Everyone Acts Small in Local Banking

Unlike the Mainland, even big guys want to be ‘community banks’ here

Everyone Acts Small in Local Banking

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Dennis Tanimoto, president, Hawaii Credit Union League

A segment of the banking sector that is not well recognized are the nonprofit credit unions.

Dennis Tanimoto, president of the Hawaii Credit Union League, says the credit unions are aware of the potential for new customers in the wake of national mega-bank scandals and woes. But he insists that he and the 90 credit unions in his association are not interested in capitalizing on that turmoil.

“We are just trying to hunker down and serve our existing members well,” he said. “We are not out to steal customers from anybody else or take advantage of the opportunity. But as someone said,” he chuckles, “never waste a good crisis.

“We just want to swim in our own lane. We’re not involved in these exotic kinds of lending and commercial finance that got other banks in trouble.”

Echoing what Hawaii National’s Luke says, Tanimoto describes an “Island-style” relationship between the smaller institutions and the big banks.

“The relationship that banks and credit unions have in Hawaii is a very special one,” Tanimoto said. “On the Mainland, the banks consider credit unions to be competition. In Hawaii, for the most part, the banks consider credit unions to be valued customers.”

In effect, the banks see the credit unions as “wholesale customers,” Tanimoto says.

One of the first big banks to recognize that possibility was Bank of Hawaii. “Then others saw the light,” Tanimoto says.

That point was emphasized by Bank of Hawaii President Peter Ho, who says in an e-mail that the bank has always valued good relations – not just with their customers but with other local financial institutions.

“Our bank’s culture has always been very much that of a community bank, with customer relationships being very important,” Ho says. “We take the time to know our customers and understand their needs. We’re focused on our local markets and our employees participate in community activities.

D.B. “Nick” Griffin, state commissioner of financial institutions

“This is our home.”

Clearly, BOH watched the example set by its neighbor across Bishop Street, First Hawaiian Bank. Under the leadership of the late John Bellinger and later under his successor, Walter Dods, First Hawaiian made nearly a fetish of being involved deeply in the local community, from sports and culture to politics itself.

At the end of the day, says the state’s Griffin, the key is not whether a bank defines itself as a community bank or something else. Instead, as a customer or depositor, study whether your institution can meet your needs and protect your deposits; that is, whether their deposits are federally insured.

“All the banks in Hawaii, by mode of operation and tradition, are community banks in the good sense,” Griffin said.

 

 

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