The House of Representatives on Tuesday approved a bill that aims to make it easier for Somali-Americans and other immigrants to send money to friends and relatives in their home countries.
The Money Remittances Improvement Act (H.R. 4386) attempts to streamline the regulation of money-services businesses, which are the primary means by which people abroad send remittances to Somalia. The bill authorizes federal and state regulators to share information about money-services businesses and other nonbank financial firms. It also allows the Treasury Department's Financial Crimes Enforcement Network to rely on state regulators' compliance examinations. (MSBs are currently subject to separate Internal Revenue Service and state exams.)
The measure is meant to reassure banks wary of doing business with money-transfer companies that federal and state regulators are working together on anti-money laundering and counter-terrorism efforts, according to a press release from the office of Rep. Keith Ellison, D-Minn. Ellison introduced the bipartisan bill with Republican Rep. Erik Paulsen, also from Minnesota a state with the largest Somali population in the U.S., according to census data.
Many banks have shied away from partnering with money-transfer companies out of the fear that they will be held responsible for illegal transactions under anti-money-laundering regulations. Somalia's money-service businesses are perceived as particularly high in risk. But remittances are badly needed in the war-torn country, where 41% of the population depends on funds sent from abroad to meet basic needs including food, rent and medical expenses.
The Senate vote on the bill has not yet been scheduled.