SAN FRANCISCO, March 1: American Muslims are protesting at the closure of Muslim businesses and Muslim organization's bank accounts.

In a latest incident, the Islamic Education Centre (IEC) of New Jersey, was told by Hudson United Bank that its accounts were being closed and it had 30 days to take its business elsewhere.

The IEC was Hudson United Bank's customer for almost 13 years. Since the terrorist attacks of Sept. 11, 2001, civil rights groups say they have fielded numerous complaints about financial institutions cancelling accounts of American Muslims or of customers with Middle Eastern-sounding names.

"It appears to be somewhat of a pattern where Muslims or Arab-Americans are actually having their accounts closed and, in some cases, being denied loans," said Sarah Issa, spokeswoman for the New Jersey chapter of the Council on American-Islamic Relations, the nation's largest Muslim civil rights group.

"When a customer of good standing who has had no prior problems with a bank abruptly has their account closed, it is rather suspicious," she added. In January, it was reported that some Arab-American-owned groceries and other businesses in New York were told by their banks to take their business elsewhere. Similar cases have been reported in Boston and in Mississippi.

The business owners said that the banks are discriminating against them solely because of their Middle Eastern names and ancestry. Civil rights groups, including the American Civil Liberties Unions, said in addition to accounts being closed, they had received complaints about banks across the nation making unreasonable requests for private information about Muslim account-holders.

In most cases, Muslims were asked to provide large amounts of documentation, regardless of credit history. Requests included tax and banking information, financial statements, residency documentation and proof of identity. The Islamic Education Centre spokesman Yusuf Abdullah said that the bank gave no reason for its decision which had caused concern in the Muslim community.

However, the Washington-based American Bankers Association (ABA) said that under the new laws introduced after 9/11, financial institutions are permitted to shut down accounts at any time, for any reason, and not tell the account holders why.

Under the new laws, banks are required to know their customers, report large movements of cash and alert regulators when they deem any banking activities suspicious. John Byrne, the ABA Director, said While that may sound straightforward on paper but there is a lack of consistency in terms of how the rules are interpreted and enforced by regulators and bank examiners in the field.

Indeed, the number of suspicious-activity reports filed by banks has skyrocketed. Back in 1997, the first full filing year, banks filed 81,197 reports. In 2003, that number had climbed to 288,343.

In January, the ABA, along with state banking associations, Penned a letter to regulators complaining about the lack of clarity in regulatory examinations and enforcement, and requested guidance.

Across the country, more and more banks were taking a "better safe than sorry" approach when it comes to what they deem "high risk" customers by closing their accounts and, in some cases, filing suspicious-activity reports with regulators, according to John Byrne.

New regulations place burden on banks and now hold them liable if they participate in what ultimately is found to be money laundering or handling money from terrorist organizations or assisting someone to send money to a terrorist organization.

Instead of doing the necessary work to make the determinations that they can handle this account, they decide it is not worth doing the work at all, and they decline or close the account.

In the absence of meaningful guidance from the government, the ABA's Byrne said, banks, at the urging of their lawyers, would continue taking matters into their own hands, which meant more customers, like the Islamic Education Centre, would likely find themselves caught in the crossfire.