Mohammad Farshad Abdollah Nia, an Iranian citizen living in the United States, sued Bank of America for $millions in damages after the bank closed his credit card account in 2019. Nia alleged violations of federal civil rights laws and California state protections, claiming the bank's Consumer Residency Monitoring policy discriminatorily targeted customers from Iran and other sanctioned countries. The policy required Iranian citizens to periodically submit documents proving they were not residing in Iran, in compliance with federal sanctions regulations that prohibit U.S. banks from servicing accounts of Iranian residents.
The Ninth Circuit affirmed summary judgment for Bank of America, rejecting Nia's argument that the International Emergency Economic Powers Act's liability shield applies only to actions 'compelled by' sanctions regulations. 'Given IEEPA's expansive language, the Bank's CRM policy falls comfortably within the liability shield's ambit,' VanDyke wrote. The court found that while the bank's citizenship-based approach 'may not be compelled by the ITSR, it is certainly permitted under OFAC's guidelines.'
VanDyke delivered pointed criticism of Nia's statutory interpretation argument, writing that it 'has no root in the text of the statute.' The court explained that neither 'pursuant' nor 'reliance' in the 1977 law 'suggests compulsion,' and that the liability shield's language 'affords financial institutions like the Bank some discretion on how best to comply with the ITSR.'
The case arose after Bank of America mistakenly classified Nia's Form I-797C immigration document as permanent proof of residency in some letters, then later treated it as temporary documentation that expired. U.S. District Judge Cynthia Bashant had granted the bank's summary judgment motion in February 2023, concluding that IEEPA foreclosed all of Nia's claims except an Equal Credit Opportunity Act notice claim, which Nia voluntarily dismissed before appeal.
Nia argued the bank acted in bad faith by withholding information about document expiration dates and applying unnecessarily discriminatory policies. But the court found 'nothing in the record suggests that the Bank's mistake was not in good faith.' VanDyke noted that Bank of America 'was merely following its consistent practice of asking that new documentation be submitted several months before the previous documents would expire.'
The panel rejected Nia's reliance on third-party criticism, including letters from senators and consumer complaints, as evidence of bad faith. 'Whether third parties dislike the Bank's policy says nothing about the Bank's good faith,' VanDyke wrote. The court emphasized that even seven Consumer Financial Protection Bureau complaints among the bank's 67,000 Iranian citizen accountholders since 2016 'falls far short of proving any sort of widespread lack of good faith motivating the Bank's CRM policy.'
The decision strengthens banks' ability to implement citizenship-based sanctions compliance programs without facing discrimination liability. The ruling clarifies that IEEPA's liability shield extends beyond just mandatory compliance actions to include permissible risk-based approaches recommended by federal regulators, potentially affecting how financial institutions handle customers from sanctioned countries nationwide.