STAR-BULLETIN FILE
City Bank employees George Brown and Molina Gomez, right, were among those holding signs during a downtown rally in May protesting Central Pacific Bank's hostile takeover attempt. City Bank has now asked the state legislators for assistance.
Central Pacific calls
CB plea to legislators
‘inappropriate’Lawmakers say they don't
want to interfere with
the regulatory process in
the proposed bank takeover
The parent company of Central Pacific Bank says it was inappropriate for the parent of City Bank to ask legislators to speak out against its proposed takeover.
Several legislators agreed they should not be interfering in a matter that is before an administrative panel of the state government, the division of financial institutions in the department of Commerce and Consumer Affairs.
"I would probably leave this to the administrative branch," said Rep. Scott Saiki (D, Moiliili-McCully), majority leader in the House.
Legislators are always asked to lend their support on one side or the other of issues, he said, and the reaction depends on the individual legislator. But if something is properly before a state agency, he feels it is best for him to stay out of it, he said.
Central Pacific Financial Corp., which owns the 24-branch Central Pacific Bank, has been trying to gain control of CB Bancshares Inc. since March and is pursuing a hostile takeover aimed directly at shareholders of the parent of 22-branch City Bank.
CPF is offering a mixture of CPF stock and cash worth about $280 million, depending on the price of CPF shares.
Its proposal has been submitted to the commissioner of financial institutions, declared complete and opened for written public comment. Those comments are due by the end of the day Friday.
CB Bancshares sent letters to legislators Monday, asking them to ask the commissioner to deny the CPF application or at least start a public hearing process. One letter was signed by City Bank employees who live in each legislator's district, saying they were worried about their jobs. Another was from CB Bancshares' top executives, saying 200-plus jobs will be lost if the merger takes place.
"We feel it is inappropriate to put political pressure on the (division of financial institutions) and we are confident they will make a fair decision based on the facts," said a Central Pacific spokeswoman, Ann Takiguchi.
"We have been working diligently with the (division) to demonstrate the benefits of the proposed merger and will continue to do so throughout the public comment period," Takiguchi said.
"As we have stated before, we believe that the proposed merger will create a stronger Hawaii-based bank that will be better able to compete with Hawaii's larger financial institutions," she said.
"We have repeatedly stated that we are looking to expand into communities where neither bank currently serves, which we feel would be in the best interests of customers, businesses and Hawaii," she said.
Takiguchi did not directly address the job-loss question, but CPF earlier said it expects 10 bank branches to close, in areas where both banks have offices, and while CPF said some jobs will be lost, it does not yet know how many.
City Bank estimated 200 lost jobs, but Central Pacific has said that may not be so, because it will be expanding and opening new branches.
Senate Minority Leader Fred Hemmings (R, Kailua-Waimanalo) said he doesn't plan to respond to CB Bancshares' approach. "We get lobbied all the time, and here's a bank that wants to achieve their goal and I don't find that inconsistent," Hemmings said.
"They listed people that live in my district. It's consistent with what everybody else does," he said. Government does play a role because banking is a regulated industry and the Legislature makes the regulations. Hemmings also worries about increasing government-protected monopolies, but he plans to do nothing in this case, he said.
House Minority Leader Galen Fox (R, Waikiki-Ala Moana) said he hadn't studied the package of papers left by CB Bancshares as of late yesterday, but he feels getting involved in a state agency's deliberations would be "a little touchy."
"If it is an activity that is properly before a body of the administrative branch, it's inappropriate," he said.
Another Republican, Sen. Sam Slom (R, Hawaii Kai), said he wears two hats and both of them tell him to stay out of it. As head of Small Business Hawaii, he said, he has to recognize that both banks are members and it has been long-standing policy for the organization to stay away from disputes between members.
"Under my other hat, as a state senator, I don't think it's appropriate to get involved in an issue in which, to my understanding, there's a state investigation," Slom said.
He said he can respond to anyone's questions or concerns, but it is wrong to take a stand at this stage in the proceedings. "I'm a free-market guy. The less government you have and the less government intervention there is, the better," Slom said.
House Speaker Calvin Say (D, Palolo) did not return phone calls. Say is on the board of directors of CB Bancshares.
