Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 5, 1 May 1994 — Hawaiians need their own bank [ARTICLE+ILLUSTRATION]

Hawaiians need their own bank

by The Rev. Moses K. Keale, Sr. Trustee, Kaua'i and Ni'ihau Last month I said that the Office of Hawaiian Affairs must be independent in administering Hawaiian assets. OHA commissioned a reputable international management consultant firm, Grant Thornton, to investigate the feasibility of establishing a Hawaiian financial services loan company

(FSLC). They reported, "A finaneial institution to address the unmet needs of the native Hawaiian eommunity is a critical part of the movement toward sovereignty and eeonomie selfreliance." The two-volume report provides a comprehensive strategic business

plan for identifying the financial needs of the Hawaiian people and a method to satisfy them. An FSLC is a type of institution "that does not currently exist in Hawai'i, either in structure, or in philosophy." Its mission is to "profitably deliver financial services whieh are necessary to develop the full eeonomie potential of the native Hawaiian community... (whieh) will be the foundation upon whieh the native Hawaiian community will build its eeonomie future." The FSLC would initially provide quality loans to selected customers emphasizing the following types of loans: residential real estate, land purchases, construction, bridge capital, improvement fee purchases, student loans, FHA loans, Hawaiian homestead loans, Veterans Administration and Hula Mae. The plan clearly identifies Hawaiian housing needs and how an FSLC ean assist in satisfying Hawaiian beneficiaries' needs. Through this FSLC and OHA's contribution of between $10-20 million, we could create a financial institution whieh could leverage these monies to make available more than $60 million for the purposes outlined. Most importantly, this would be a Hawaiian institution, dedicated to our own needs. Although there are costs associated with the operations of this type of institution, those costs are offset by its projected cash profits and the extra value that it produces through direct community

involvement, increased beneficiary usage, and philosophical community presence. A Hawaiian-owned, Hawaiian-operated FSLC could. as a matter of policy, adopt rules and regulations whieh would provide for a different set of qualifications to issue loans to people who would not otherwise qualify under normal conditions, so that they may also have the oppommity to ownor improve their

own home. As this FSLC matures and expands its operational activities, it will also gain the support and interest of the non-Hawaiian business community. This wider eommunity support is seen as a positive step in the recognition by business in Hawai'i and the nation of the

Hawaiians' growth toward greater eeonomie leadership. We should have built this institution several years ago! If we had acted with true visionary insight, as we did more than five years ago when we established the Native Hawaiian Revolving Loan Fund program, we would have already had an FSLC in plaee and operating by the time we received the $100 millionplus in past-due ceded lands revenues from the state. Let us not continue to demonstrate that we are a ward of the state or that we are willing to imitate the state's many mistakes in our eeonomie operations. This FSLC ean be established on fertile grounds. If we trust in our instincts and ask for the proper guidance from Ke Akua, our greatest dreams ean and will be fulfilled. I believe that this step is pono. I believed that the establishment of the Native Hawaiian Revolving Loan Fund was pono and it has proven so. 1 believed that our OHA Education Foundation was pono and the board established the foundation. but it has not yet born fruit because some on the board have weakened in their commitment and faith. I believe that there are no magical moments, just pono opportunities. We must act on the opportunities and trust in Ke Akua and the wisdom of our ancestors. Next month I will give you an update on the status of these projects and why they haven't moved.