Feds must reform remittance laws

Federal regulators recently pushed the last bank facilitating money transfers from the United States to Somalia to stop doing so.

Somalis across the nation, including many in Minneapolis’ Cedar-Riverside neighborhood, have sent $215 million in these remittances back to their home country annually, according to figures from Oxfam America.

The last bank performing the transfers, Merchants Bank of California, halted the remittances after the Office of the Comptroller of the Currency asked it to re-evaluate its strategies.

Some people, including Keith Ellison, DFL-Minneapolis, said the remittances were stopped as an attempt to prevent U.S. money from going to terrorist organizations with presence in Somalia.

“[The OCC’s] job is to stop terrorist money from flowing,” Ellison told the Minnesota Daily last week. “Somalia may crumble … but hey, it wasn’t [the OCC’s] fault because no terrorist money went there.”

Ellison recently met with a group of federal regulators and tried to figure out a way for Somalis to send money back to help their home country, but he said nothing came from the meeting.

Regardless of the reason for halting American citizens’ ability to send money to Somalia, lawmakers and regulators must find a way to let honest people send money to help their families in Somalia.

The federal government should reopen these channels and regulate them more wisely if indeed there is concern that remittances aren’t being handled correctly. They are too valuable a service for Somalis to be shut down without even a short-term alternative in place.