On Feb. 6, 2015, U.S. banks stopped money transfers to Somalia because of strict regulations set by the Office of the Comptroller of the Currency over concerns of money laundering and funding for terrorist organizations. The decision has left Somalis who depend on cash remittances for survival without critical financial support. Remittances bolster the local economy and serve as a major source of income for families and individuals.

The Somali diaspora sends home more than $1.2 billion annually — a sum larger than foreign aid and investments combined. Remittances are a crucial component of the Somali economy, making up over half of the nation’s gross national income. An estimated 73 percent of Somali households use the cash transfers to pay for food. Remittances help build schools and hospitals and pay for school fees. Nearly 80 percent of Somalis receive remittances from a single person, highlighting the dependence on the money transfers from abroad. Somalis have created efficient money wiring agencies, known as hawalas, to get around the lack of a formal banking system in Somalia. It has been the country’s rare lifeline over the last two decades.

Major U.S. banks stopped wiring money to Somalia years ago. The final holdout, the Merchants Bank of California, handles roughly 80 percent of the remittances from the U.S. to Somalia. But it had been under pressure from wary regulators to monitor the flow of cash transfers there. The bank decided to shutter the service to avoid potential penalties. But there is no evidence linking hawalas to extremist groups. The pre-emptive measure was made at the expense of millions of people in Somalia.

The end of bank money transfers, the only legal means for Somalis in the U.S. to send money to needy families back home, has rattled the Somali-American community. Community leaders and youth organizers are working with elected officials to exert pressure on U.S. banks and regulators.

"A disruption in remittances could reverse the limited gains that the Somali government and the international community has made to rid Somalia and the greater Horn of Africa of terrorism,” a group of U.S. lawmakers, said in a letter to Secretary of State John Kerry and Treasury Secretary Jack Lew on Feb. 6. Led by Rep. Keith Ellison, D-Minn., whose district includes the largest Somali-American population, the lawmakers are scheduled to meet with Kerry on Feb. 27. But members of the Somali community say the response lacks the urgency that the situation demands.

Over the last few weeks, the media have approached Somalis to help explain the effects of halting remittances. But unsurprisingly, U.S. media are primarily interested in an anti-terrorism narrative that characterizes its coverage of Somalia and its diaspora. Years of conflict have left Somalia without a central banking system. Somalia is now asking U.S. banks to reconsider their decision.

"We need to find a permanent solution to keep open this vital humanitarian lifeline,” Somali Prime Minister Omar Abdirashid Sharmarke told the Associated Press on Feb. 12. Such a solution requires a concerted effort from the community at large. Building awareness continues to be critical to avert potential humanitarian crisis.

In response to this situation, we created the hashtags #IFundFoodNotTerror and #Somalis4Remittances on Twitter to raise awareness. The campaign was widely received on Twitter and Tumblr and has been instrumental in emphasizing the urgency of the crisis. Young Somalis have taken to social media to voice their concerns about the consequences of halting remittances for their families and communities in Somalia. Activists have also expressed outrage at the U.S. policies and the global narrative on the "war on terrorism.”

Terrorism has been used to label and simplify Somali experiences. Somalis carry the dual weight of being both blackand Muslim. As with other Muslim communities, Somalis have been increasingly targeted since 9/11. In Toronto, for example, funding has gone into the surveillance of Somali communities, a theme that echoes across North America. Remittances serve as another pretext to monitor and problematize the community. 

The hawala system was built around trust and community connectedness. Equating cash transfers to families with funding for terrorist activities negates its effect on assisting with the costs of housing, school, medication, food and other necessities. Negative media coverage has further linked Somalis and remittances with terrorism.

The Somali diaspora is rallying behind efforts to rebuild the country, not least through the money provided by remittances. The U.S. is policing and criminalizing a lifeline for Somalia’s economic stability and rebuilding efforts. The U.S. banks’ decision to halt money transfers to the country gives little consideration to Somalia’s vulnerability and the impending humanitarian crisis.

However, the U.S. is not the only country policing Somali remittances. In 2013, Barclays Bank in London cracked down on Dahabshiil, the most widely used money transfer provider in Somalia. Unlike with the abrupt cessation in the U.S., Barclays won an interim injunction to keep the accounts open until Dahabshiil could find an alternative banking solution. Barclays closed Dahabshiil’s accounts in 2014. Australia’s Westpac bank is planning to close its accounts with Somali hawalas next month.

Somalia is making great economic and political strides after years of lawlessness. Ending the flow of remittances will jeopardize the country’s reconstruction efforts. Studies have shown that remittances are one of the most effective forms of sustaining development in Somalia.

Despite recent troubles, Somalis from all walks of life remain optimistic about the country’s future. Cutting off remittances will extinguish the feelings of hope for Somalia’s stability and reconciliation. The United States is one of the largest sources of humanitarian aid to Somalia. It has provided nearly $230 million in the last year alone. On Feb. 25, President Barack Obama nominated the first U.S. ambassador to Somalia in more than 20 years, underscoring Washington’s deepening engagement. The suspension of remittances is counterproductive to U.S. efforts to eliminate terrorism and support Somalia’s progress. More important, it will likely to lead to starvation, economic and political instability.

U.S. lawmakers, bank directors, regulators, hawala operators and Somali community leaders should work together to find a lasting solution to avert this financial crisis. Ultimately, cutting off this lifeline is not a viable solution. A new method of money transfer can do both: maintain the flow of remittances to Somalia and ensure that the money doesn’t end up in the wrong hands.

Britain’s Safer Corridor initiative provides a good starting point. The British government is working with the World Bank to closely monitor the flow of funds to Somalia. The initiative requires banks to exercise due diligence and Somali recipients to furnish biometric ID cards. Along with the creation of a centralized banking system in Somalia, a similar measure can help alleviate the U.S. regulator’s anxiety over remittances to the country.