The letter was addressed to the treasury department and six other agencies [Getty]
US lawmakers have signed a letter calling on the heads of several government financial agencies to tighten regulations on financial crimes and safeguard against the discriminatory de-risking of Muslim American bank accounts.
Senator Elizabeth Warren and Representative Ilhan Omar signed the letter along with nine other colleagues, calling for changes in financial regulations that banks adhere to.
The recipients of the letter include Secretary of the Treasury Janet Yellen and Chair of the Federal Reserve Jerome H. Powell, as well as the heads of five other government agencies.
“We write to ask your agencies to take robust action to modernize anti-money laundering and financial crimes compliance obligations to protect and promote equitable banking access for Muslim Americans and immigrant communities,” the letter reads.
In particular, the letter highlights the practice of de-risking, where banks terminate or restrict access to accounts.
The letter notes that this practice is “especially stark” for Muslim Americans, who are often deemed high-risk when sending payments and remittances abroad or to charities and religious institutions. This also has negative implications for countries that rely on such payments.
The letter also referred to a New York Times piece about the hundreds of reports it had received of customers of major American banks having their accounts shut down in a bid to stop suspicious activity.
As well as highlighting the issue, the letter contains six proposals that would “ensure all persons in the US are able to fully access and participate in our financial services system”.
This includes issuing a joint agency statement on the importance of anti-money laundering and combating financing terrorism as public priorities, as well as creating a formal advisory group on financial inclusion.
The letter also recommends issuing guidance for banks on when to de-risk, as well as providing consumers with more safeguards on financial transactions, such as information about what might trigger de-risking, and ensuring banks give notice to customers when accounts are intended to be closed.
The letter was supported by the National Iranian American Council, which called on the government to “step in to better safeguard minority communities from discriminatory banking practices”.
Earlier in February, Warren and Omar sent a letter to the CEO and President of J.P. Morgan over the issue of de-risking and the threat it poses to Muslim Americans.
They also sent a similar letter with colleagues to the same government agencies in 2022 to ensure equitable banking access for Muslim Americans.
According to The Hill, the Federal Reserve Board confirmed receiving the letter and plans to respond, while the Office of the Comptroller of the Currency declining to comment. The New Arab has requested comment from the US Treasury.