Judge denies Native Hawaiian group’s bid for promised home loans

Na Po’e Kokua failed to show it represents individuals seeking to recover loan funding meant for Native Hawaiian homelands.

by Candace Cheung, Court House News, February 17, 2023

HONOLULU (CN) — Despite impassioned pleas from Native Hawaiian activists, a Hawaii District Court judge dismissed a lawsuit filed by a Hawaiian housing advocacy nonprofit seeking decades-old promised home loans from Bank of America.

Na Po’e Kokua sued Bank of America in 2022 to secure millions of dollars promised nearly 30 years ago for home loans on Native 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. Native Hawaiians make up a disproportionate percentage of the state's houseless community.

The group, represented locally by Honolulu attorney Frederick Arensmeyer and by Florida attorney Jim Lewis, claimed it properly represented the interests of Native Hawaiians. Bank of America countered that if it had a commitment to provide mortgage loans to Native Hawaiians — a point the bank disputes — it did not have a commitment to Na Po’e Kokua.

U.S. District Judge Michael Seabright, a George W. Bush appointee, ruled late Thursday that Na Po’e Kokua failed to establish either organizational standing, which allows an organization to bring claims if it can demonstrate frustration of its mission and diversion of its resources to the issue, or associational standing to bring the complaint on behalf of its Native Hawaiian members.

Seabright focused on Na Po’e Kokua's lacking associational standing plea, clarifying the need to establish individual claims. “As to the first prong, plaintiff acknowledges that it has not shown how its members would otherwise have stood to sue in their own right. The second prong, however, has been established — the deprivation of mortgage loans to native Hawaiians is germane to Nā Po‘e Kōkua, “whose stated purpose is to assist native Hawaiians with housing and related matters.”

At a hearing in January, Seabright seemed to be guiding the organization toward the option to amend the complaint and leaves the option open to the group in the ruling.

Lewis said Na Po’e Kokua will continue their fight and remains hopeful.

“We believe that we can show that Native Hawaiians have standing and that NPK is the appropriate authority to do that. The judge has given us the ability to go back and what we’ll have to do is sign up some of these individual folks,” he said. “We think we’ll be able to establish the legal standing and we’ll be back very soon and file an amended complaint.”

According to the 106-page lawsuit, first filed in May 2022 — 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 the pledge was “an aspirational goal, not a binding contract.”

Na Po’e Kokua also details a history of discriminatory lending practices 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 in violation of the Fair Housing Act.

Bank of America has also been named in a separate class action in which the plaintiffs claim the bank later wrongfully foreclosed on Native Hawaiians who were able to obtain home loans.