In an increasingly cashless society, having a basic bank account ought to be an inalienable right. Instead, we have a system that deliberately prevents millions of Americans from making even the simplest transactions, writes Mahmoud Reza Banki. GKSD - stock.adobe.com
As a chief financial officer, I signed off on annual budgets over $1 billion. I have a doctorate and an MBA, a clean criminal record, minimal debt and credit scores above 800. But I cannot open a checking account with a dozen major U.S. banks.
I immigrated to the U.S. from Iran at age 18 and became a U.S. citizen in the late 1990s. I graduated from the University of California, Berkeley; earned a doctorate in chemical engineering from Princeton; and took a consulting job at McKinsey & Company in New York.
My life was turned upside down on January 7, 2010, at 6 a.m. A dozen Immigration and Customs Enforcement agents stormed into my apartment and arrested me. I was wrongfully charged with violating U.S. sanctions on Iran. My family sent money from my mother's divorce settlement from Iran to America.
Prosecutors alleged that this transaction violated the U.S. sanctions on Iran — even though family money of this kind is exempt from these sanctions. I was indicted and held in maximum- and high-security prisons, only to be released after 22 months of incarceration when the case was overturned on appeal.
Even though the primary sanctions charges against me were overturned on appeal, secondary charges of making false statements remained on my record. Fourteen members of Congress — including the late Rep. John Lewis and Sen. Diane Feinstein — supported my application for a presidential pardon. I was granted a full and unconditional presidential pardon in 2021, finally fully clearing my record.
In the years following my release I began to put my life back together.
From 2017 to 2023, I held critical operations, finance and strategy roles culminating in my position as chief financial officer and chief strategy officer at Tubi, a leading ad-supported video-on-demand streaming and technology company. In this capacity I oversaw many aspects of business operations and finance including annual budgets, accounting, compliance, audit and the company's banking relationship.
Despite that professional success, in my personal capacity, I have been and still am unable to open bank accounts or credit cards with a dozen notable financial institutions including JPMorgan Chase, Bank of America and Capital One. I cannot manage a retirement account or my own investments with Fidelity, E*Trade or TD Ameritrade. They all refuse me as a customer with a lifetime ban. The rationale is often obfuscated, and the closure letters are often templates without details.
As CFO for Tubi, I signed off on $1 billion in annual transactions for the company, processed through Bank of America. Ironically, Bank of America is among the banks that will not have me as an individual customer, even for something as basic as a checking account.
In a society that is becoming increasingly cashless, being unable to open and maintain a simple transaction account becomes more untenable every day.
I am fortunate and have advantages that most formerly incarcerated people and immigrants do not. If it's this draconian for me, can we rightfully claim we're a society offering second chances and merit-based opportunities?
As a society we should guarantee a bank account — and access to the financial system — as a right to every American.
There are up to 2 million inmates in U.S. prisons. Some 70 million Americans have some form of criminal record. Those with criminal records are only part of a larger underbanked group including immigrants and minorities.
Even for someone like me, whose record has been formally cleared, there are major impediments to financial inclusion. Why? Because having a "cleared" record isn't as simple as it sounds. Many financial institutions refuse me as a customer. Data, credit and reporting agencies — along with government entities — continue disseminating incorrect information about me. It's a war of attrition to correct them all.
Banks have the discretion to choose their customers while also "adhering" to anti-discrimination laws.
Ordinarily, being refused wouldn't matter. With more than 4,000 U.S. financial institutions to choose from, why not try another one?
Two issues. First, this is hard to do practically. Jumping through application hoops — and figuring out which banks will and which won't open an account — creates a credit history, lowering your score and undermining future success. Second, banking is not a fragmented market of thousands of institutions with equal market share. A small number of banks control a large portion of the market.
Banks are effectively empowered to exclude U.S. citizens from the financial system, that most basic tool for working, living and staying connected to society. Financial institutions should be required to disclose more clearly why they deny accounts.
Perhaps the government could provide a backstop or mandate. Erroneous red flags are commonplace. As The New York Times reported in April, banks are strongly incentivized to close accounts linked to a "suspicious activity report." And yet a 2018 Bank Policy Institute analysis of 640,000 such reports found that just 4% warranted a follow-up from law enforcement.
Unregulated data analytics and background checking companies, including Dow Jones, Moody's RDC and LexisNexis, scour data sources and the internet to prepare reports on all of us, which they sell to banks as compliance, know-your-customer or risk tools.
Government entities have incorrectly reported my height, weight and hair color on multiple records. Critically, upon asking for records, we found these government records contained a half dozen charges of fraud, money laundering and other serious accusations that were never brought against me and do not exist as part of any court record.
Trying to correct these records is an undertaking. We reached out separately to the Southern District of New York and nearly a dozen agencies, including ICE, the FBI, CIA, DOJ, BOP, CBP, OFAC and the Department of Homeland Security.
It's an arduous process, requiring an attorney to force answers when most entities only respond to written correspondence. With 45-day response cycles that often stretch to months, correcting one item could take a year or longer. It's a full-time job requiring constant follow-ups, with mounting attorney fees and circular loops with limited resolution and at times no solutions.
Guilty or innocent, after serving years in prison, criminal punishments shouldn't continue after release and into perpetuity. Economic inclusion is critical for reintegration, building a life — and not being cornered into isolation, a recidivist cycle of lack of opportunity, crime and prison again.
We no longer live in a cash society. Those without access to the financial system are effectively invisible. We are a nation pledging inalienable rights of life, liberty and the pursuit of happiness for all, even those who have served time in prison, immigrants and the underbanked.
So, let's get clarity on why banks refuse ordinary and imperfect citizens; let's clarify our rights and include a right to the most basic of checking accounts, a prepaid credit card and access to the financial system in the digital age for every U.S. citizen.