New law will restore a financial lifeline to Somalia

Tuesday August 5, 2014

Via MPRnews:

A bill passed Friday by the U.S. Senate may soon make it easier for Somali-Americans to again wire money to relatives in east Africa.

The Senate approved legislation aimed at helping immigrant money-wiring businesses and sent the bill to President Barack Obama, who is expected to sign it.

For years, many Somali-American money transfer businesses in the Twin Cities have had a hard time staying in business. They need banks to operate, but many bankers fear running afoul of anti-terrorism financing laws.

A similar measure, the Money Remittances Improvement Act, passed the House in May. The bill will streamline banking rules to improve security and cut redundant state and federal bank reviews, said U.S. Rep. Keith Ellison, a Democrat who represents Minnesota's 5th District.

Ellison and U.S. Rep. Erik Paulsen, a Republican who represents Minnesota's 3rd District, sponsored the House version, which allows the states to enforce some federal banking regulations.

That will make it easier for banks to work with money transfer firms, Ellison said.

"It suggests to the agencies that regulate in this area that they should have an eye toward stopping bad transactions from happening, but also making sure that in our pursuit of ending the bad transactions that we don't cut off the good ones too, which unfortunately we've been doing," he said.

According to the charity Oxfam, cash transfers from the global Somali diaspora account for as much as 40 percent of Somalia's economy.

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