Cultural ties enable Hawaii credit unions to thrive

It may come as no surprise that the cooperative structure and “people helping people” philosophy of credit unions thrive in the state of Hawaii, where the Aloha Spirit is not just a saying, but a way of life.

Hawaii has long embraced credit unions, and their success continues to grow. In 2016, credit unions controlled 18 percent of deposits in Hawaii, compared to 8.7 percent nationally. Membership increased by 1 percent last year to nearly 878,000 in 2017. In a state of 1.429 million residents, more than 61.4 percent are served by credit unions.

The success of credit unions is uniquely tied to the rise of two sweet crops that were once essential to Hawaii’s economy. Long before Hawaii became a state, both pineapple and sugarcane became booming industries throughout the islands. In the early 1900s, laborers from Japan, China, Korea, the Philippines, and many other countries came to work in the fields.

Plantation workers had no credit and minimal income, so banks were quick to deny them loans. Groups of friends and neighbors formed financial co-ops based on the Japanese money-pooling concept of “tanomoshi.” Tanomoshi was an informal, word-of-mouth tradition in which plantation workers would meet monthly to contribute a predetermined amount. Members would take turns receiving their payout, until everyone had a chance to benefit.

While the first tanomoshi groups were bound by a shared ethnicity or culture, they soon evolved into circles of individuals that had common jobs or interests. From those groups, credit unions were born.

In 1936, a group of government employees chartered the first credit union on Oahu, the Hawaii Territorial Employees FCU. Today, we are known as the Hawaii State Federal Credit Union, serving government workers, select employer groups and their families.

Credit unions continue to operate in the islands on the basis of helping every member succeed financially. Members, even those of modest means, know they can count on credit unions to be there for them — to offer fair rates, minimal fees and resources that help them reach their financial dreams.

Andrew Rosen

Andrew Rosen

Hawaii State Federal Credit Union is one of Hawaii’s largest credit unions, serving more than 96,000 members. Rosen became President & CEO of Hawaii State FCU in 2012 ... Web: Details