Bank of America Wins Dismissal of Iranian Discrimination Claims

Bank of America Corp. won dismissal of a lawsuit’s claims that it discriminates against Iranians in reviewing customer accounts to ensure they comply with US sanctions policies.

The bank didn’t violate US civil rights law by cutting off the credit card of Farshad Abdollah-Nia, an Iranian postdoctoral fellow in San Diego with permanent-resident status, a federal judge ruled Tuesday. The judge also rejected class-action status for the suit, which alleges the lender restricted or closed accounts of as many as 15,000 Iranian Americans.

BofA had argued Nia failed to provide documentation proving he lives outside of Iran, which was needed to avoid violating US sanctions in financial dealings. It argued that the US Treasury is “very unforgiving of banks whose deficient sanctions compliance programs lead to violations.”

US District Judge Cynthia Bashant ruled BofA acted properly when it froze and then closed Nia’s account in 2019. The ruling is a victory for banks, which have latitude in deciding how to follow the complex and changing sanctions imposed by Treasury. Lawyers and consumer advocates say US banks are increasingly reluctant to handle transactions for customers with links to countries covered by the restrictions.

The bank showed its “good faith in both creating and applying its policies against a backdrop of statutes and regulations that demand compliance but are vague as to how banks should achieve that compliance,” Bashant ruled in San Diego federal court.

Bashant concluded BofA didn’t violate Nia’s civil rights through a customer residency monitoring policy that requires Iranian citizens to provide temporary proof-of-residency documents to show they’re not living in Iran. The bank closed Nia’s account after he didn’t respond to a demand for new documentation in 2019.

“Nothing in the record points to” BofA “creating its policy with even a whiff of dishonest intent,” the judge ruled.

A spokesman for BofA declined to comment. An attorney for Nia didn’t immediately respond to a request for comment.

The judge also ruled that BofA didn’t violate California laws, but it allowed Nia to pursue a claim under the US Equal Credit Opportunity Act that the bank failed to properly notify him of the account closing.

Bashant denied Nia’s motion to certify the case as a class action on his discrimination claims, but he can refile it within 30 days if he wants to pursue it on the ECOA notice grounds.

The case is Nia v. Bank of America, 21-cv-01799, US District Court, Southern District of California (San Diego).

Top photo: A logo hangs on the outside of a Bank of America Corp. branch in New York, U.S., on Friday, April 10, 2020. Photographer: Mark Kauzlarich/Bloomberg.