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Columbus, Ohio
Banks close accounts used by local refugees to send money to homeland
For months, Somalis living in Columbus have complained that it has become increasingly difficult to send money home to family members because of banking-industry fears that the funds could end up with terrorists.
Huntington, JPMorgan Chase and Charter One are among the banks that have closed accounts set up by remittance companies, said Omar Tarazi, a local lawyer who has worked with the Somali American Chamber of Commerce and several remittance companies.
Somali leaders said remittances that refugees send home are a lifeline to families and friends struggling in the war-torn African nation. It has few banks, so remittance companies are crucial to sending money home.
The leaders say banks fear being held liable if authorities discover that the money is funding extremists. The Patriot Act requires due diligence of banks in making sure that funds are tracked.
According to the U.S. State Department’s Web site, remittances totaling $1 billion were sent to Somalia from around the world in 2008.
“The only reason (families there) are alive is the money,” said Mahdi Taakilo, publisher of the Somali Link newspaper in Columbus. “They can feed their hungry kids. They can buy clothes.”
Tarazi said there should be a balance between national security and humanitarian issues.
“How much of a threat is it that it will get into terrorist hands in Somalia?” he said. “If you cut this out, it will push people into a more desperate situation.”
And that could lead to more destabilization in a country that has been in chaos for nearly two decades.
Somali President Sheik Sharif Sheik Ahmed asked Gov. Ted Strickland and Mayor Michael B. Coleman for help on Oct. 5 when he visited Columbus on a tour of several U.S. cities.
“This is the way millions of people get monthly stipends for living expenses,” Abdulkareem H. Jama, the Somali president’s chief of staff, said after the visit.
“There have been some issues in the U.S. in particular, Ohio more so than any other state.”
There’s little the governor can do, said his spokeswoman, Amanda Wurst. It’s a federal and banking matter, she said.
The New York-based National Money Transmitters Association supports a bill that U.S. Rep. Carolyn Maloney, D-N.Y., introduced this year that would loosen burdens on remittance companies and banks.
The bill notes that the Treasury Department urges banks to make sure that money-service businesses are complying with anti-money-laundering laws.
That places banks in the position of quasi-regulators. Instead, banks have closed the accounts so they don’t “incur the burden, risk or potential liability for undertaking a de facto regulatory function.”
U.S. Rep. Pat Tiberi, a Republican from Genoa Township, first heard concerns from local Somalis about a year ago and has met with several bankers.
A Minnesota bank that works with remittance companies is willing to share best practices with banks in Ohio, said Tiberi spokeswoman Breann Gonzalez.
The Minneapolis-St. Paul area is home to the largest population of Somalis in the country. Columbus is No. 2.
“We understand both sides,” Gonzalez said. “Somalis here want to help their relatives back home. We understand banks’ concerns about liability if money gets into the wrong hands.”
