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A bill scheduled for a House vote Tuesday afternoon, designed to help Somali-Americans send money home, highlights the longstanding tension between anti-money laundering regulations and global financial inclusion.
May 6 -
Expatriates of Somalia threaten to close their accounts at U.S. Bancorp and Wells Fargo unless the banks wire their money to suffering family members back home. But the big banks, and others in the industry, say federal rules make it too hard to offer the service.
May 10 -
Still unable to wire their money to family back home, many Somali-Americans in Minnesota recently lined up to withdraw their deposits from U.S. Bancorp (USB) and Wells Fargo (WFC) or have vowed to do so soon.
May 16
The House of Representatives on Tuesday
The Money Remittances Improvement Act (H.R. 4386) attempts to streamline the regulation of money-services businesses, which are the primary means by which people abroad send remittances to Somalia. The bill authorizes federal and state regulators to share information about money-services businesses and other nonbank financial firms. It also allows the Treasury Department's Financial Crimes Enforcement Network to rely on state regulators' compliance examinations. (MSBs are currently subject to separate Internal Revenue Service and state exams.)
The measure is meant to reassure banks wary of doing business with money-transfer companies that federal and state regulators are working together on anti-money laundering and counter-terrorism efforts, according to a
Many banks have shied away from partnering with money-transfer companies out of the fear that they will be held responsible for illegal transactions under anti-money-laundering regulations. Somalia's money-service businesses are perceived as particularly high in risk. But remittances are badly needed in the war-torn country, where
The Senate vote on the bill has not yet been scheduled.
