Data Disclosure
Annual de-risking reports from banks to regulators, with sectoral/demographic data
Systemic Discrimination in De-Risking
Why Muslim-led and humanitarian charities, and Racialized Communities Bear the Brunt of Financial Exclusion in Canada
A Hidden System with Unequal Impact
De-risking in Canada often takes place with little public visibility — yet its consequences are far-reaching. Though intended as a neutral risk management tool, it has disproportionately affected Muslim-led and humanitarian charities, racialized individuals, and organizations working in or linked to regions deemed “high-risk.” These outcomes are not random. They reflect broader systemic patterns in how financial risk is assessed and managed — patterns that deserve closer scrutiny.
Data Gaps and the Need for Transparency
One of the biggest obstacles to reform is the lack of basic data
No Public Reporting
No public reporting exists on how many accounts are closed each year for “compliance risk.”
No Demographic Data
No demographic breakdowns are published by regulators like the FCAC or OSFI.
No Explanations
No explanations are required from banks—even when entire communities are affected.
Case in Point: NCCM’s Investigation
Without data, there’s no accountability. Charities can’t correct false assumptions, negotiate safeguards, or even defend their record — because they’re not told what triggered the closure.
Example: In 2022, the National Council of Canadian Muslims (NCCM) published The Untold Story of De-Banking, exposing how Muslim-led and humanitarian charities were losing banking access with no due process. Much of the evidence came from leaked letters — not from official oversight.
What’s needed
Disproportionate Impact on Muslims and Racialized Communities
While anyone can be de-banked, Muslim Canadians are hit hardest.
Flagged Despite Compliance
Muslim-led and humanitarian charities operating in Syria, Gaza, or Somalia are flagged as high risk — even when fully compliant.
Accounts Closed With Limited Notice
Major mosques and humanitarian groups have had accounts closed with 30 day notice, sometimes impacting millions of dollars of donations for beneficiaries.
Services Suddenly Pulled
Donation platforms have pulled services, cutting off funding flows and delaying aid to orphans, refugees, and families in crisis.
Case Study: Targeted Communities
The pattern is clear. if you’re linked to a “high-risk” region or community, you’re more likely to lose access — not because of what you’ve done, but because of who you are or where your work takes you.
Example:
- Somali money transfer businesses were cut off by major banks, disrupting a remittance system that supports up to 40% of Somalia’s GDP.
- Iranian-Canadians have reported personal accounts closed due to family ties abroad, even without any evidence of wrongdoing.
Even without explicit targeting, entire sectors are sidelined — Muslim-led and humanitarian charities, Somali remitters, Iranian families — all labelled risky, with no evidence and no defense.
What Happens When You’re De-Banked?
Most get no appeal, no explanation, and no recourse. The financial consequences are devastating:
Charities can't move funds to deliver aid on time
Personal accounts are closed, affecting mortgages, business operations, and basic transactions
Reputational damage makes it harder to find another bank — or even raise funds
What Other Countries Are Doing
And Where Canada Falls Short
| Country | Right to Bank Account | Closure Notice | Explanation Required | Appeal Path |
|---|---|---|---|---|
France
|
Yes – “Droit au compte” | Yes | Written reason required | Banque de France |
Belgium
|
Basic banking for NPOs | Yes | Justification required | Government chamber |
UK
|
Only for individuals | 90 days | Unless police object | FCA oversight |
Australia
|
No legal right | Yes | Partial (via code) | AFCA Ombudsman |
United States
|
No legal right | Yes | No duty to explain | Partial (anti‑bias laws) |
Canada
|
No legal right | 30 days | No requirement | No binding recourse |
What Systemic Discrimination Looks Like
Systemic discrimination doesn’t always mean intentional bias. It happens when:
Institutions apply rules unequally
Risk models rely on stereotypes
Communities have no seat at the table
This is what structural Islamophobia looks like: neutral rules applied in ways that disproportionately target Muslim and racialized communities.
Our Call to Action
Transparency
Require banks to report account closures and explain decisions where no investigation is underway.
Oversight
Launch a public audit into how Muslim and racialized communities have been affected.
Inclusion
Add civil society voices to AML advisory tables — not just banks, regulators, and police.
Access Guarantees
Create a right to basic banking access for registered nonprofits, with appeal rights.