After 100 Years, First Hawaiian Bank Closes its Lāna‘i Branch

By Anthony Kaauamo

The impending closure of First Hawaiian Bank’s (FHB) Lāna‘i branch, slated for June 28, 2024, has raised significant concern within our community. Originating as Bank of Bishop and Co. in 1924, this institution has been a cornerstone of Lāna‘i’s financial landscape for nearly a century. With the planned closure, the island will be left with only Bank of Hawaii and Lāna‘i Federal Credit Union, marking a significant shift in our community’s banking landscape.

The decision, which was communicated to the community in early March, has heightened worries among Lāna‘i’s residents, especially the kūpuna, many of whom face challenges with digital banking platforms. In a community where personal interaction is paramount, the loss of FHB’s physical branch presents difficulties for those relying on in-branch banking services. Furthermore, our Filipino and Kosraean communities, many of whom depend on direct communication for banking services, will encounter additional challenges. The closure of FHB’s branch not only limits banking options but also affects the vital social interactions that are integral to the well-being of our island’s diverse population.

First Hawaiian Bank Statement

Lāna‘i Today sent a series of questions to First Hawaiian Bank on March 6 regarding the planned closure of its Lāna‘i branch. The bank released a public statement on March 9 and provided another on March 29, neither of which directly addressed the specific questions posed by the newspaper. Below is the bank’s statement from March 29.

“We continue to prioritize supporting our customers and staff on Lāna‘i with this transition. Our teams are engaging with individuals who have requested personalized assistance to navigate next steps, whether it involves training on our digital platforms or facilitating a smooth transition to another financial institution on the island.

We encourage customers to reach out to the branch with any questions or call (888) 844-4444 for further assistance. We made the decision to share this information early, understanding the importance of giving everyone ample time to plan ahead and ensuring that any questions or uncertainties can be addressed with care and consideration.”

Community Response and Efforts

Following the announcement of the bank’s impending closure, the Lāna‘i community quickly mobilized, driven by a collective determination to explore all possible avenues to keep the bank operational. Upon learning of FHB’s impending departure, Lisa Grove was immediately concerned about the repercussions for the community. She reached out to Shelly Barfield, initiating a series of discussions and brainstorming sessions to address the situation. They were acutely aware of the potential hardships for Lāna‘i’s residents, especially the kūpuna and those for whom English is a second language.

For these community members, the bank was more than a financial institution; it was a place of social interaction, trust and support, serving as a vital source of face-to-face interaction and guidance. The kūpuna, many of whom face challenges with digital banking platforms, rely on in-person assistance with their banking needs, finding security and support in the staff’s familiarity and kindness. The bank’s local employees, deeply integrated into the community, had built trusting relationships with their customers, making the closure a significant personal and collective loss.

Driven by these concerns, Lisa reached out to Senator Brian Schatz and Representative Jill Tokuda. Despite being in the midst of a critical budget week in Washington D.C., both Sen. Schatz and Rep. Tokuda responded within half an hour and immediately engaged with FHB, exploring alternatives to a complete branch closure. They proposed various solutions, such as reducing operational hours, maintaining ATM services, or setting up a smaller branch or service point within an existing local business. Their goal was to retain some level of banking service on the island, acknowledging the essential role these services have in the daily lives of Lāna‘i residents.

Meanwhile, Lisa and Shelly mobilized to organize a community demonstration, hoping to publicly express the collective concern and opposition to the closure due to the community’s reliance on the bank and the deep-seated desire to preserve it.

As discussions with FHB continued with Sen. Schatz and Rep. Tokuda, it became clear that the bank would not reconsider its closure. FHB had declined all proposed solutions, leaving no alternatives for keeping the branch operational. This decision, made independently as a business move, reflected the stark reality that corporate choices can unilaterally end services, deeply impacting communities like Lāna‘i.

Lisa and Shelly reassessed the feasibility and potential impact of holding a demonstration. Given the swift and irreversible decision by FHB, they questioned whether a public gathering would be an effective use of the community’s time and energy. The realization that the bank’s decision was final, despite the community’s outcry and the efforts of their congressional representatives, led to a difficult decision to call off the planned demonstration.

“Everyone says to me, this is how Hawai‘i used to be,” Lisa said. To visitors from other islands, Lāna‘i represents a bygone era of Hawai‘i, reminiscent of a time when community and personal connection were everyday occurrences. FHB’s 100-year presence on Lāna‘i had played a part in this, being one of the places where our tightly knit community regularly gathered, caught up with one another, and supported each other. As Lisa pointed out, the bank’s closure symbolized the disruption of a central hub for the island’s social interaction and identity.

The closure of FHB on Lāna‘i became a poignant reminder of the delicate balance between progress and preservation, the value of local institutions, and the profound impact of such losses on small, close-knit communities.

Kūpuna and Elder Kama‘āina Responses

The closure of First Hawaiian Bank’s Lāna‘i branch has resonated deeply with our island’s kūpuna and elder kama‘āina, unearthing concerns and emotions rooted in decades of personal and financial history. These long-standing residents, some of whom have been FHB customers since the 1960s, express a blend of disappointment and worry over the impending changes, particularly the tangible shifts in managing personal documents and assets. One resident described transferring important documents from a secure bank safe deposit box to a Tupperware container at home due to the bank’s closure. Similar stories echoed across conversations with elders who preferred to remain unnamed, sharing a sense of disruption in their banking routines and personal security.

The transition has been fraught with challenges. The news, initially spread through the island’s “coconut wireless,” compelled many to verify the facts through personal visits to FHB. The emphasis of moving towards digital banking looms large over those who have relied on the tactile familiarity of in-branch services, revealing a significant gap in accommodating kūpuna preferences. This shift to digital platforms, mirroring a growing trend in various industries, disrupts traditional service models, often leaving those less tech-savvy at a disadvantage. Despite FHB’s public assurances of providing assistance for customers to transition to online and mobile banking, the reality felt by many on the ground diverges sharply. An elder’s admission, “I don’t use a computer... why am I going to learn now?” captures the prevailing skepticism and resistance to digitally exclusive services.

Many elders faced the challenge of swiftly adapting to banking changes due to the closure’s short notice. The tight 4-month deadline forced them, especially those with off-island children, to quickly arrange for account closures and transitions. “They should have given us more time, at least 12 months,” some remarked while detailing the strain of coordinating with family members who needed to return to assist them. Concerns were also raised for unsupported elders with some saying, “It’s sad for those without family to help them. Hopefully, someone is offering the assistance they need.”

Beyond the practicalities of banking and financial management, the closure touches on deeper themes of community, identity and belonging. Elders lament the loss of social interactions and the familial atmosphere in local banks, where staff, known personally to them, provide a touchstone of familiarity and respect. This loss contributes to feelings of loneliness among the elderly population who value the socializing aspect of their bank visits. The prospect of losing these connections speaks to a broader narrative of change and loss within the community, as elders mourn not just the bank’s closure but the erosion of a way of life that prioritized personal connection and mutual support.

Bank of Hawai‘i Response

As First Hawaiian Bank prepares to close its Lāna‘i branch, Bank of Hawai‘i (BoH) is positioning itself to address the island’s banking demands. With a legacy of 127 years in Hawai‘i, including 27 years on Lāna‘i, BoH is assessing its strategy to fill the gap left by FHB. BoH CEO Peter Ho detailed these plans in an interview, expressing readiness for the upcoming challenges. “The next several months is going to be kind of intense for us, which is fine. We’re up to the challenge and the team’s excited. We’re looking to be helpful. We’re looking how to be supportive longer term,” said Ho.

The bank has experienced a significant increase in new customers since FHB’s announcement, described by Ho as a “30-fold increase.” To manage this surge, BoH has extended its operating hours and has brought in additional staff from other islands. “In the short term, we’re going to send staff from other islands into Lāna‘i. Pūlama Lāna‘i has been kind enough to help us with workforce housing. Obviously, that’s an additional expense but it is what it is,” Ho said, “Our usual hours are 9:00 a.m. to 4:00 p.m. but we’re extending them to 8:00 a.m. to 5:00 p.m. That’s an additional cost as well. But what that does is, I think it gives customers more time to get done what they need to get done. And then it also helps to relieve the operational burden and the stress levels on our teams.”

Touching on the financial realities of serving smaller, rural communities like Lāna‘i, Ho stated, “And so we are in lots of places that are not the biggest, most profitable marketplaces in the world. Obviously, that’s not what we’re about. We’re about serving the islands.”

In line with this commitment, BoH announced the Branch of Tomorrow initiative in March. This extensive program aims to modernize and improve the banking experience, with Lāna‘i earmarked as one of the five locations for these upgrades over the next two years. The initiative began with the opening of the ‘Ele‘ele branch on Kaua‘i, featuring a suite of advanced services like a technology-focused Teller Bar, private Pili consultation rooms, continuous ATM access, and extended hours, all customized to meet the distinct needs of each community. Lāna‘i’s Branch of Tomorrow will be specifically designed to address and support the unique requirements of the Lāna‘i community, ensuring a tailored banking experience. Ho added, “We try to keep these branches within the design element of their location, and so they won’t all look exactly the same because we want them to be appropriate to the communities that they reside in. So, yeah, we definitely are going to be investing into Lāna‘i, but it won’t look exactly like ‘Ele‘ele. It will look like its own, what is appropriate to it.”

As Bank of Hawaii prepares to fill the void left by First Hawaiian Bank on Lāna‘i, Peter Ho noted the community’s positive response: “Everyone that we’ve spoken to has been thankful and supportive of our decision to remain in market on island.”

Lāna‘i Federal Credit Union Response

Since its inception in 1938, Lāna‘i Federal Credit Union (LFCU) has been a steadfast financial pillar for the residents of Lāna‘i, offering essential banking services tailored to the local community’s needs. Under the leadership of CEO/Manager Charity Figuerres, who took the helm in 2015, LFCU embarked on a transformative journey, evolving from a conservative institution into a dynamic entity ready to address modern financial challenges.

“So, when this news came out, I was like, okay, what am I going to do? Our commercial relationship is pretty deep with First Hawaiian,” said Charity. The end of FHB’s operations on the island posed significant challenges for LFCU, particularly affecting daily depository transactions and cash handling services. Furthermore, this situation disrupted LFCU’s initial plans to implement an ATM service in partnership with FHB.

This situation hastened LFCU’s move to introduce new services like checking accounts with no monthly fees, interest earnings, and complimentary first-order checks, alongside ATM/debit card and bill payment services. These initiatives were part of a broader strategy to transition LFCU into a full-service financial institution.

LFCU’s current location is facing space limitations due to growing service demand. Charity has approached FHB regarding the acquisition of their property at 7th and Lāna‘i Ave. Although FHB has expressed interest in using this property to benefit the Lāna‘i community, they have not committed to specific actions or plans.

Charity’s dedication to Lāna‘i’s community is evident in her and her team’s efforts, which go beyond regular office hours. They engage deeply with the community, especially the kūpuna affected by the banking changes. Charity has been instrumental in these efforts, spending hours in personal sessions to guide them through the banking transition, ensuring they feel supported and comprehend their options. “And when they come back and they’re like, ‘oh, thank you for this. I could sleep last night knowing this is what’s going on, and you helped me to understand how I’m going to do it.’”

Their interactions extend beyond the credit union, touching everyday life in Lāna‘i City. “I mean, we go to the store now, it’s like, I can’t go to the post office without somebody asking me something, and I have to stop. I’ll take the time. Come and see me. Call me. Let me walk you through what you need to do.”