Hudson United Bancorp in Mahwah, N.J., has rejected suggestions that its decision to close the accounts of an Islamic school in Union City, N.J., was motivated by religious bias.
The $9 billion-asset company said Wednesday that it detailed its reasons for terminating the accounts in a Dec. 31 letter to officials at the Islamic Education Center of North Hudson.
"Any reader of the … letter would conclude that the religious affiliation of the depositor was not a factor in the bank's decision," Hudson United said.
It also said privacy laws prevent it from disclosing the reasons publicly. Yousef Abdallah, the Islamic Education Center's outreach director, told the Associated Press on Wednesday that Hudson United closed the accounts last month, and that the center has since found another bank.
Fourteen months ago the office of Manhattan District Attorney Robert M. Morgenthau accused a correspondent banking unit acquired by Hudson United a year earlier of money-laundering-related offenses. Hudson shut the division and paid a $5 million settlement fine. In June it signed a cease-and-desist order with the Federal Deposit Insurance Corp. agreeing to create a board committee to monitor regulatory compliance.
