Somali-Americans say they're closing their accounts with US Bank and Wells Fargo, a fallout from the banks' decisions to stop facilitating money transfers to Somalia.
Demonstrators from the Somali and Latino communities are marching alongside economic-justice activists Friday afternoon in downtown Minneapolis to protest recent challenges in sending cash to families in their war-torn homeland.
Hindia Ali, of the advocacy group Somali Action Alliance, said she is moving her private banking account from Wells Fargo to a credit union.
"Wells Fargo is not doing business with the only lifeline and vehicle we have to send money to our loved ones, so it doesn't make any sense for us to have our money there with them," Ali said. "We're only going to do business with banks that supports what we need."
Ali said about 1,000 other account holders with US Bank or Wells Fargo plan to boycott the businesses.
Community leaders have drawn attention to the issue since December, when St. Paul-based Sunrise Community Banks, one of the last remaining U.S. banks to partner with the Somali money-transfer businesses, halted the transactions in fear of running afoul of counterterrorism laws.
Since then, the money-transfer businesses, also known as hawalas, have searched far and wide for other banks to fill the void.
Some hawalas were able to resume operations after two banks in Seattle agreed to facilitate the transfers. But the situation remains shaky, said Said Malin, president of Amana Money Transfer Co. in Minneapolis.
"Some people think we're still in business and everything's OK," said Malin. "But things are getting worse and worse. Every time the banks hear the news, they close the accounts."
Sunrise Community Banks left the hawala business after two Rochester women were convicted in October of funneling money to the terrorist group al-Shabab in Somalia.
There is no formal banking system in Somalia, which has been mired in civil war and has lacked a strong central government for more than 20 years. Money transmitters have provided an essential way for Somali-Americans to support families left behind in the east African nation. The remittances — an estimated $1.6 billion annually from around the world, according to the CIA — have also helped keep the Somali economy afloat.
Somali community leaders met with Wells Fargo officials in January to pressure them to work with the community. The bank's response at the time "is the same as it is today," said Peggy Gunn, a Wells Fargo spokeswoman. "We're very supportive of the community. We regret that we can't provide assistance to them and their much-needed desire to send money to their home country."
Gunn said she hopes that Somali-Americans will continue to use the bank's services after considering Wells Fargo's commitment to the community through volunteerism and as an employer.
"If they choose to move on, we have to understand that and respect their option to do so," she said.
US Bank representatives met routinely with the money-transfer businesses over the past several months, and explained "what is needed to meet our requirements," said spokeswoman Nicole Garrison-Sprenger. For example, she said, when someone sends money outside of the country, the bank must have proof that the company receiving it knows its customer and can validate the identification of the person picking up the cash.
"We have a responsibility to the nation and the regulators to adhere to the laws and ensure that the money gets transmitted ends up in the right hands," she said. "Most countries have a formal system in place. There is no formal system for receiving money in Somalia."
Garrison-Sprenger said the bank would be willing to partner with the remitters if the businesses can demonstrate compliance.