U.S. Raids 17 Businesses That Send Cash Abroad

The problem, he said, is that states are applying consumer protection regulations to ethnic businesses that do not need them. The hawalas have had a stellar record in delivering customers' cash, he said.

"Trust has been a motor of efficiency in this informal business. It has regulated itself," Passas said.

Regulators aren't convinced.

"As a consumer, I would certainly like some protection before I give my money to someone to send halfway around the world," said Joe Face, Virginia's commissioner of financial institutions.

To get a Virginia money-sending license -- which can cost a company hundreds if not thousands of dollars a year -- each senior officer in a business must file a biographical and personal financial history. Face said the licenses are typically issued in 45 to 60 days. The money transmitters must also post a surety bond or other financial guarantee.

Doody said the crackdown is not aimed at immigrant workers but at ensuring that the financial system cannot be exploited by terrorists. "We're not concerned with someone trying to get $100 home to Mom," he said.

For the immigrants who gather at the Eritrean cultural center, that is precisely the issue.

"We're stuck," said Mesmea, the cabdriver, who said many immigrants are now giving wads of cash to friends to carry to Eritrea on their trips home. "In the end, we'll be worried how to send the money."