Huntington Bancshares says it will close what's called "remittance agency accounts" at the end of the year. It is the last bank in the region to keep such accounts but it says they're too costly. The bank's action has drawn the ire of the city's Somali-American community. Many Somalis use the accounts to transfer money to relatives in Somalia and in refugee camps in Kenya and Ethiopia. WOSU's Tom Borgerding has a report.
Liibaan Ishmael of Columbus regularly sends money to his mother and other relatives in Kenya and Somalia. He uses a locally owned business to quickly get cash from Ohio to family members in a region wracked by war and a refugee populaton.
"As you know, Somalia has been in perpetual civil war since 1991. There are no banks, there are no schools, there's no infrastructure whatsoever. And, the money that's sent from here is what's keeping those people going."
Ishmael says money transfers are the largest foreign currency infusion into Somalia and surrounding camps. He says the shutdown of remittance agency accounts by Huntington and other banks would bring what he calls a crisis for his family and for the region.
"If we don't have the opportunity and the chance to send that money via our equivalent of Western Unions, if you will, money transfers. Then, my family will be in a bind. The'll be in a situation where they won't be able to send their kids to school, they won't be able to buy their groceries, they won't be able to pay the rent." Says Ishmael. Isak Warsame is president of Dahabshil Incorporated, a local transfer company. He says the Somali population uses his service because its efficient and because he enjoys the trust of his customers
"When they send the money from us, they get it the next day, the next hour."
Warsame says the average amount of individual money transfers is 200 dollars but some amounts can go as high as $10,000 dollars if someone in the U-S wants to provide an income-generating business to their relatives. But, Huntington spokeswoman Jeri Grier says post Nine-Eleven legislation is forcing the bank's hand. The Bank Secrecy Act and the Patriot Act require that bankers know their customers and evaluate any risk to their banking business.
"We have determined that we are not able to economically provide banking services to these types of customers. They typically engage in money transfers on behalf of third parties through Huntington or a non publicly-traded money transmitter." Says Grier.
Huntington is the last bank in central Ohio to offer these services to remittance agency accounts. Other Central Ohio banks closed such accounts earlier. Steve Houdak, Chief of Public Affairs for the Financial Crimes Enforcement Network at the U-S Treasury Department says the bank rules are not targeted at Somalia. But, he says the lack of a central banking system in Somalia makes it harder for U-S banks to know their customers.
"Somalia is particularly difficult because you don't have to go too far beyond the front page of the newspaper to see that Somalia is a dangerous place and the central banking system is pretty much collapsed. So, it poses a particularly difficult problem. The rules that we've established are applicable across the board. They're not targeted at Somalia or any country in particular." Says Houdak.
But, Liibann Ishmael, says he takes the closing of the remittance agency accounts personally.
"It is not money that is money laundered or state money. This is money that I worked. I worked for it. I paid taxes and I'm sending money to my family so they can keep their life going. If I'm not given that opportunity and there's no alternative for me to send that money then I think that would be a slap in the face." Says Ishmael.
The Somali-American Chamber of Commerce says its is working to find a solution that allows continued transfer of monies from the U-S and from Columbus to Somalia and surrounding camps.
Tom Borgerding WOSU News