U.S. Bancorp to Offer Money Transfer to Somalia

By Brian Browdie April 17, 2013, 5:39 p.m. EDT 1 Min Read

Consumer banking

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Community banking

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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.

By Robert Barba

May 10
Consumer banking

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Richard Davis, whose U.S. Bancorp reported a quarterly revenue slowdown, says the threat of higher rates actually would stir complacent corporate borrowers to seek more credit. But when that would happen is anybody's guess.

By Robert Barba

April 16

U.S. Bancorp (USB) is about to add a service for Somali immigrants in the U.S.

The Minneapolis company said Wednesday it has opened an account with Dahabshiil, an African money transfer firm, to allow Somalis to send funds to relatives and others living in Somalia.

"Over the past year, we've worked very closely with remitters seeking to send money to Somalia given the lack of a structured banking system in that country," Nicole Garrison-Sprenger, a U.S. Bancorp spokeswoman, said in an email. "We are pleased that we may have recently found a solution with one remitter in Minneapolis."

A year ago Somali-Americans in Minnesota withdrew money in protest from U.S. Bancorp and Wells Fargo (WFC) for failing to provide them remittance services. A community bank that many of them had used halted the service because, officials at the community bank had said, it was too hard to comply with anti-money-laundering laws while wiring money to the war-ravaged Somalia. Officials at U.S. Bancorp and Wells at the time expressed their sympathy with the Somalis' plight but said they had compliance concerns, too.

Minnesota is home to the largest Somali population in the U.S, according to the latest census data. Roughly 30,000 people with Somali ancestry live in the state.

Dahabshiil was founded in 1970 to enable people to send money to and from Africa, according to the company's website. The firm has 24,000 agent locations worldwide, including one in Minneapolis.

Garrison-Sprenger said that U.S. Bancorp and Dahabshiil continue to hammer out the arrangement, which was first reported by the Associated Press.

"Once that occurs, we will move forward in the near future on a trial basis," Garrison-Sprenger added. "Until then, it is too early to discuss particular details."

Garrison-Sprenger said U.S. Bancorp already partners with Western Union (WU) but that the account with Dahabshiil addresses the needs of Somalis who would like to access as wide a funds transfer network as possible.

Brian Browdie