Regulators are far more aggressive in enforcing anti-money-laundering laws than necessary, said Scott Paul, who monitors international remittances for Oxfam America. "Bank examiners are incredibly risk-averse, probably more than they need to be to enforce the Bank Secrecy Act," Paul said.
Preserving a Lifeline
Humanitarian groups and elected officials have asked regulators to approve a compromise, to allow remittance funds to continue to flow to Somalia. Many Somalians depend on remittances as their only source of money.
Which Countries Are Next?
Some humanitarian groups are worried banks may exit other countries that are deemed high-risk by U.S. regulators, like Iraq, Syria, Ethiopia and Kenya. "Both [Ethiopia and Kenya] have large refugee populations dependent on these funds and are at risk of being cut off," said Liat Shetret of the Global Center on Cooperative Security.