TCF Under Fire for Threatening to Close Accounts of Iranian Students
Still unable to wire their money to family back home, many Somali-Americans in Minnesota recently lined up to withdraw their deposits from U.S. Bancorp (USB) and Wells Fargo (WFC) or have vowed to do so soon.May 16
Expatriates of Somalia threaten to close their accounts at U.S. Bancorp and Wells Fargo unless the banks wire their money to suffering family members back home. But the big banks, and others in the industry, say federal rules make it too hard to offer the service.May 10
TCF Financial (TCB) in Wayzata, Minn., has landed in a dustup with students at the state's flagship university over its efforts to comply with U.S. laws that govern transactions with Iran.
The $17.9 billion-asset company recently sent letters to Iranian students at the University of Minnesota saying it could close their accounts because certain transactions appeared to contravene rules that prohibit financial dealings with their native country. The letters caught students off guard and now several of them are asking university officials to intervene.
"We're just ordinary students," Amir-Pouyan Shiva, a doctoral student at the university who received the notice, told the Star Tribune. "It's not fair."
TCF says it sent the letters as part of routine efforts to comply with the Bank Secrecy Act, anti-money laundering rules and a string of other strictures on transactions with Iran. "It has nothing to do with where the person is from, whether the person is a student, whether the person does any number of things — there's no classification that way," TCF spokesman Jason Korstange told American Banker.
Korstange says customers who receive the letter have 30 days to contact the bank, which can verify whether the transactions that triggered the letter happen to legitimate. He added that the bank has yet to close anyone's account.
Korstange could not say how many letters the bank sent out in the most recent round, but he noted that the mailings occur regularly throughout the year. "We have more than 1.2 million checking accounts and we monitor every one of them," he said.
Korstange added that some customers who received a letter contacted the bank, which promises to determine promptly whether the account can remain open. "We're not in the business of closing good accounts," said Korstange, who noted that customers who choose to change banks likely would incur the same types of reviews by other financial institutions.
University spokeswoman Patty Mattern said that roughly a dozen students from Iran contacted the university at the end of December after receiving the letter. A representative of the university's international student office met with about nine students last week "to hear their concerns and to provide them information what to do." Mattern said that TCF has told the university it would review an account within two days of hearing from the student.
In all, 67 Iranian students are enrolled at the university, Mattern added.
Any move by TCF is bound to garner attention at the university, which has an enrollment of roughly 52,000 students in the Twin Cities alone. TCF supplies the university's U-Card, which doubles as university identification and debit card for roughly 35,000 students who have signed up for it. The card is part of a $35 million deal that includes naming rights to TCF Bank Stadium, the roughly 51,000-seat home of the Minnesota Gophers.
TCF also supplies both the "i-card" at the University of Illinois and the University of Michigan's "Mcard," although neither of the Big Ten Conference stadiums carries the bank's name.
Treasury Department spokesman John Sullivan says he has seen news reports of the row in the Twin Cities but could not comment on the specifics of the situation. "We expect banks to adhere to U.S. laws," Sullivan said in an email. "However, our sanctions program is aimed at illicit activity by the Government of Iran, not students studying in the U.S."