# FATCA rules and banking



## pm16 (Mar 9, 2016)

Hello:

We are moving to Mexico and I'm reading up on the new FATCA rules that have discouraged banks from providing services to expats. I'm even read where US banks close accounts on people living abroad. Has anyone experienced this problem? Are there banks that are not prone to closing your account in the US? We use a well known bank that we've heard has sent letters to expats regarding closing their accounts.

I've read that credit unions are more stable in regards to maintaining your account open in the US.

We already use a credit union and will look into their practices regarding expats.

Confused with the seemingly no options.


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## michmex (Jul 15, 2012)

pm16 said:


> Hello:
> 
> We are moving to Mexico and I'm reading up on the new FATCA rules that have discouraged banks from providing services to expats. I'm even read where US banks close accounts on people living abroad. Has anyone experienced this problem? Are there banks that are not prone to closing your account in the US? We use a well known bank that we've heard has sent letters to expats regarding closing their accounts.
> 
> ...


Many expats maintain their USA bank accounts and simply use a relative's address or a mail forwarding service to keep from changing their USA address to their new Mexico address. For many expats their USA bank account is sufficient to fund their activities in Mexico by utilizing cash withdrawals from a Mexican bank ATM with their USA debit/credit card. Most USA banks are becoming very leery of having accounts with foreign based individuals due to requirements imposed upon them to prevent money laundering and tax evasion under the Bank Secrecy Act (BSA 1970) and Sections 312 and 326 of the USA Patriot Act 2001.

Others obtain a Mexican bank account. Some banks and/or their local branches are more receptive of an expats business than others. I had no problem with BBVA Bancomer when opening a checking account. Others do not want to be saddled with reporting requirements. Check recent discussions in threads regarding the issue and banks.

If your accounts are below a certain balance you will escape the FBAR - FACTA reporting requirements for USA individuals. Even if above the requirements are not particularly onerous - a pain in the butt maybe.


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## joaquinx (Jul 3, 2010)

I'm with Bank of American and both checking and credit cards accounts are listed under my Mexican address. In fact, BofA recently UPSed my new credit card to me. 

My Mexican bank is HSBC and a few months ago, the agent from my branch, which is two blocks away, came up to my house and asked me to come down to the bank and fill out a W-9, compliance form. HSBC is fully compliant with FATCA.


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## pm16 (Mar 9, 2016)

Thank you all! We have a better idea of how this translates to our day to day banking. We will keep our US based bank account and will open a Mexican one. We are not in the higher income bracket so I think we'll be fine.


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## eastwind (Jun 18, 2016)

I have a plan regarding this topic, and I'd be interested in comments/criticisms that might save me from running into trouble. 

I subscribed for a year to a commercial mail receiving agency in texas. It costs $185 for a year and they scan all your mail and email you the images, and shred the paper unless you give them a per-item instruction within two weeks of receiving it. You can have them mail something on, but you pay postage for that extra to the $185. I wasn't sure at the time what country I'd end up in, or if I'd stay in that country forever, so it seemed like a good thing to use. I haven't tried changing my financial accounts mailing addresses to it yet but will soon. If that doesn't work, then I'll not resubscribe. It gives me a street address in Texas.

Then I plan to open a new bank account with HSBC from the US, and give them that Texas address. I'll link that up to my financial accounts and if I was receiving social security or pensions (not yet) they'd go in there. Should be no FATCA requirements or issues with that account. 

Then I plan to open another account with HSBC from Mexico, in pesos of course, and link them, and use my Mexican address for the Mexican account. I think as long as I keep the balance on that account under US$10,000 I have no reporting to do. That will be easy, I'll do a monthly transfer from one HSBC account to the other to convert to pesos. I'm hoping that I'll be able to do that online. Then I'll use the Mexican account to draw pesos with an ATM card from an HSBC ATM, and be able to pay things like the phone bill with a check from the local bank. 

Others may see this as too much trouble, but I don't. I like the idea of having an account with only a little money in it that I use my ATM card to draw from, it increases safety in case the card gets stolen and the account drained. The US account will be my security where I keep my next few months of living expenses, and I won't carry the card(s)s for that around with me day to day. I'll get a credit card with the US account for making US payments. I am not counting on being able to get a credit card with the Mexican account as somebody said that was hard to get.

Barring the criticism that this is too much trouble or too elaborate, does anyone know of a reason this plan won't work or won't work well? Particularly w.r.t. FATCA and FIN-whatever rules.


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## TundraGreen (Jul 15, 2010)

eastwind said:


> I have a plan regarding this topic, and I'd be interested in comments/criticisms that might save me from running into trouble.
> 
> I subscribed for a year to a commercial mail receiving agency in texas. It costs $185 for a year and they scan all your mail and email you the images, and shred the paper unless you give them a per-item instruction within two weeks of receiving it. You can have them mail something on, but you pay postage for that extra to the $185. I wasn't sure at the time what country I'd end up in, or if I'd stay in that country forever, so it seemed like a good thing to use. I haven't tried changing my financial accounts mailing addresses to it yet but will soon. If that doesn't work, then I'll not resubscribe. It gives me a street address in Texas.
> 
> ...


Check to make sure that it is easy and free to move money between an HSBC dollar account in the US and an HSBC peso account in Mexico. Some international banks treat their branches in different countries as completely independent banks, BBVA for example.

I do something similar with a Mexican peso account and debit card for peso expenses. But I also get pesos by taking money out of a US dollar account at an ATM. The bank doesn't charge me any fees and the rate is good. I had a peso credit card briefly but they charged a monthly fee even when I didn't use it, so I turned it in.


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## joaquinx (Jul 3, 2010)

I agree with Tundra in that banks with the same name in the US and Mexico give you some courtesies but not much more. On the subject of checks: they are seldom used in Mexico unless you are a business. You can pay your utilities either at a supermarket, your bank, at the utility's office/branch, or online. I pay TelCel and Megacable online and CEF at the supermarket. As a caution, there are no oopsies with a NSF check. It is against the law and could land you in deep doodoo.


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## dwwhiteside (Apr 17, 2013)

With regard to FATCA, you are correct that if you never have more than $10,000 combined in all "off-shore" (i.e. non-US bank) accounts, you do not need to file a FATCA report. However, be VERY careful and VERY clear about the exact process and exact cost of moving money between your US and Mexican accounts. 

Depending on your monthly expenses, you may not even need a Mexican bank account. There are several US banks that do not charge any fees for using ATM, even in Mexico. In fact, I have an Ally account that reimburses me any fees the ATMs here charge. And I get an excellent exchange rate. To be honest, if it wasn't for the fact that we plan to do a construction project in the near future, I would not see the need to have a Mexican bank account. I would keep my money in US dollars and use the ATM card here for cash and to pay bills.


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## eastwind (Jun 18, 2016)

Thanks, I am investigating options that would provide fee-free ATM use, and after looking at a couple of web sites I'm less focused on HSBC. How are people who do not have a mexican bank account paying their rent? In cash?

If I did have a checking account, I'm wondering if it would help anyway. The place I am still trying to rent is a condo in a big building. The owner is some rich person far away in Mexico city, and they've hired someone local as apartment manager. The manager has so far asked for cash for the deposit because she didn't want the payments being considered as income to her, but conceded I could wire money to the owners instead. Is it possible or likely she wouldn't want a check made out either to her (because it would look like income) or to the owner (because she'd have to mail it to them?)

How would you experienced expats expect to pay your rent in a situation like this?


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## joaquinx (Jul 3, 2010)

Forget the checks. Not worth the hassle and might not be accepted. Cash or bank transfer. You can withdraw money from your ATM sufficient for the rent and go to the landlords bank and deposit the money into their account. You'll even get a receipt from the bank that you made the deposit. I would not give someone cash and not get a receipt for it. Although I have paid my rents in the last 16 years with cash and without receipt, but that's me and I have lived at my current address for 13 of those years. But my rent is 1,400 pesos a month.


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## RVGRINGO (May 16, 2007)

It is just that easy, and you do get a bank receipt, as joaquinx has explained.	
US folks are often still tied to paper checks, but they are not popular in Mexico. That said; online payment between individuals in Mexico is still not common. So, when the rent is due, you will have your landlord‘s unique bank number and can pay it to that account. When the phone or other utility bills are due, you will have marked that on your calendar too; since the bills often fail to arrive. But, you will have those account numbers or an old bill with a barcode, and can go to a store checkout or a handy CFE or Telmex machine and stick cash in a slot.....Different, but easy. Oh....some things can even be done online, but often require an unfriendly Mexican bank account and Mexican credit card. They are more trouble than they are worth, I think.


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## TundraGreen (Jul 15, 2010)

RVGRINGO said:


> It is just that easy, and you do get a bank receipt, as joaquinx has explained.
> US folks are often still tied to paper checks, but they are not popular in Mexico. That said; online payment between individuals in Mexico is still not common. So, when the rent is due, you will have your landlord‘s unique bank number and can pay it to that account. When the phone or other utility bills are due, you will have marked that on your calendar too; since the bills often fail to arrive. But, you will have those account numbers or an old bill with a barcode, and can go to a store checkout or a handy CFE or Telmex machine and stick cash in a slot.....Different, but easy. Oh....some things can even be done online, but often require an unfriendly Mexican bank account and Mexican credit card. They are more trouble than they are worth, I think.


I agree with a lot of this: forget checks, use cash to pay individuals, bank transfers are common for government agencies (INM, IMSS, etc). 

However, I do pay my electricity and internet cable bills online with a Mexican bank account. I can either do it from my bank web site or from the utility company web site using my Mexican bank debit card number. 

The cable bill is delivered to my door about a week after the deadline for paying it as RV commented. In fact, a copy is emailed to me and it also arrives after the deadline for paying. Mexico, love it or leave it.


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## Isla Verde (Oct 19, 2011)

TundraGreen said:


> However, I do pay my electricity and internet cable bills online with a Mexican bank account. I can either do it from my bank web site or from the utility company web site using my Mexican bank debit card number.


I have arranged with my Mexican bank to have my electricity and internet/phone bills paid through automatic deductions from the account I have with them. It works like a charm, and I am always sent an email to let me know that the "domiciliación"has been done.


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## eastwind (Jun 18, 2016)

Using cash to pay the rent is a little impractical if I get the apartment I'm trying to get, because it's 35k per month rent. I'd have to max the ATM 4 days in a row to amass enough cash. And it sounds like I'd then have to wait in a long bank line to put it in the landlord's account. 

On the other hand, wiring money from the US to the landlord's account might end up costing me $35 to $50 USD per month wire fee. 

Is there really no better alternative than cash for paying rent to an individual landlord?


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## maesonna (Jun 10, 2008)

eastwind said:


> Is there really no better alternative than cash for paying rent to an individual landlord?


If you are able open a Mexican bank account, you can use online banking to transfer the rent money to your landlord’s account. I think that would be more convenient than cash.


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