The Money Remittances Improvement Act will streamline the regulation of money transfer operators.
Scott Paul is a senior humanitarian policy advisor at Oxfam America.
It wasn’t front page news but it should have been: President Obama signed the Money Remittances Improvement Act on Friday. In today’s Washington, it was a rare occasion when Congress passed a law and President Obama signed it. And good thing too, as the law’s entry into force is excellent news for the millions of migrants who work hard to support their loved ones back home.
The adoption of the Money Remittances Improvement Act (MRIA) will benefit the many migrants who send money through money transfer operators, which are non-bank financial institutions that provide remittance services to the unbanked poor, among others. Money transfer operators (MTOs) are a critical link to financially-excluded communities. And many poor families around the world rely on remittances to meet their most basic needs.
Somali migrants, for example, send home approximately $1.3 billion in remittances each year – more than Somalia receives in humanitarian assistance, development assistance and foreign direct investment combined. About 20 percent of the total comes from Somalis based right here in the United States, who send approximately $214 million—almost the equivalent of one year of US foreign assistance to Somalia—to families and friends each year.
In recent years, MTOs have found it difficult to maintain bank accounts in the United States as banks have become increasingly wary of the risks of banking money service businesses. If the trend of MTO bank account discontinuance continues, hard-working migrants and diaspora communities in the United States, and their friends and relatives in developing countries, will suffer.
The MRIA is an important first step in reversing the fortunes of money transfer operators and the communities they serve. By streamlining US government oversight of MTOs, the MRIA will reduce money laundering and strengthen banks’ confidence in the remittance industry. This is particularly welcome news for Somalis, who live in fear that bank account closures will disrupt their ability to receive life-saving help from their Somali-American relatives.
Indeed, it is worth celebrating. Oxfam thanks Minnesota Representative Keith Ellison, the bill’s sponsor, for his tireless work to ensure that Somali-Americans and all migrants in the US can freely and securely support their families abroad. It seems like Washington can do the right thing every now and then.