A group of Democratic lawmakers in the House of Representatives and the Senate are calling on the heads of the Treasury Department, the Federal Reserve Board and other financial regulators to ensure equal access to banks for Muslim Americans and immigrants.
Sen. Elizabeth Warren (D-Mass.) and Rep. Ilhan Omar (D-Minn.) — in a letter sent Wednesday to Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell and other regulatory leaders — advocated for anti-money laundering and anti-money laundering policies of financial crime practiced at the agencies could disproportionately impact Muslim Americans.
These anti-money laundering practices are often known as 'de-risking' and involve ending or limiting business relationships with large groups of customers.
“The threat of risk reduction is especially high for Muslim American customers. Financial institutions may consider Muslim and Arab, Middle Eastern and South Asian Americans as 'high risk', possibly incorrectly, when they send payments or remittances abroad or donate to charities or religious institutions,” the lawmakers wrote in the letter dated May 15.
In a study last year According to the Institute for Social Policy and Understanding, more than a quarter of Muslim Americans reported difficulty banking, the highest of any demographic group.
“Reducing risks could also undermine the stability and sustainability of countries that rely on remittances for their economic development,” the lawmakers wrote, pointing to a piece on how the trend of reducing risks is harming countries that rely on remittances' inflicts'.
Other signatories to the letter include Sens. Ed Markey (D-Mass.), Bernie Sanders (I-Vt.) and Reps. Rashida Tlaib (D-Mich.), Katie Porter (D-Calif.) and Barbara Lee (D-Calif.)-Calif.), Alexandria Ocasio-Cortez (DN.Y.), Pramila Jayapal (D-Wash.) , Joyce Marie Beatty (D-Ohio) and Jonathan Jackson (D-Ill.).
The lawmakers pointed to a New York Times report last December about how hundreds of customers reported major financial institutions closing their accounts without warning in an effort to prevent suspicious activity.
While he applauded the Ministry of Finance for this risk reduction strategy, released last April and outlining ways to reduce risk, lawmakers argued that more could be done.
They proposed that federal agencies issue a joint statement affirming that financial inclusion is a “public priority” for anti-money laundering policy and establish a formal, domestic financial inclusion advisory group that includes representatives from each agency.
Lawmakers also recommended issuing more specific guidelines for banks on what situations warrant closing accounts. They have asked the Treasury Department to require financial institutions to have a process in which customers can provide evidence to show a transaction is legitimate if they fear flags will be raised.
They also asked the Consumer Financial Protection Bureau to enforce the laws that ensure customers receive adequate notice and resources when their accounts are unexpectedly closed.
In to announce In its de-risking strategy last year, the Treasury Department said de-risking “undermines several important U.S. government policy objectives.”
“This strategy reflects the Biden-Harris administration's priority to shape a more secure, transparent and accessible financial system, while maintaining a robust framework to protect the U.S. financial system from illicit actors and safeguard national security strengthen,” said the Ministry of Finance. The department said this at the time.
Other recipients of the letter included Federal Deposit Insurance Corporation Chairman Martin Gruenberg, Crimes Enforcement Network Director Andrea Gacki, National Credit Union Administration Chairman Todd Harper, Consumer Financial Protection Bureau Director Rohit Chopra and acting Michael Hsu head of the Office of the Comptroller of the Currency.
The Hill has contacted the relevant agencies for comment.
Concerns about anti-Muslim incidents in the US have been further fueled amid the ongoing war between Israel and Hamas in Gaza, which has killed more than 35,000 Palestinians, according to local health officials.
Last year, more than 8,000 anti-Muslim complaints were registered nationwide, the highest number in the three decades that the Council on American-Islamic Relations (CAIR) has been tracking complaints.
CAIR received the most complaints in the last three months of last year, shortly after the militant group Hamas launched a surprise raid on Israel that killed about 1,200 people.
