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Banks close their accounts with Somali

Written by David Mitchell|Friday, 09 December 2011 12:34

Tens of thousands of Somalis living in Minnesota might be forced to find another way to send money to relatives in their homeland after a bank that handles the majority of the community's wire transfers said it was halting the service amid fears some funds could go to terrorists. Sunrise Community Banks plans to close its accounts with several Somali money transfer businesses after determining it could be at risk of violating government rules intended to clamp down on terror financing. Without Sunrise, many money transfer businesses known as hawalas signaled they would close Friday or next week because they can't execute transactions on their own.

Somalia, a country racked by war and famine, has not had a functioning government since 1991 and has no banking system.

The U.S. Treasury says it's estimated that Somalis in the U.S. send $100 million back home each year, and Minnesota represents the nation's largest Somali population. "It will touch every community member," said Dahir Jibreel, executive director of the Somali Justice Advocacy Center. "Everybody is scared. Everybody is worried. And they don't know what will come."Because there are no financial institutions in Somalia, members of the diaspora rely on sending money through hawalas, which require little paperwork and reach even the smallest towns.

Twists in the Money Transfer
Banks plans to close its accounts with several Somali money transfer businesses after determining it could be at risk of violating government rules intended to clamp down on terror financing.

However, the hawalas need banks to do the wiring for them, said Aden Hassan, a representative for the Somali American Money wiring Association. Many big banks stopped the transfers in recent years, saying they didn't have the manpower to keep up with the complex record-keeping required under rules designed to crack down on terror financing. Banks face huge penalties for violations, and many decided it wasn't worth the risk.Sunrise Community Banks, a group made up of independently managed banks including Franklin Bank, stepped forward to fill the need.

For more details of the plan visit:

http://www.foxnews.com/us/2011/12/09/bank-plans-to-close-accounts-with-somali-money-transfer-businesses-over-fear/b

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