December 07, 2022

Senator Warren and Representative Omar Call on Regulators to Improve Banking Access for Communities of Color

Text of Letter (PDF)

Washington, D.C. – Senator Elizabeth Warren (D-Mass.) and Rep. Ilhan Omar (D-Minn.) sent a letter to the heads of all U.S. Banking regulators calling on them to improve banking access for immigrant communities and communities of color.  

The lawmakers are asking the heads of the Treasury Department, Financial Crimes Enforcement Network, Office of the Comptroller of the Currency (OCC), Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration to update Congress on their work to modernize financial crimes compliance (BSA/AML/FCC) obligations and sanction regimes in order to protect and promote equitable banking access – both for historically marginalized communities and the charitable organizations that work with such communities. 

Discrimination against immigrant communities, communities of color and charities with real or perceived connections to sanctioned and fragile countries has long plagued the financial services industry. This has made it challenging to send remittances and other life-saving forms of financial assistance to countries with weak financial governance. 

“Countless U.S. individuals, businesses, and charities have been victims of discriminatory policies and practices that appear to limit their access to financial services because of their religion or national origin,” wrote the lawmakers. “During this pandemic, many diaspora communities and charitable organizations in our districts have still found it challenging to send remittances and other life-saving forms of financial assistance to countries with weak financial governance and that are subject to U.S. sanctions. It is undoubtedly in the national interest of the United States to ensure the transmission of such funds go through formal, regulated, and transparent channels. The federal government must step in to halt and reverse these discriminatory actions that are directly tied to federal restrictions.”

“Banking as a charity/nonprofit and ‘banking while Muslim’ are not illegal and must stop being treated as such. As elected officials, it is our responsibility to amplify the voices of our constituents who feel powerless in the face of big banks and unaccountable regulators,” the lawmakers added. “Many families and businesses across the country have felt the harsh impacts of our current sanctions and AML/BSA regimes for far too long, especially during this pandemic that has further disrupted formal transfer channels. We are advocating for a more inclusive financial system, and we reject that there is a binary choice between creating financial inclusion and protecting our financial system from abuse by illicit actors. These should be complementary goals.”

These sanction challenges were highlighted by a recent class action lawsuit against Bank of America (BoA) regarding its treatment of a customer of Iranian origin. Filed on behalf of Mohammed Farshad Abdollah Nia, an immigrant from Iran and a permanent resident of the United States, the suit claims that his bank account was unjustly closed even though he followed BoA’s policy regarding proof of residency, which it says is necessary to comply with U.S. sanctions. 

BoA still proceeded to close the account without prior verbal or written notice. BoA attempted to dismiss the case, but Judge Cynthia Bashant of the Southern District of California denied the motion. Judge Bashant noted that the allegations support a plausible inference of intentional discrimination from the bank. Whether or not the court ultimately finds that Bank of America engaged in unlawful discrimination based on national origin, it is clear to us that the bank’s approach aimed to avoid, rather than manage, the risk of sanctions and BSA enforcement. 

The letter is co-lead by Representatives Rashida Tlaib (D-Mich.), Joyce Beatty (D-Ohio), and Senator Ed Markey (D-Mass.), and co-signed by and Representatives Jesús “Chuy” García (D-Ill.), Barbara Lee (D-Calif.), Pramila Jayapal (D-Wash.), Hank Johnson (D-Ga.), Watson Coleman (D-N.J.), Mark Pocan (D-Wis.), Jamaal Bowman (D-N.Y.), Debbie Dingell (D-Mich.), Marie Newman (D-Ill.), Jan Schakowsky (D-Ill.), Katie Porter (D-Calif.), Alexandria Ocasio-Cortez (D-N.Y.), Ayanna Pressley (D-Mass.), André Carson (D-Ind.).