Ill-concieved restrictions

Since Jan. 1, there is a new state law requiring money-transmitting businesses to be licensed by the state and meet certain financial requirements. The law protects the consumers from companies never sending the money and instead holding onto it, said Mohamed Nor, manager of the Minneapolis branch of Dahib-Shil, one of the few companies in the world able to transfer money into war-savaged Somalia. But, he said, “I wasn’t seeing that happening anywhere.” This observation was echoed by other money transmitting companies and, more importantly, their customers.

“I haven’t seen anybody who had problems,” said Mohamed Hassan, coordinator of the outreach program at the Somali Community of Minnesota and also a customer. “This was one of the most credible systems I’ve ever come across.”

In fact, the law isn’t protecting consumers from a credible threat but instead is resulting in the closure of legitimate businesses across the state. For instance, before Jan. 1 Dahib-Shil ran six offices throughout the state, giving Somalis outside the metro area easy access to money-transfer services. Now only the Minneapolis office remains. The reason: Exorbitant financial requirements by the new laws have forced five of the six branches to close. The state now requires money transmitters to have a $100,000 net worth plus $50,000 more for each additional branch. Also, it requires a $50,000 surety bond for the first office and $10,000 more for each additional office. Most of the branches outside the metro area can’t afford this.

Since Jan. 1, more than 1,000 Somalis from St. Cloud have been forced to travel to Minneapolis weekly to send money to their families in Somalia, Hassan said. Those in Duluth are stuck with an even longer and more costly drive.

Still, after the closure of Al-Bakkarat – the Somali money-transfer company President George W. Bush accused of funding terrorism – there is a need for new security measures. We cannot allow groups such as al-Qaida to receive funding. Yet, if the state believed any of the other businesses were involved in such activity, they should have informed the Justice Department instead of passing clandestine laws, forcing businesses to close and leaving Minnesota Somalis with the dilemma of finding new ways to support needy family members in Somalia. The state needs to protect both its people and its businesses, not burden both with laws of ambiguous purpose.

Additionally, this law’s constitutionality is questionable. First, it appears to put an undue burden on interstate – as well as international – commerce. Second, if this law was in fact passed for security reasons, the government is likely conducting prior restraint, as it forces companies that haven’t broken any laws to close down.

Students and faculty should contact state representatives and tell them to join Minnesota Sen. Steve Kelly and Rep. Karen Clark in reconstructing this unreasonable law.