Insight News

Feb 13th

Ellison's Money Remittances Improvement Act: Helping support families back home in Somalia

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ellison abdiAcademy Award nominated actor and former Minneapolis resident Barkhad Abdi was in town to support the system of sending money from loved ones abroad to his native land of Somalia.

The acclaimed actor and Tom Hanks co-star of "Captain Phillips," Abdi was on hand for a public forum on remittances – the method of transferring money to individuals in Somalia, a country with no banking system. The May 12 event was hosted by OXFAM America and African Development Solutions at Safari Restaurant, 3010 4th Ave. S. in Minneapolis. Along with Abdi, Rep. Keith Ellison sat on a panel with local community leaders, including Kristin Toretta of the U.S. Department of the Treasury and Aden S. Hassan, a Kaah Express Compliance Officer.

Ellison's Money Remittances Improvement Act, which recently passed the U.S. House with bipartisan support, is said to improve oversight of non-bank financial institutions such as money service businesses while reducing duplication for regulators and businesses. According the bill's author, by allowing federal regulators to utilize state exams, regulators are able to more efficiently ensure compliance with laws and regulations while also reducing costs for the regulated firms themselves.

Under current regulations most banks are reluctant to allow people to transfer money to Somali money service businesses, knows as hawalas, because of the cumbersome paperwork and fear of being targeted for hefty fines under laws such as the Patriot Act that was enacted following the attacks of Sept. 11, 2001.

"Today if I wanted to send money to my uncle in Somalia I'd go to the local hawala and within a few minutes I get a text (from him) saying he received the money," said Abdi, who played the lead pirate in the action drama "Captain Phillips." "The victim here is Somalia. The people who suffer are the Somali people."

Ellison, who pushed for the House's passage of the bill along with fellow Minnesota legislator Rep. Erik Paulsen and Rep. Sean Duffy of Wisconsin – both Republicans – called on the nearly 100 people in attendance to lean on their senators to get the bill passed in the upper chamber.

"We didn't wait around and hope for the best, we had to work at getting this bill passed," said Ellison. "We've got to work and call our senators to the bill passed in the Senate. Minneapolis and St. Paul is Ground Zero for the Somali community in America. That means you have a strong political force. You've got to convert that into meaningful policy for the community."

Minneapolis Ward 6 Councilman Abdi Warsame applauded Ellison for championing the Money Remittances Improvement Act and getting it passed through a Republican controlled Congress.

"I never believed House run by our Republican friends would ever pass such a bill so it's a testament of the work (Ellison is) doing," said Warsame. "What's missing is the voice of the Somali-American community. Our community has to support this."

Warsame pledged to contact the state's senators to urge their support of the bill.

Because Somalia does not have a recognized banking system, international governments speculate much of the money transferred to the African nation goes to fund various terrorist organizations. Kristin Toretta of the U.S. Treasury Department said while there are documented cases of funds being funneled to terrorists, the vast majority of the $1.5 billion that is sent annually is for legitimate purposes.

"The Treasury recognizes the important role of remittances to Somalia and the Somali economy," said Toretta. "Unfortunately, as long as transfers have existed, so have ways to misuse the system, but the vast majority of transactions are undoubtedly legitimate."

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