaiian homesteaders.
U.S. District Judge David Ezra said yesterday he'd take the case under advisement for a day or two, but he indicated he doesn't believe the court has jurisdiction to intervene in the bank's proposed merger with FleetBoston Financial Corp.
However, Ezra told the attorney for Federal Reserve Board, Kit Wheatley, that "the record appears to be pretty clear that they (the bank) made a commitment and that they haven't met that commitment.
"It appears here there's a wrong that has to be righted," Ezra said.
Mary Woller, a corporate spokeswoman for the bank, could not be reached for comment yesterday.
The suit was filed Feb. 6 by Momi Haili, Kahilihiwa Kipapa and Elizabeth Ann Ho'oipo Pa Martin. Martin, who represented the group in court yesterday, also filed an affidavit in which she said that the failure of Bank of America to provide financing contributed to the rejection of her mortgage applications submitted to various financial institutions beginning in 1998. In 2002, she said in the statement, she lost her Hawaiian Home Lands lease.
Ezra questioned whether Martin would have legal standing to press the suit since she had not applied to Bank of America for the loan. But Eric Seitz, her attorney, said that the bank had sold all its Hawai'i branches by then and was not part of the lending program offered through the state Department of Hawaiian Home Lands.
The conflict began in 1994, when the Hawaii Fair Lending Coalition charged Bank of America with discriminatory lending practices toward customers of Hawaiian and Filipino ancestry. A federal hearing on the complaint led the bank — then negotiating its merger with Liberty Bank — to settle by making the lending commitment to Native Hawaiians.
The most critical question for the judge yesterday was whether the federal Community Reinvestment Act gives the reserve board power to enforce the commitment.
Seitz argued that it does, and that the District Court is the place to raise the challenge. But Ezra seemed to side with attorney Wheatley who, speaking through a videoconference link, said the board had no enforcement power.
Wheatley said Hawaiians should wait for the reserve board to rule on the latest merger in the next few weeks and if the merger is approved, challenge the decision in Washington, D.C., appeals court.
Seitz said after the hearing that success using that approach seems doubtful; an appeal would have to prove that the merger decision was faulty on the basis of the lapsed Native Hawaiian commitment.
"They're not going to side with the poor people, non-white people," he said. "They never have, and never will."
Martin felt at least gratified that Ezra "was pretty strong in what he was telling them."
"We need justice in this," she said.
Reach Vicki Viotti at vviotti@honoluluadvertiser.com or 525-8053.
