Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 9, 1 September 1994 — Bank of America responds to discrimination report [ARTICLE]

Bank of America responds to discrimination report

b_y Patrick Johnston Miehael- Liu, vice president of fair lending and government affairs at the Bank of America, said recently that, contrary to the impression left by an article in last month's Ka Wai Ola O OHA, Bank of America is conducting its business no differently than other banks in the state and, in fact, has been very proactive with regard to lending to native Hawaiians and other minorities. Earlier this year, the Bank of America was accused of discriminatory lending by a citizen's group calling itself the Hawai'i Fair Lending Coalition. The Office of Thrift Supervision later issued an order requiring the bank to make efforts to increase its lending to native Hawaiians and Filipinos as a condition for allowing Bank of Amenea to merge with Liberty Bank. (See the August issue of Ka Wai Ola O OHA.) As an example of the bank's proactive policies, Liu described its loan program for Hawaiian homesteaders. The bank has committed $150 million in financing for home construction on Hawaiian home lands. Liu says BofA is now working closely with the Department of Hawaiian Home Lands in the development of homestead lots. "We want the department to know that if homesteaders need permanent financing they have it, subject to the qualifications of the loan program." Liu says the commitment to provide the financing

was made well before the OTS hearing and applieations have already been approved. "This is not just a verbal agreement. We have approved a number of applicants and we're actively seeking individuals who satisfy eligibility requirements." Liu also pointed out that the bank has been facilitating negotiations between the Department of Agriculture, DHHL, and the private sector to develop infrastructure on Hawaiian home lands. Another example of Bank of America's fair lending policies, Liu says, is Neighborhood Advantage, a BofA program whieh provides home financing for low- and moderate- ineome borrowers who already have a high debt load. Under the plan, monthly debt payments could run as high as 45 percent of an individual's ineome and the borrower would still be eligible for the Bank of America loan. Liu says most banks will only go as high as 38 percent. The program also takes a more flexible approach when considering an individual's credit history. If a potential borrower has little or no credit history or if their record was tarnished at some point in the past the bank will look at things like canceled checks and paid bills to prove creditworthiness. "Many companies only look at a credit bureau report," Liu explains. Liu was also concerned that the impression left continued on page 21

Bank of America

from page 1 by the article was that Bank of America had not satisfied merger conditions laid out in the OTS order and that the takeover was still pending. In fact, he said, Bank of America had fulfilled OTS requirements and the merger had gone through. He also questioned whether, as had been stated in the KWO artiele, OTS had "accepted" the coalition's findings on Bank of America's lending practices. In the order issued by the OTS it said that the office had "eonsidered a protest to the merger application submitted by the Hawai'i Fair Coalition." A spokesperson for OTS said this means that the office consid-

ered the protest "substantial because it met certain regulatory criteria." This criteria included a stated reason for the protest and facts to support the protest. However, OTS stressed it does not mean that OTS necessarily felt the protest had merit, only that it was worth hearing. "We took it under review," the spokesperson said. Some of the accusations directed at the bank stemmed from its putting native Hawaiians and Filipinos in the same "Asian /Pacific Islander" group as other Asians like Chinese and Japanese. This resulted in a loan record where a high loan rate to Chinese and Japanese masked a low rate to Hawaiians and

Filipinos. According to Chris Van Bergeijk, OHA eeonomie development specialist, Bank of America collects ethnicity data in a manner similar to other banks and one whieh reflects the practice of the federal government's census classifications. Liu remains confident about the future of the bank's relations with the Hawaiian community. "I think we are going to see a growing relationship in terms of housing and eeonomie development. And we hope to be more than just a partner. We want to be proactive and encourage the development of the Hawaiian community."