WASHINGTON-The credit union trade associations would have a much easier job if bankers in more states took the approach to credit unions that they do in Hawaii. Aside from being an island oasis for vacationers, it is also a break from the ordinary in terms of credit unions and banks. Hawaii State Federal Credit Union CEO Deborah Kim even termed the relationship "copasetic." In fact, the majority of Hawaii's 97 credit unions have relationships with the largest banks. Primarily Bank of Hawaii, but others have followed suit, in offering resources like check processing and ATM usage to credit unions like Hawaii State FCU, which has an agreement with the bank. "Hawaii is a very unique situation," Kim said. Bank of Hawaii Vice Chair of Retail Banking David Thomas explained, "I would characterize the relationship we have in the state as a combination of competition on one level and cooperation on another." He said about 70 credit unions have a banking relationship with Bank of Hawaii. Aside from check processing and ATMs, Thomas' institution also holds credit union operating accounts and actually processes transactions in their lobbies for credit union members. "We try to do what's right for the community instead of competing each other to death," he said. As an individual bank, Thomas said, Bank of Hawaii does not lobby against credit unions but, he added, the institution does belong to a number of banking trade associations. "We do have very cooperative arrangements with credit unions in Hawaii," Hawaii Bankers Association Executive Vice President Rodney Shinkawa agreed. He added, "It's not that we disagree with the national strategy," he said. In fact, HBA does want the large credit unions taxed and the association sent letters in opposition to the Credit Union Regulatory Improvements Act (H.R. 3579), but on a local level, it is not too active opposing credit unions. Given that there are only three state chartered credit unions in Hawaii, there would not be much point in trying to tax them either. Additionally, there are only six banks in the state, Shinkawa pointed out with $30 million in assets. According to an Oct. 8, 2004 article in the Pacific Business News that picked up on the bank and credit unions' cooperative nature in the island state, credit unions' combined assets are about $6.3 billion, not even as much as the third largest bank, American Savings Bank, at $6.5 billion in assets. Concerning the national agenda, Shinkawa said of the American Bankers Association, "I don't think they're happy but they haven't expressed displeasure with us either." Some on the credit union side are not pleased either with the state's banks and credit unions being so cozy. Kim said that some have called it "sleeping with the enemy," but she adds that on such a small island community, one is "quickly forced to get along and forced into certain relationships basically because it's too small to be fighting." In addition, she indicated that many resources are available on the mainland that are not – or were not until recently – available to Hawaiian credit unions. The arrangement is mutually beneficial. "They make some income off of us and.we use their system, if you will, and our members to get the benefit from that surcharge free," Kim explained. Bank of Hawaii has approximately 450 ATMs across the state. "Credit unions are viewed by many banks in Hawaii as valued clients as opposed to a fierce competitor," Hawaii Credit Union League President and CEO Dennis Tanimoto said. Credit unions fulfill the banks wholesale needs when retail lags, he said. HawaiiUSA Federal Credit Union CEO Karl Yoneshige agreed, "Banks see us more on a business level than on a philosophical level." The credit union/bank relationship has been this way for the 12 years Tanimoto has been with the league, he said, except for a period during the H.R. 1151 battle when the chair of Hawaii's largest bank also became the ABA chair. Yoneshige had a similar view. "In all the time I've been here, we have had a cooperative business-type relationship with one bank in particular: Bank of Hawaii," he said. He has been with the league a total of 16 years and served as CEO for two and a half. However, Tanimoto cautioned, the cooperation is not as easy as it looks. "We have to nurture it obviously because it doesn't come automatically," he said. Yoneshige said Hawaii's small town atmosphere helps this ongoing process. Additionally, most of Hawaii's credit unions are not very large, though there are a lot. Hawaii State and HawaiiUSA, however, are included among the state's 10 banks, according to the Pacific Business News, at $728 million in assets and $688 million, respectively, NCUA data shows. "It would be difficult for others on the mainland to replicate what we have," Kim concluded. Particularly when credit union membership has grown 22.4% to 717,888 in the last five years, according to data cited by Pacific Business News. [email protected]