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.
Robert Barba | American Banker | May 16, 2012
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 Fargo, 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.
Calls to U.S. Bancorp and Wells were not immediately returned on Wednesday.
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.
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 an affordable way to offer the services within the confines of the law.
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.
The Harrison Neighborhood Association, which represents a low-income, multicultural community in the Twin Cities, is among the depositors vowing to withdraw its 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.