Still unable to wire their money to family back home, many Somali-Americans in Minnesota recently lined up to withdraw their deposits from U.S. Bancorp (USB) and Wells Fargo (WFC) or have vowed to do so soon.
The Somali community of Minneapolis-St. Paul had given the two largest banks there until last Friday to replace a remittance service that closed in December. A community bank that many of them had used halted the service because, officials at the community bank said, it was too hard to comply with anti-money-laundering laws while wiring money to the war-ravaged Somalia.
More than 1,000 people signed a petition Friday pledging to withdraw their money from U.S. Bancorp and Wells, according to Minnesotans for a Fair Economy, a community group that has taken up the Somali expatriates' cause. The list is mostly made up of Wells depositors, said Eric Fought, a spokesman for the community group.
It is unclear how many people have closed their accounts, but Minnesotans for a Fair Economy has posted a video on YouTube that shows protesters lined up outside of a Wells office. Spokesmen for U.S. Bancorp and Wells Fargo said this week that they would not share the number of accounts that have been closed by Somalis or other protesters.
Somalis figured the two large banks would have the power to help. Officials at both companies have expressed their sympathy with the Somalis' plight but said they too can't find a safe way to offer the services within the confines of the law. The bank spokesmen reiterated those sentiments this week.
The inability to help the Somali customers transfer money is the exception to an otherwise deep relationship, the Wells spokesman added. For instance, Wells says it has provided as much as $500 million in low-interest equity financing loans to the African Development Center in Minnesota, which makes loans that support primarily Somali businesses.
"Wells Fargo has provided tremendous support to, and received an equal amount of appreciation from, the Somali community in Minnesota," the spokesman wrote an email.
The Somali remittance issue is one of several reasons, including the foreclosure crisis, why Minnesotans for a Fair Economy was calling for people to withdraw their money.
Other groups have supported the Somalis.
One group staged a large Occupy Wall Street-style protest, called "The 1% Vs. Democracy," outside the Wells office at the same time as the Somalis lined up to withdraw funds.
Another group, the Harrison Neighborhood Association, which represents a low-income, multicultural community in the Twin Cities, is among the depositors vowing to withdraw money from Wells.
Larry Hiscock, the association's director, said it is closing its account largely because of the foreclosure crisis and the bank's role in improperly advising four Minnesota nonprofits on investments. In 2010, a jury in Ramsey County District Court found the company had violated the Minnesota Consumer Fraud Act and ordered the bank to pay $30 million to the organizations.
The Somali remittance issue wasn't one of its primary motivations, he said, but it certainly didn't help.
"We've been with Wells for 20 years, but we had a couple of concerns," Hiscock said. "They were servicing the largest number of foreclosures in our community, and people felt that Wells could be doing more."
The association plans to move its banking business to TruStone Financial, a credit union, Hiscock said.