A March 30 article in the Wall Street Journal has brought renewed attention to the problem of bank derisking of charities. “Cautious Banks Hinder Charity Financing,” by Rob Barry and Rachel Louise Ensign, is drawn from information provided by the Charity & Security Network and interviews with several C&SN members.
The crackdown on terrorism financing “has been a challenge for humanitarian agencies trying to deliver aid in conflict areas even though they are often exempt from sanctions,” the article states. The problem is particularly frustrating because banks do not give an explanation for closing an account, and there is no opportunity to appeal the decision. Some charities have had multiple account closures over the past several years.
A companion article published the same day, “Losing Count: U.S. Terror Rules Drive Money Underground,” focuses on the movement of funds to less-regulated channels as a result of derisking.
A third article, “The Unintended Consequence of Closing High-Risk Accounts,” was published April 2. The article mentions our February sign-on letter and our upcoming study on the scope of the derisking problem.