Chase assesses risk, closes suspected accounts

Banks have a responsibility under federal law to deny account services to customers who are at risk for funding terrorism, money laundering, or evading economic sanctions.  Banks can’t allow customers to send money to countries that lack safeguards against such activities either.

Accordingly, JPMorgan Chase has closed an unspecified number of accounts that are at risk for abuse or criminal behavior by customers who are, according to the Michigan chapter of the Council on American-Islamic Relations, Muslims or Arabs.

The Arab-American Civil Rights League also alleges 50 “improper” account closures by banks such as Flagstar, Charter One, and Comerica.

Opponents of such bank closures would be better served by proposing changes to federal law rather than threatening lawsuits against banks that are simply carrying out their duties under the existing rules.

From the Detroit News:

Muslim, Arab-American groups say banks closing accounts without explanation

• Mark Hicks, June 13, 2013

Two groups are seeking answers to what they say is a growing practice of Muslim and Arab-American groups having their bank accounts closed without cause or explanation.

The Council on American-Islamic Relations–Michigan is asking the Office of the Comptroller of the Currency, part of the U.S. Department of the Treasury, to investigate the complaints and the Arab-American Civil Rights League in Dearborn is pursuing a lawsuit against major banks.

“We see a type of pattern taking place in the Muslim/Arab community,” Dawud Walid, executive director of CAIR–MI, said Wednesday. “Bank accounts are being closed with no real justification … so it appears on the surface that there could be some sort of bias involved.”

One of the latest reported incidents, according to CAIR–MI, involved Alif Arabic, a business described as teaching Arabic to American citizens online. Officials there were notified May 30 by JPMorgan Chase their bank account would be terminated within 10 days. JPMorgan Chase officials did not detail why, according to the letter.

When an Alif Arabic employee asked the bank for clarification, they were told an analytical tool “alerted them that Alif’s account could pose a possible risk,” the letter read.

Walid said such a move could suggest discrimination based on religion and ethnicity. “We need answers and the bank is not giving answers,” he said.

Emily Smith, a JPMorgan Chase spokeswoman, said privacy reasons prevent the company from discussing details of its customer relationships. However, “on occasion, Chase determines it can no longer maintain a customer’s account but those decisions are not based on the customer’s religion, ethnicity or any other similar basis.”

Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency, said: “We have just become aware of the letter and have not had a chance to review. We will look into these allegations.”

Meanwhile, the Arab-American Civil Rights League plans to file a lawsuit after nearly 50 incidents of individual and business accounts being closed.

The group earlier this year asked the U.S. Department of Justice to investigate and launched a hotline for complaints after some area residents were notified by Huntington National Bank and other institutions their accounts were terminated without explanation.

That affected professionals and others who believed they acted lawfully, said Nabih Ayad, the league’s board chairman.

“It’s just a shame this continues to happen. It’s not fair to the community,” he said. “These sort of circumstances, they’re basically telling Arab Americans: ‘You’re not at the same level or beneath the average American”…

H/t to Creeping Sharia for sending this over.