Office of Sixth Ward City Council Member Abdi Warsame
Feb. 6, 2015 (MINNEAPOLIS) Minneapolis City Council Member Abdi Warsame is calling on federal agencies to quickly find solutions to a critical, developing issue that affects the local Somali community’s ability to send funds to their families in Somalia. Each year, Somali Americans in Minneapolis send hundreds of millions to help their loved ones meet basic needs like food, schooling and healthcare. The flow of these funds is facilitated by Somali American Money Transfer Operators and represents a significant share of Somalia’s economy.
In the last couple years, major banks have started withdrawing bank accounts from Money Service Businesses because of regulatory concerns. The last remaining U.S. bank, Merchant Bank of California, has recently chosen to close accounts for all money transfer companies effective today (02/06/2015).This results in serious concerns about the continued viability of remittance flows to African countries, including Somalia.
“We want to make sure that our federal agencies are acutely aware of the importance of remittances to these countries and to U.S. residents,” said Minneapolis City Council Member Abdi Warsame. “This is a serious crisis and we are asking the federal government to do their utmost to ensure that remittances continue to flow through secure, legitimate channels. The closure of these regulated channels could benefit other networks that prey on informal money transfer systems that are invisible to regulators and law enforcement officials,” added Council Member Warsame.
“It would be a mistake to allow the only regulated networks for sending money back to Somalia to absorb such a crippling blow,” Warsame said. “Unless emergency measures are taken, many families will be cut off from their only source of income.”
The Merchants Bank account closure will impact almost all U.S. remittances to Somalia, and a number of Minneapolis based companies will be forced out of business immediately.
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