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Tuesday, January 24, 2023
30 Years Later: Will Court Toss Out $150M Grift Against Bank of America?
By Court House News @ 10:35 PM :: 1955 Views :: DHHL, Hawaii History

Native Hawaiians continue fight against Bank of America for homeland funds

Almost three decades since the bank first pledged to make $150 million in home loans available for Native Hawaiians, a Maui-based nonprofit filed a complaint seeking the funds which the bank has maintained it has already paid out.

by Candace Cheung, Court House News, January 23, 2023

HONOLULU (CN) — While affordable housing woes plague the nation, the housing crisis in Hawaii is especially exacerbated by absurd cost of living and limited housing resources, and no group in the state has experienced a more outsized disadvantage than it’s indigenous population.

Native Hawaiians have been increasingly priced out of their native lands, something that Native Hawaiian housing advocacy groups like Na Po’e Kokua have worked to remedy. The group filed a complaint in 2022 against Bank of America to secure the millions of dollars promised nearly 30 years ago for home loans on Hawaiian homelands. Managed by the Department of Hawaiian Homelands, the distribution of land to Native Hawaiians for housing, ranching, community and commercial purposes has been marred by setbacks due in part to the lack of loans available to Native Hawaiians by banks like Bank of America.

According to the 106-page lawsuit filed in May, 28 years after the initial 1994 commitment of $150 million in home loans over four years, Bank of America ended up abandoning its retail presence in Hawaii after only three years, during which only $3 million had actually been provided to Native Hawaiians.

The bank has since maintained that it has already fulfilled the entirety of its obligation to Native Hawaiians and, according to the complaint, claimed that the pledge was “an aspirational goal, not a binding contract.”

The suit also details a history of discriminatory lending practices in violation of the Fair Housing Act against Native Hawaiians by Bank of America since its establishment on the islands in the early 1990s, refusing them mortgage loans on both Hawaiian homelands and other Hawaii neighborhoods.

U.S District Judge J. Michael Seabright raised several issues in a Monday hearing for a motion to dismiss regarding the plaintiff’s standing as an organization to bring claims under the Racketeer Influenced and Corrupt Organizations Act and the Ku Klux Klan Act of 1871, and the statute of limitations for a matter that began decades ago.

The group's attorney, Jim Lewis, addressed concerns that the organization lacked standing, telling the court, “If not Na Po’e Kokua, then who? They are the only the organization that can come forward to fight. They are the best suited to stand up for Native Hawaiian rights. This is their last shot,” Lewis said, referencing disproportionate levels of poverty and homelessness that have troubled the Native Hawaiian population.

An attorney for the bank, Douglas Chin of Starn O'Toole Marcus & Fisher, argued that Na Po’e Kokua lacked standing to bring the claims as it did not did not experience direct injury, and that if a commitment for home loans had been made, it would not have been made to Na Po’e Kokua.

Chin also argued that the plaintiff does not name any individual members and would need to show that those individuals could sue in their own right for the complaint to continue on.

Both parties further acknowledged that regular statute of limitations had run out, but that the argument was now about whether these were extraordinary circumstances, given the long and continuous nature of the case. Na Po’e Kokua, the Department of Hawaiian Homelands, and multiple levels of Hawaii political leadership have become involved in the issue throughout the years.  

Lewis, appearing via Zoom from Florida, emphasized the validity of Na Po’e Kokua’s RICO claims and pushed for an evidentiary hearing where documents showing the history of the bank’s alleged fraud could be produced. Na Po’e Kokua is also represented by Hawaii attorney Frederick Arensmeyer.

The complaint and Lewis both cite an affidavit by a former Bank of America employee who claimed that, “After the merger with NationsBank, I believe BANA made a deliberate decision to create this false narrative stating that there was no commitment and if there was a commitment that BANA honored it, that is of course only if one existed, which it did not according to BANA.”

Seabright mentioned several times that he was sensitive to the controversial nature of the case in the context of ongoing Native Hawaiian struggles and was reluctant to outright dismiss it. He concluded the hearing by asking the parties to submit briefs regarding statute of limitations issues that could not be resolved during the hearing.

Brandon Maka’awa’awa, president of Na Po’e Kokua, said in an interview after the hearing that Bank of America should be held accountable.

“It’s not just about the bank not fulfilling a commitment, but anytime anybody, whether it’s a state agency, whether it’s a bank, or whoever, if they make a commitment to our people, we need to have the ability to hold them accountable, because relying simply on the state or a regulatory body to do this job is not productive. They lack the motivation to do this.”


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