Backlash Over Somali Money Transfer Refusal in Minnesota

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January 17, 2012
Nearly 100 Somali-Americans rallied outside a Minneapolis area bank on Jan. 13, 2012, protesting the bank's refusal to deal with Somali wire transfer businesses that send money to Africa. The money wire outfits, also known as hawalas, are the primary, and sometimes only, means of transferring money to people living in the Horn of Africa, where widespread insecurity and famine have left millions of people in need. More than a dozen Somali money transfer businesses were forced to stop doing business in late 2011 after banks began refusing service, fearing they might inadvertently violate anti-terror laws. 
"It's a huge crisis for our community. We're not talking about numbers. We're talking about real people suffering," Abdirahman Muse, an activist in the Somali community, said standing outside the bank.
According to news reports, several Minnesota banks had maintained accounts with the Somali money service businesses for years. But amid increasingly federal scrutiny and the conviction of two area women in October of conspiracy to provide material support to al-Shabaab, many banks began discontinuing their services. Only a handful of smaller banks or wire transfer operations in the area will now conduct transfers, but limit the amount to under $500.  Without a bank to transfer the money to hawalas many Minnesota area Somali Americans are left with no means of sending money to their families in Africa, as Somalia has no banking system. The impact of the banks’ refusal will be felt hardest inside Somalia, where the United Nations estimates four million people are in need of assistance, mostly in the southern regions of the country where the risk of starvation is greatest.
Madino Ji'ale Farah, a 60-year-old grandmother and resident of Mogadishu, told the UN she and 13 members of her extended family were living on the $200 a month that one of her children sends regularly.  "We have no other income except our monthly bill from my daughter. We survive on this money and if it stops we have no other means," Farah said. "We would be forced to either go to the camps [for refugees and displaced people] or beg.” 
One of the last banks to offer the transfer service, Sunrise Community Banks, an association of three banks, announced in early December that it would close the accounts of a dozen or so money transfer shops serving an estimated 30,000 Somalis in the region. No explanation for their action was given, but the AFP is reporting that Sunrise said the U.S. government needs to remove "legal obstacles" before it can reinstate operations.   
“The banks talk about 'risk,' but they won't tell us what the risk is,” said Hersi Suleiman, who works at a hawala in Chicago. "Let's sit down and see what the risks are they're talking about. Ever since the hawalas exist, no bank lost a dime, no bank has ever been charged, but they talk about risk."  
Along with the bank protests, a group called the Somali-American Humanitarian Relief Association formed in December 2011 to assess a possible legal challenge to U.S. government regulations on banks. According to its website, its three main objectives are to evaluate the constitutionality of the Patriot Act and Bank Secrecy Act in connection to banks closing accounts with money-wiring businesses, negotiate a waiver to allow banks to reopen the accounts, and pursue legal action if a quick and satisfactory solution can't be found. The group’s attorney, Brice Goldstein, said he has contacted numerous local and federal officials about finding “relief solutions.”
Laura Hammond, a senior lecturer at the School of Oriental and African Studies in London, described the lack of financial options available as serious. "The diaspora is one of the main lifelines to [people in] the famine areas and their support is more effective than that of most aid agencies because they are able to deliver funds to precisely where they are needed almost instantly," she said.