Editors note: I’ve been away so hopefully will be able to catch up with the news in a bunch of short posts this morning.
The banks (and the feds) fear, of course, that the money being sent from Mom & Pop money transfer companies will end up in the hands of terrorists.
You have to sign up to get the full story at Foreign Policy, but here is how the story begins thanks to blogger Michele Kearney:
Rules designed to keep money out of the hands of terrorists could soon cut off support to millions of ordinary East Africans too. Last week, another financial institution — Merchants Bank of California — started closing accounts belonging to companies that collect money from African immigrants in the United States and send it to Somalia, Eritrea, Ethiopia, and other African countries.
The money-transmitter companies function like smaller versions of Western Union and MoneyGram, but they can send money to far-flung African villages that the big guys don’t serve. They rely on banks to make the international wire transfers necessary to get the money there. It’s part of a worldwide system of informal financial transactions between residents of impoverished countries and the friends and relatives living abroad who regularly send them money. The World Bank estimates that immigrants will send home $436 billion this year.
Minnesota Rep. Keith Ellison is one of the chief advocates for keeping the money flowing to Somalia. And, the more refugees we resettle, the more money that flows out in remittances to the third world.