http://www.npr.org/blogs/parallels/2014/07/08/328183695/as-wire-transfer-options-dwindle-somali-americans-fear-a-lost-lifeline
As Wire Transfer Options Dwindle, Somali-Americans Fear A Lost Lifeline
by Matt Sepic
July 08, 2014 3:35 AM ET
from NPR
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3 min 54 sec
The cash transfers in question are used by Somali-Americans like
28-year-old Goth Ali, who supports family members back home. Ali works at a
cell phone store in Minneapolis, in a Somali shopping mall where you can
get everything from traditional clothing and rugs to lunch and a haircut.
At the mall's three money service businesses, you can wire cash anywhere in
the world, through the money transfer system called hawala. Ali says every
month he sends $400 to $500 to his siblings, including an older brother in
Somalia who, despite owning a small business there, struggles to make ends
meet.
"It's not enough to provide for his family," Ali says. "The money we send
to Somalia is a lifeline."
The money transfer business is tightly regulated, says hawala operator
Shakir Hussein. "If somebody walks in right now, first I require
identification," he says. "Even if you're sending $50, I have to get
identification."
The charity Oxfam says businesses like Hussein's help Somali-Americans send
more than $214 million to Somalia every year. Oxfam says remittance
payments from the U.S. and elsewhere account for an astounding 40 percent
of Somalia's economy.
But hawala dealers, also called hawaladars, need bank accounts to operate --
and most American banks are reluctant to work with them, fearing the money
could wind up in the wrong hands.
And it has: In 2011, two Somali-American women from Rochester, Minn., were
convicted of funneling money to the terror group al-Shabab.
That led a Twin Cities bank to get out of the wire transfer business. Other
banks eventually stepped up to fill the need, but now Merchants Bank of
California -- one of the last to work with hawaladars -- says it's pulling
the plug at the end of the month.
Merchants officials didn't respond to repeated calls for comment. But
banking consultant Bert Ely says many in the industry fear severe penalties
for transferring dirty money -- even accidentally.
"There've been some banks, particularly large banks, that have been fined
very significantly for violations in this area," Ely says. "And so the safe
way to play it is just not to do the business."
On top of the financial threat looming over Somalia, there's a natural one.
Aid agencies in East Africa say there's a strong possibility of another
drought in Somalia, which could lead to a repeat of the 2011 famine that
killed an estimated 260,000 people.
Jaylani Hussein, a board member with the Twin Cities-based American Relief
Agency for the Horn of Africa, says it's urgent that Congress pass
legislation to make it easier for banks to handle wire transfers.
"This is an issue that just needs to be resolved now -- otherwise we'll be
talking in August and talking about the number of people we've lost," he
says. "And we have something we could do today to save lives."
A bill from Democratic Rep. Keith Ellison passed the Republican-controlled
House in May and is now in the Senate. Ellison says it streamlines some
money wiring regulations that will reduce the risk for banks.
Ahmed Ali, who wires cash to relatives who farm in rural Somalia, says his
money can make the difference between them eating or starving.
"Without that money they cannot support their livestock," he says. "There's
no government functioning down there now. So that's why this money helps a
lot."
If Somalia experiences a drought as forecast, the ability to wire money
will grow even more important to Somali-Americans and their families back
home. And aid groups say if the money wiring problem is resolved, they'll
be able to spend less time lobbying -- and more time trying to prevent
another famine in Somalia.
Received on Tue Jul 08 2014 - 08:26:11 EDT