Starbulletin.com



Judge indicates he will
dismiss suit challenging
BofA-FleetBoston merger


A federal judge said yesterday he likely will dismiss a lawsuit brought by Native Hawaiians against the Federal Reserve Board seeking to halt Bank of America's merger with FleetBoston, but said the board should consider their concerns.

U.S. District Judge David Ezra said he will issue a ruling today or Friday, but indicated he believes he lacks jurisdiction. He said if he had the authority, he would not hesitate exercising it.

Ezra agreed with the three Native Hawaiian plaintiffs that Bank of America has not met its lending commitments to them, and strongly urged the board to take their concerns into consideration in deciding whether to approve the merger.

"I'm not prejudging the merger issue," he said, "but the record is clear Bank of America made commitments that have not been kept."

The lawsuit claims that Bank of America has not complied with commitments made on two occasions, including one in 1994, to provide tens of millions of dollars for loans and low income housing in Hawaii.

"It appears to me that what the plaintiffs are concerned about is the abysmal record of Bank of America in fulfilling its commitment," Ezra said.

Kit Wheatley, assistant general counsel for the Federal Reserve, argued that the board lacks enforcement authority. "We can't go to Bank of America and impose penalties," she said.

But Ezra, addressing Wheatley by video conference, said, "You say the board is impotent. I say the board made itself impotent. The board should say 'If you don't honor your commitment, we won't approve your merger."'

The board chose not to do more than accept bare commitments from Bank of America, Ezra said.

"The board has another opportunity to enforce those commitments," he said. "I hope they will take their obligations seriously.

"The situation that exists here is an embarrassment," he said. "This lawsuit is a cry for help. There is no other way they could get someone's attention. They certainly got my attention."

Ezra said if he issued an order that likely would be summarily reversed, it would build up the plaintiffs hopes only to have them dashed. "I won't be a party to that," he said.

"These individuals are deserving of respect and deserve to have their message heard in a meaningful way," he said.

The judge said he hopes that if he dismisses the lawsuit, it will not be taken as a signal the case is without merit.

Eric Seitz, the attorney for the plaintiffs, said he believes the court does have jurisdiction and that if Ezra rules against him, he will have to talk to his clients about an appeal to the 9th U.S. Circuit Court of Appeals.

But Seitz noted that by the time the appeals court would hear the case, the Federal Reserve will have already taken action. Wheatley said the board expects to make a decision in two or three weeks.

Wheatley argued that if the merger is approved, the plaintiffs could appeal. But Seitz said he doesn't believe his clients would have standing to appeal that decision in the federal appeals court in Washington, D.C., where the decision will be made.

Hooipo Pa, one of the plaintiffs and also an attorney, said she believes Ezra "went as far as he could go." She says she lost her Hawaiian homestead plot at Anahola, Kauai, because she was unable to secure a loan to build on it.

Bank of America began a lending program for Hawaiian Home Lands homesteaders in 1994 after the Hawaii Fair Lending Coalition accused it of discriminating against Hawaiians in its lending practices.

In response, the bank said it would set aside $150 million for loans to homesteaders, and $30 million for low-income housing on Kauai. The commitment was also a condition of Bank of America's 1998 merger with Nations Bank, according to Ian Chan Hodges, the Fair Lending Coalition's spokesman.

--Advertisements--
--Advertisements--


| | | PRINTER-FRIENDLY VERSION
E-mail to Business Editor

BACK TO TOP


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Feedback]
© 2004 Honolulu Star-Bulletin -- https://archives.starbulletin.com


-Advertisement-