Money-transfer businesses that cater to Somali immigrants in Minnesota stopped accepting money bound for the famine-stricken East African country Thursday, a day before a key bank was due to stop processing the transactions.
Hinda Ali, a spokeswoman for the Somali-American Money Services Association in Minneapolis, said 15 money-transfer businesses stopped taking the money because they would no longer be able to execute transactions through Sunrise Community Banks. Minnesota represents the nation's largest Somali population.
"They don't have a bank account as of tomorrow," she said of the businesses, which are sometimes known as hawalas.
Sunrise Community Banks previously announced it would stop processing the transactions on Dec. 30 because it risked violating government rules intended to fight the financing of terror groups.
On Thursday, the bank released a statement saying it wouldn't process the transactions without a governmental waiver or similar arrangement. It said it would continue to seek one.
"Sunrise Community Banks has empathy for the Somali people during this very difficult and uncertain time," said the bank's statement. "We continue to work tirelessly with the community and government officials to create a temporary legal and regulatory solution."
Ali said the transfer businesses are a crucial lifeline to Somalis in Africa, where even $100 to $200 a month from immigrants in Minnesota could buy enough food to prevent starvation. She said Somalis in Africa also often need quick cash to get medical care, which must be paid for in advance there.
"A tremendous amount of lives will be lost because they can't get medical care," she said.
Garad Nor, who owns a money transfer business in Minneapolis, said he stopped accepting remittances Thursday. A few out-of-state banks still handle transfers to Somalia, he said, but he doubted they would continue to do so.
"I don't think we can continue this business," said Nor, who said he has helped Somali immigrants send money home since 1992.
Somali community organizers planned a demonstration in Minneapolis on Friday afternoon to raise awareness of the repercussions of the decision by Sunrise Community Banks.
Sunrise's decision came weeks after two Minnesota women were convicted in October of conspiracy to provide support to al-Shabab, a group at the center of violence in Somalia and one that the U.S. says is tied to Al Qaeda. Evidence at the Minnesota trial showed the women, who claimed they were sending money to charity, used the hawalas to send more than $8,600 to the terror group.
If the Sunrise Community Banks accounts close, Somalis in Minnesota have said they will find other ways to send money, but they are more laborious. One way is to send the remittances to another country, such as Kenya or Britain, and then have a third party pick up the money and re-wire it to Somalia.
Somalia hasn't had a functioning central government since 1991.
Source: The Associated Press
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