What Is De-banking?

De-banking is when a bank or financial institution decides to stop doing business with a person, charity, or company it sees as “too risky.” It happens without explanation, without warning to correct concerns, and without any proof of wrongdoing. Originally, this was meant to protect the financial system from money laundering and terrorist financing. But over time, De-banking has ended up hurting innocent people and organizations — especially Muslim-led and humanitarian charities.

History of De-banking

After the 9/11 attacks, governments around the world introduced much stricter financial regulations. The goal was to cut off funding to terrorist groups. Banks were suddenly under pressure to monitor all customers and transactions very closely — or face steep fines and reputational damage. To avoid that risk, banks began de-banking clients, even if nothing illegal had happened. It became easier — and safer — for banks to walk away than to ask questions.

Who Is Being Affected?

Muslim-led and humanitarian charities are affected most. Many of these charities do vital work in crisis zones like Syria, Gaza, and Somalia. These regions are often flagged by banks’ internal systems as high-risk. Even if the charity is registered, audited, and transparent, its account may still get shut down — with no real explanation.

Examples of How De-Risking Affects Communities

De-risking may seem regulatory, but its impact is far-reaching

Sudden Mosque Fund Closure

A Toronto mosque received 30 days’ notice to move all its funds.

Unexplained Account Termination

Another mosque was dropped by its bank with a vague letter citing “risk appetite.”

Charity Transactions Blocked

Many charities have had donations blocked, aid transfers delayed, or payment processors suspended—all without any evidence of wrongdoing.

Personal Payment Suspended

One individual had a PayPal payment blocked simply because the memo mentioned a “Persian poetry class.”

A Global Problem

Canada isn’t alone. In the United Kingdom and across Europe, Muslim charities faced the same treatment. Substantial international research and evidence exist that detail the this phenomenon. Governments are now reviewing the problem. But in Canada, there are still no formal safeguards, no right to a bank account, and no independent appeal process with real power.

In the U.S.

Muslim-led and humanitarian charities raising money for Gaza in 2023 suddenly had their donations blocked or their accounts closed.

In the U.K.

Over 40% of Muslim-led and humanitarian charities surveyed reported having their accounts shut down — often with no reason given.

Why This Matters

De-risking affects real people and communities. Originally intended to protect against financial crime, it now disrupts aid projects, prevents charities from helping those in need, weakens public trust, and unfairly targets vulnerable groups. Without clear rules and accountability, the harm caused by de-risking continues to grow.

Aid Projects Shut Down
De-risking doesn’t just inconvenience people—it can shut down entire aid projects, block lifesaving funds, and make entire communities feel unwelcome in Canada’s financial system.
Charities Unable to Help
When humanitarian organisations are unable to send money, expertise or goods into disaster or conflict-zones, those communities in need and their families around the world suffer.
Public Trust Damaged
When everyday Canadians lose their accounts for unclear reasons, public trust in banks—and in fairness—erodes.
Vulnerable Communities Hurt Most
De-banking was meant to keep us safe. But without better rules and real accountability, it’s doing serious harm—especially to communities that are already vulnerable.

The Cost of De-Banking

Despite being heavily invested in meeting all CRA regulations and mitigating ATF risks, charities face excessive, extra-legal compliance demands from financial institutions. This downstream burden depletes resources meant for humanitarian response. Any de-risking reform must avoid imposing new reporting obligations on already compliant organizations.