Calls for U.S. regulators to reform money-transmittal rules are growing after a California bank cut off remittances to Somalia.

Twelve Democratic lawmakers last week requested an emergency meeting with Secretary of State John Kerry to find a plan to re-open the remittances pipeline to Somalia. Those payments all but ceased after Merchants Bank of California, the largest financial institution that had been accepting money transfers to Somali, stopped processing the remittances on Feb. 6, under pressure from financial regulators.

Remittances from the U.S. have for years been a crucial source of support for many in Somalia, which lacks a banking system and instead operates through a system of informal money-transmittal companies. Regulators argue that these firms can easily be used to launder money and fund terrorism, and have discouraged banks from working with them. The $81 million-asset Merchants had been the largest conduit for such payments after larger banks gradually dropped out.

The lawmakers' letter says that without the payments, a third of Somalis may be unable to meet basic needs, which "could throw the country and its already vulnerable economy deeper into crisis." The letter was sent to top banking and financial regulators, as well as to Kerry.

"To protect our national security and avoid exacerbating a humanitarian crisis, we must identify an emergency solution to prevent the disruption of remittances to Somalia," the letter said. "We believe it is critical that every federal agency with jurisdiction on this issue must work toward formulating a sustainable framework for remittance payments as quickly as possible."

On Sunday, Somali Prime Minister Omar Abdirashid Sharmarke urged U.S. banks to resume accepting remittances to his country and said that he had reached out to American lawmakers to find a way to address their concerns and re-open the pipeline.

"I will seek to appease their concerns and I will do everything in my power to find a permanent legitimate and transparent solution," Sharmarke said, according to a report from Voice of America.

Criticism of the U.S. regulators' approach intensified after Merchants Bank told its customers that it would cease accepting the payments on Feb. 6. The Carson, Calif., bank had been ordered by the Office of the Comptroller of the Currency to improve its Bank Secrecy Act compliance, and had planned to shut off the transfers in September, before reversing course.

With the pipeline cut off, some lawmakers are asking regulators to find a solution. Representative Keith Ellison, D.-Minn., addressed Congress Wednesday about the need to permit transfers to Somalia. His district is in Minneapolis, home to the largest population of Somali immigrants in the country.

The freeze in remittances "is catastrophic," Ellison said. "Now Somali-Americans cannot send money to their loved ones, and Somalis can no longer receive money that they depend on for food, school fees and medical bills."

Along with Ellison, the letter to Kerry and regulators was signed by senators Amy Klobuchar (D-Minn.), Al Franken (D-Minn.) and Sherrod Brown (D-Ohio) and representatives Maxine Waters (D-Calif.), Erik Paulsen (R-Minn.), Stephen F. Lynch (D-Mass.), Juan Vargas (D-Calif.), Adam Smith (D-Wash.), Chellie Pingree (D-Maine), Gwen Moore (D-Wis.) and Barbara Lee (D-Calif.).

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