HACKENSACK, N.J. — In the chilling aftermath of Sept. 11, 2001 _ when authorities found that hijackers had active bank accounts in the U.S., including in New Jersey _ the federal government enacted laws to try to detect suspected terrorist links at financial institutions.

But those laws have also had a side effect: Banks have delayed or blocked money transfers and shut down the accounts of some Muslims and non-Muslims who do business with them, sometimes because of an Arabic-sounding name.

“Nowadays, given the Patriot Act and post-9/11 era, banks don’t even have to explain,” said Ibrahim Hooper, communications director for the Council on American-Islamic Relations. “They can close your account for any reason or no reason and (customers) have absolutely no recourse.”

Among other things, the USA Patriot Act, signed into law by President George W. Bush six weeks after the attacks, expanded the obligations of financial institutions to monitor and report suspicious activity and gave government agencies greater power to go after banks that didn’t comply. In the days before Sept. 11, hijackers in northern New Jersey had used ATM cards, withdrawn cash and received wire transfers; two men living in Paterson, N.J., tried to buy three tickets with a debit card for American Airlines Flight 77, which crashed into the Pentagon, and ended up paying $1,842 in cash.

Bankers consider numerous factors when looking at transactions, such as names on a watch list, the amount and frequency of the moves, overseas activity or anything that deviates from a customer’s routine. Anyone who does something unusual or provides incomplete information can be affected, said Annemarie McAvoy, a former federal prosecutor and adjunct professor at Fordham Law School who specializes in money-laundering and terrorist-financing issues.

New Jersey Muslims believe the financial scrutiny has fallen disproportionately on them and is one of the ways life has changed because of their faith or their names. The scrutiny, they say, has extended from airport security checkpoints to banks and even to their mosques and businesses, as evidenced by the New York Police Department’s surveillance in their communities.

On March 16, John Lory of Jersey City, N.J., said he tried to wire $1,000 to a business partner who co-owns a house they rent in South Plainfield, N.J. He wrote the name of a new tenant on the transfer with the comment “Saed’s rent” _ similar to notes he said he makes to mark who paid.

For days, the money wasn’t sent. When Lory called his Chase bank, he said, a representative said the bank needed “Saed’s” last name, date of birth, country of origin and address before it could release or refund the money. Though he said he found the request offensive, Lory supplied the information on March 21.

“It just felt wrong,” said Lory, who is not a Muslim. “It’s racial profiling when you can judge somebody based on their first name, and that’s all they knew about this person.”

The representative called six days later and asked why Lory had misspelled the tenant’s name, which actually is Zaid, Lory said. He said he didn’t remember the spelling and didn’t think it mattered because it was a note to himself. The money was returned to Lory that day, he said, and he called the experience unsettling and disruptive.

It’s unclear whether any other factors prompted the bank to freeze the wire transfer. Chase spokesman Michael Fusco said he could not talk about the case for privacy reasons. He provided this statement: “As a U.S. financial institution we are required to comply with regulations set by the U.S. Treasury Office of Financial Assets Control.”

Bankers must implement policies and procedures to minimize their risk of violating agency regulations, said U.S. Treasury spokesman John Sullivan. Those regulations require banks to stop transactions linked to nations under sanctions and to people and institutions on the agency’s 527-page list of known and suspected terrorists.

“This may involve suspending a wire transfer containing a potential sanctions reference and waiting for clarifying information before completing the transaction,” Sullivan said.

The problem with the Lory case is not that the bank asked for Zaid’s information, but that it didn’t request the same information when other tenants were noted on previous transfers, McAvoy said.

“They need to know who the person is getting them the money,” she said. “They should do this with everybody.”

Still, McAvoy said, customers will prompt more scrutiny if they are from certain countries or send money there. “The reality is that (banks) are under requirements to watch money from high-risk countries,” she said. “The reality is the Middle East is considered high-risk.”

McAvoy said it’s difficult for bankers to examine large volumes of transactions without the training that is given to law-enforcement officers.

“It’s like looking for a needle. You have how many transactions a day?” she said.

The 9/11 Commission raised questions about banks’ ability to detect terrorist activity in its 2004 report, arguing that such activity is difficult to trace. The hijackers dealt in relatively small sums of money and their transactions raised no alarms.

In all, the Sept. 11 plot cost al-Qaida $400,000 to $500,000, with about $300,000 of that passing through the hijackers’ bank accounts in the U.S., according to the commission.

The commission also noted the commonality of many Muslim names; one official at a major financial institution said that 85 people in New York City alone had the same name as Sept. 11 ringleader Mohamed Atta.

The stepped-up financial regulations can be burdensome for both banks and their customers, experts say. Banks must invest substantial time and money into compliance policies and are required to file frequent Suspicious Activity Reports.

And they have a tremendous amount to lose if they don’t comply. They can be fined millions for failing to meet federal regulations, and experts say those fines have been levied many times. Banks also don’t want a terrorist to get financing on their watch for fear of a public-relations disaster.

“The banks don’t want to be caught as having facilitated a transaction to terrorist organizations. It’s just very damaging to the reputation,” said Robert Rowe, vice president and senior counsel for the American Bankers Association’s Center for Regulatory Compliance.

For that reason, some banks will shut down an account rather than take a risk. Generally, they are not allowed to tell a customer why because of the potential for tipping off a suspect to an investigation, McAvoy said.

McAvoy said customers should not assume that the bank suspects them of terrorism or some other illegal activity if they encounter problems; sometimes, simple questions about a pattern of activity or a lack of information can prompt a bank to act.

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