Derisking Silently Closes Accounts.
No Explanation.
Imagine waking up to find your account closed, and no one will tell you why. This is the reality for thousands affected by derisking. It’s legal, invisible, and deeply harmful.
What Is Derisking?
De-risking happens when banks close accounts or block transactions for people, charities, or businesses they see as “too risky” — often with little notice, no opportunity to address concerns, and without any proof of wrongdoing. Originally meant to fight money laundering and terrorism financing, these policies now unfairly impact innocent communities and humanitarian charities across Canada.
De-Risking in Canada: When Compliance Becomes Exclusion
Canada’s banking system is one of the most concentrated in the world — and that concentration has consequences. When one major bank de-banks a Muslim-led and humanitarian charities or mosque, others often follow. The result? Legitimate nonprofits are quietly pushed out of the financial system, with no clear explanation and nowhere to turn.
A Domino Effect Across Banks
Once a major bank closes an account, others often won’t open a new one — even without coordination, they share similar risk models and penalty fears.
Many charities are forced to rely on credit unions or fintechs, which often lack the services and scale required to operate effectively.
Vague Letters, Real Consequences
Account closures come with vague justifications like “risk tolerance” or “outside our risk appetite.”
Examples abound: Toronto mosques given 30–40 days’ notice to move all funds, with no detailed explanation.
Algorithms Flag Words, Not Context
Banks and payment platforms use automated filters that flag any transaction linked to words like “Gaza,” “Syria,” or “Persian.”
These systems catch innocent transactions — from aid transfers to PayPal payments for poetry classes.
For Muslim organizations and individuals, it’s not just a financial inconvenience — it’s being treated as a compliance risk by default, not a valued client.
About COODA
The Canadian Observatory on Derisking Abuse (COODA)
The Canadian Observatory on De-Risking Abuse exists to raise awareness and educate the public about how financial institutions apply de-risking practices — and how these practices disproportionately harm Muslim organizations and humanitarian charities across Canada.
Learn More
Who Has the Power?
De-risking isn’t random — it’s the product of how Canada’s banking institutions manage, interpret, and enforce risk assessments defined by the Government of Canada. While no single body is solely responsible, key actors within the system hold immense influence over who gets access to banking — and who gets shut out. While government regulations set the framework, banks ultimately decide how to apply them. These decisions often lead to frozen accounts, terminated services, and, in many cases, complete exclusion from the financial system — with no explanation and virtually no path for recourse.
Complicit PartiesThe Systemic Impact of De-Risking
De-risking doesn’t affect everyone equally. In Canada, it’s Muslim-led and humanitarian charities, immigrant families, and racialized communities that bear the heaviest burden—denied access to banking not for what they’ve done, but for who they are and where they send money. This is not a fringe issue; it’s a widespread, structural problem that cuts people and organizations out of the financial system—and out of society.
Muslim and Humanitarian Charities
Working in Syria, Gaza, or Somalia? Even if compliant, these organizations are routinely dropped by banks and payment platforms without explanation.
Mosques & Community Centres
Told with days’ notice to move millions or risk losing their operating accounts, disrupting vital community services.
Diaspora Families
Muslim-Canadian families have seen personal accounts shut down simply for sending remittances home, blocking lifelines to relatives.
The Human Cost
The Impact
Community organizations collapse overnight
Families abroad go without remittances
Donors lose confidence
Muslim communities are treated as suspect by default
Systemic Discrimination
Systemic discrimination has become a direct consequence of de-risking practices. Financial institutions are required to follow government-issued risk assessments that are often rooted in biased assumptions. This discrimination is then compounded by the use of automated algorithms, profiling, and flawed risk databases that disproportionately target racialized and marginalized communities. Entire families, charities, and businesses have faced exclusion not because of wrongdoing, but because of who they are or who they’re connected to. This section highlights the facts, figures, and real cases that expose this hidden injustice.
How We Change This
Derisking isn’t just a financial decision — it’s a systemic issue rooted in policy, bias, and lack of accountability. To address the harm caused by unjust account closures and financial exclusion, Canada must reassess and reform its derisking practices at every level. Policy change, transparency, and stronger consumer rights protections are essential to preventing discrimination under the guise of “risk management.”
Learn More