Since the FBI had publicly stated that the raid was not related to terrorism, and such information sharing would make it difficult if not impossible for Life to open another bank account and continue its operations, the group filed suit in federal court seeking an injunction to "prohibit Defendant Comerica from disseminating any false or misleading information under 314(b) of the Patriot Act." The suit also challenged the constitutionality of Sec. 314(b) and claimed Comerica's actions violated the Life's civil rights, since "Had the officers not been of Arabic descent or if Plaintiff was not a Muslim American charity, upon information and belief, the bank account would still be open." The community showed its support through a series of pickets and demonstrations at Comerica branches, and some Muslim Americans closed their accounts there.

On Dec.1, 2006, the U.S. Department of Justice moved to intervene in the case in order to argue for the constitutionality of the Patriot Act provision. However, that issue remains undecided, since Life and Comerica settled and dismissed the case after Life reviewed the bank's Sec. 314(b) filing and determined that Comerica "did not disseminate any negative information about Life." Despite this settlement, Life had difficulty finding a bank that would allow international wire transfers. For example, LaSalle Bank closed a new account after Life requested wire transfers. Although Life was able to open accounts for administrative purposes with Chase Bank, it was not allowed to wire funds internationally.

Such a situation was not workable for an international humanitarian aid organization. Life needed to send money to its field offices and receive money from partner nonprofits. As a result Life was forced to apply for a separate account for international transfers at another financial institution. Although they were successful with the application, the new bank forced them to respond to a Compliance Checklist that tracks old versions of the Treasury Department's Voluntary Anti-Terrorist Financing Guidelines verbatim. The form asks the applicant to answer Yes or No for each so-called best practice, and at the end states, "If the answer to any of the above questions are NO, the organization should take the immediate necessary legal and administrative steps to comply with the guidelines."

Although this use of the Treasury Guidelines is contrary to their stated purpose and Treasury's public statements about flexibility and voluntariness, Life completed the form because of their dire need for the account. Not surprisingly, the list included items that were impractical or ill-advised or both, and Life had to explain to bank officials why it did not comply with two provisions. After much back and forth, with the bank officials consulting their superiors, the account was opened.

Ihsan Alkhatib, Life's Legal Director, has called for reforming Sec. 314(b), saying the Patriot Act, not the banks, are the root of the problem. In an article in the Arab American News he said, "Banks are acting this way because of anti-terror laws…. Innocent banks doing business with entities that even the government did not classify as associated with terrorism have been subject to costly litigation." He cites Ted Frank in an Oct. 28, 2006, column in the Wall Street Journal, who describes the vague definitions of what constitutes "material support" of terrorism as the problem. It has led victims of terrorist attacks to sue banks for the actions of account holders that were not listed as terrorist organizations by the U.S. government, saying "Lawsuits are pending now that claim, in effect, that the banks should have known then what the U.S. government did not decide until years later."

The government has since returned Life's seized computers and says it will return financial records on time for Life to file its annual Form 990 with the IRS. Since no charges have been filed, Life and its supporters are left wondering what was behind the raid. Their lawsuit noted that "this was the third year in a row that federal agents would either conduct interviews of Muslims or persons of Arabic Origin, or raid homes and Islamic charities right at the beginning of Ramadan the time period where donors provide the most generous donations." The Feb. 17, 2007, Columbia (MO) Daily Tribune, notes that the issue may be whether Life provided humanitarian relief to Iraq before the war, when transactions with the country were prohibited. The Detroit News also noted Sept. 26, 2006, that there were demonstrations against Israeli bombing in Lebanon during the summer. Whatever the cause, the effects have been to make delivery of humanitarian aid more difficult.