State Accepts Territorial Savings as Hawaii-Chartered Bank

DCCA Headquarters where the insurance division is located
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DCCA Headquarters

HONOLULU — The Department of Commerce and Consumer Affairs’ (DCCA) Division of Financial Institutions (DFI)today announced that it has approved Territorial Savings Bank to become a state-chartered financial institution.

Territorial Savings Bank has been a federal-chartered savings bank. It was organized first in 1921 as a mutual building and loan association.


“We are pleased that Territorial Savings Bank wanted to become a state-chartered savings bank,” DFI Commissioner Iris Ikeda Catalani said. “We understand the local market and provide guidance to our state-chartered institutions of best practices so that those institutions can continue to operate in a safe and sound manner. We note that during the financial crisis, Hawaii did not have any bank closures.”

As a state-chartered financial institution, Territorial will continue to accept deposits from the public and invest those deposits, together with funds generated from operations and borrowings, in one- to four-family residential mortgage loans and investment securities. Territorial also originates home equity loans and lines of credit, construction, commercial and other non-residential real estate loans, consumer loans, and multi-family mortgage loans.

One of the reasons banks seek a charter with the state is because of the local regulators. DFI understands Territorial’s business model and can provide a local context and insight to federal examiners when the bank is examined. Hawaii consumers will now be able to make complaints locally and rely on regulators who have a depth of knowledge of the local market.

This is the first bank in the islands to become state-chartered since the passing of Congress’ Dodd-Frank Act in 2010. The act provided many levels of consumer protection, including those at the banking level.

Territorial Savings Bank applied to convert from a federal chartered savings bank to a state chartered savings bank on Nov. 1, 2013. It has 28 full-service branch offices located throughout the state.

DFI ensures the safety and soundness of state-chartered and state-licensed financial institutions, and ensures regulatory compliance by state-licensed financial institutions, escrow depositories, money transmitters, mortgage servicers, mortgage loan originators and mortgage loan originator companies, by fairly administering applicable statutes and rules, in order to protect the rights and funds of depositors, borrowers, consumers and other members of the public.


Submitted by DCCA