# Expats Left Frustrated as Banks Cut Services Abroad



## cvgtpc1 (Jul 28, 2012)

Expats Left Frustrated as Banks Cut Services Abroad - WSJ


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## 197649 (Jan 1, 2013)

Unfortunately all I got was the title as it requires you to subscribe


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## Gumby (Jan 16, 2014)

This story has been reported in the NYT, WSJ, and Yahoo Finance for over a year and it always makes me laugh.

The main problem is that if you have many millions of dollars in complicated tax shelters abroad the new FATCA rules make your life rough. Countries such as Singapore will no longer allow Americans to open these types of accounts. If all you need is a checking account to pay your monthly expenses everything is still fine even in Singapore.

If you are keeping your foreign bank balances under $10,000 so you don't have to do FBAR Reporting you're automatically protected against FATCA reporting because the minimum reporting balance for FATCA is $50,000 or higher in some cases. According to the IRS web site real estate holdings do not have to be reported.

If you have a business here however, the rules are different and you should do some research into FATCA.

Yahoo Finance had another shocking exposé yesterday that really cracked me up. It turns out that FATCA is so onerous and confusing that American expats are now giving up their US citizenship in record numbers omg !! It turns out that if you use the numbers in the article the actual percentage of expats who do this is up to a whopping 0.004 percent a year. That's probably equal to the percentage of expats who need their tax shelters because they're billionaires. 

The above only applies to US citizens or Filipinos with dual citizenship. 

Also sorry about the acronyms without explanation but the subject has been discussed in other threads.


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## cvgtpc1 (Jul 28, 2012)

Sorry about that. I got the same thing but somehow got it to come up after clicking around. I copied and pasted that link hoping it would still work.

Gumby,
But should you not let your US institution know you live outside the US?


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## Gumby (Jan 16, 2014)

I think these rules apply to foreign bank accounts and foreign assets no matter where you live.


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## cvgtpc1 (Jul 28, 2012)

This WSJ article appeared to refer to US citizens who's US bank knows you live outside the US. They didn't want to deal with FATCA. Wasn't across the board but some were major institutions.


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## Gumby (Jan 16, 2014)

Thanks. I'll try to read the whole article later when I go to the library.


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## 197649 (Jan 1, 2013)

I got screwed either way I have my disability deposited in China Bank. After a reevaluation I got a surprising large windfall. Now I have no choice but to report this year. But disability is non taxable so not sure how this will fall out


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## vferauge (Sep 13, 2014)

I wish what you said was true, Gumby. Alas, the article is all too accurate. In yoru country you may not feel the impact yet. Your misconception is a very common one - I'm not rich and so this doesn't have anything to do with me. Americans all over the world are getting their accounts closed or are having them restricted in some way just because they are US citizens. I work with different Americans abroad organization and was responsible for putting together people's stories to present to lawmakers in D.C. earlier this year. It's not about income at all - the impact of FATCA depends on the country, whether or not there is an IGA, and how the local banks evaluate the risk. In my country two banks in France threw out every single American citizen including dual US/French citizens living in the US untill it was stopped by a French senator. I hear it's worse in Germany. Recently, I'm seeing Americans in Mexico getting it - between Mexican banks that won't even allow them to cash a check to retirees getting their investment accounts in the US closed by US banks. I have some of these letters from the banks (foreign and in the US) and they are 100% clear about why these people can't bank with them anymore - you are a US citizen and we are very sorry about this but because of FATCA we have reluctantly decided to no longer serve "US Persons". And this is irrespective of the account balances - they could have 500 USD or 50,000 and be 100% US tax complaint and it makes not a bit of difference. I am very glad that you are not experiencing this but elsewhere the phenomenon is all too real. Lawmakers in the US are aware of it - when we talked with them they had received letters from their constituents abroad. However, while they are generally sympathetic, they are hoping it will simply go away...


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## lefties43332 (Oct 21, 2012)

vferauge said:


> I wish what you said was true, Gumby. Alas, the article is all too accurate. In yoru country you may not feel the impact yet. Your misconception is a very common one - I'm not rich and so this doesn't have anything to do with me. Americans all over the world are getting their accounts closed or are having them restricted in some way just because they are US citizens. I work with different Americans abroad organization and was responsible for putting together people's stories to present to lawmakers in D.C. earlier this year. It's not about income at all - the impact of FATCA depends on the country, whether or not there is an IGA, and how the local banks evaluate the risk. In my country two banks in France threw out every single American citizen including dual US/French citizens living in the US untill it was stopped by a French senator. I hear it's worse in Germany. Recently, I'm seeing Americans in Mexico getting it - between Mexican banks that won't even allow them to cash a check to retirees getting their investment accounts in the US closed by US banks. I have some of these letters from the banks (foreign and in the US) and they are 100% clear about why these people can't bank with them anymore - you are a US citizen and we are very sorry about this but because of FATCA we have reluctantly decided to no longer serve "US Persons". And this is irrespective of the account balances - they could have 500 USD or 50,000 and be 100% US tax complaint and it makes not a bit of difference. I am very glad that you are not experiencing this but elsewhere the phenomenon is all too real. Lawmakers in the US are aware of it - when we talked with them they had received letters from their constituents abroad. However, while they are generally sympathetic, they are hoping it will simply go away...


Is this going to affect us living in philippines and transferring funds from usa? Or only the rich? Im in process if selling usa property,maybe i shoukdnt?


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## 197649 (Jan 1, 2013)

The question that should be asked is to the bank at which you bank. I have talked to PS Bank and China Bank both could not answer. Of course I did not figure the local bank could answer the question. But they are asking


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## vferauge (Sep 13, 2014)

That's a good question, Lefties and since I hadn't heard anything from the Phillipines prior to this discussion, I didn't have an answer so I went looking. I found several articles and the information in them is consistent with what I've seen in other places. So, yes, the banks in the Phillipines are signing up and it looks like they will be sending out notes to their US Person customers informing them that their info will be transmitted to the US IRS and asking them to sign waivers so the banks can do that. Refusal to sign the waiver means the account can be reported as "recalcitrant" which will most assuredly draw the attention of the IRS in the States. 

I really doubt that only the "rich" (and let's face it, that term is relative) are going to be signing these waivers. These waivers (which I see would be required under the law there) should be on file for every US person so if an account goes from low-value to high-value (like if you transfer money from the US after the sale of a house) then they have what they need in hand to report that to the US. 

If you're interested, I wrote a post about this called Four Ways to Get FATCAed (up on the Franco-American Flophouse) which describes what can happen as the banks ramp up to be compliant. I'm seeing some pretty interesting attempts by banks to ferret out those risky US Persons.


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## 197649 (Jan 1, 2013)

READ THIS
The countdown begins for FATCA… - PwC Think Tank


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## lefties43332 (Oct 21, 2012)

c_acton98 said:


> READ THIS
> The countdown begins for FATCAâ¦ - PwC Think Tank


The reason i ask is bcoz last yr my usa bank would NOT WIRE TRANSFER me funds,my atm card had expired and they wouldnt do it even with threat of me closing acct. Had to do cash advances all yr at about 1000 cash advance fee on cc


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## lefties43332 (Oct 21, 2012)

lefties43332 said:


> The reason i ask is bcoz last yr my usa bank would NOT WIRE TRANSFER me funds,my atm card had expired and they wouldnt do it even with threat of me closing acct. Had to do cash advances all yr at about 1000 cash advance fee on cc


So im thinking if switching banks


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## 197649 (Jan 1, 2013)

lefties43332 said:


> The reason i ask is bcoz last yr my usa bank would NOT WIRE TRANSFER me funds,my atm card had expired and they wouldnt do it even with threat of me closing acct. Had to do cash advances all yr at about 1000 cash advance fee on cc


Really my bank has never rejected a transfer only thing they say is 10k or more reported to IRS


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## lefties43332 (Oct 21, 2012)

c_acton98 said:


> Really my bank has never rejected a transfer only thing they say is 10k or more reported to IRS


Yes,,my bank was one of the few,,even my atty went personally and spoke with them


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## DonAndAbby (Jan 7, 2013)

vferauge said:


> That's a good question, Lefties and since I hadn't heard anything from the Phillipines prior to this discussion, I didn't have an answer so I went looking. I found several articles and the information in them is consistent with what I've seen in other places. So, yes, the banks in the Phillipines are signing up and it looks like they will be sending out notes to their US Person customers informing them that their info will be transmitted to the US IRS and asking them to sign waivers so the banks can do that. Refusal to sign the waiver means the account can be reported as "recalcitrant" which will most assuredly draw the attention of the IRS in the States.
> 
> I really doubt that only the "rich" (and let's face it, that term is relative) are going to be signing these waivers. These waivers (which I see would be required under the law there) should be on file for every US person so if an account goes from low-value to high-value (like if you transfer money from the US after the sale of a house) then they have what they need in hand to report that to the US.
> 
> If you're interested, I wrote a post about this called Four Ways to Get FATCAed (up on the Franco-American Flophouse) which describes what can happen as the banks ramp up to be compliant. I'm seeing some pretty interesting attempts by banks to ferret out those risky US Persons.


You can go to the FATCA website and see which banks have signed up. The PH banks are a bit slow with informing the US customers about the required waiver, but it will get done.

The Philippines is one country that will have to comply. They rely heavily on the flow of dollars into the PH banks from OFWs, Philams and expats. Countries like Germany, France, not an issue for them. I checked the list a few months ago and my bank, BPI, is signed up.

The FATCA reporting that we expats must do is not really the big issue. Banks and brokerages closing our accounts because we live overseas is the huge issue (nice summary in your previous post!)

Last year I got letter from Fidelity that they were going to freeze my account because I had my address as the Philippines. I changed the address and they let me go, but it is getting scary.


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## lefties43332 (Oct 21, 2012)

DonAndAbby said:


> You can go to the FATCA website and see which banks have signed up. The PH banks are a bit slow with informing the US customers about the required waiver, but it will get done.
> 
> The Philippines is one country that will have to comply. They rely heavily on the flow of dollars into the PH banks from OFWs, Philams and expats. Countries like Germany, France, not an issue for them. I checked the list a few months ago and my bank, BPI, is signed up.
> 
> ...


Its about control


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## 197649 (Jan 1, 2013)

I got this from my US Bank
I am unaware of any changes in our Wire Transfer policies. We are a Military Banking Group, and we understand that our customer's may have to be overseas. If anything changes with our Wire Transfer policies that would interfere with your ability to transfer funds to your Philippine Savings Bank account, I will most certainly notify you. However, we do still process International Wire Transfers.


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## Nickleback99 (Aug 6, 2011)

Spot on Lefties! Control by an over reaching government


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## redroom5 (Feb 16, 2014)

As the financial situation worsens here in the USA these controls will only get worse. Desperate governments resort to desperate measures to keep their "cash cows" under control. 

This will drive more expats to renounce their citizenship but if that number becomes a problem for the government they will put in place some capital control to remove that as an option. There is already an exit tax in place if you are wealthy. They may feel obliged to extend that to everyone making it financially impossible to do it. 

When/if things go really bad it may be too late to do much about it.


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## DonAndAbby (Jan 7, 2013)

c_acton98 said:


> I got this from my US Bank
> I am unaware of any changes in our Wire Transfer policies. We are a Military Banking Group, and we understand that our customer's may have to be overseas. If anything changes with our Wire Transfer policies that would interfere with your ability to transfer funds to your Philippine Savings Bank account, I will most certainly notify you. However, we do still process International Wire Transfers.


I think you must be talking about USAA and they have been an excellent bank for vets and expats in the past, but they are also changing due to the government regs.

Before I moved to Philippines a few years ago I tried to open an account with them, and told them I would be living in the Philippines. They told me thanks but no thanks. No new accounts for people living in the Philippines (they did not specifically say Philippines but I am not sure if they meant anyone living overseas).


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## 197649 (Jan 1, 2013)

Part of the problem is also that the U.S. government also has employes and contractors all over the world. Embassy employes who are not foreigners. The bottom line is the government can't keep raising taxes so they must have other options to keep their cash flowing into their pockets. I am going to say this and it may cost me but so be it. The U.S. government is just as corrupt as any other so called 3rd world nation.


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## 197649 (Jan 1, 2013)

And here is the bottom line
$2.66T: Tax Revenues for FY14 Hit Record Through August; Gov’t Still Runs $589B Deficit | CNS News


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## 197649 (Jan 1, 2013)

http://rt.com/usa/190456-foreign-banks-taxes-americans/


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## kenslvr (Aug 21, 2013)

Greetings all, here is a cut and paste link to a Guardian article that might make sense of it all. 'I was terrified we'd lose all our money': banks tell US customers they won't work with Americans | Money | theguardian.com


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## Manitoba (Jun 25, 2014)

To renounce US citizenship you need another citizenship to fall back on.

I do know several US citizens that have thought about renouncing but have not done so because they do not have dual citizenship.

I also know several US citizens with dual citizenship that simply only use their non US passport to open bank accounts and thus avoid FATCA hassles.

So if you can renounce citizenship, you have an easy way around the need to renounce.

While the aims and objectives of FATCA are commendable, it is another case of swatting flies with sledgehammers.


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## 197649 (Jan 1, 2013)

Manitoba said:


> To renounce US citizenship you need another citizenship to fall back on.
> 
> I do know several US citizens that have thought about renouncing but have not done so because they do not have dual citizenship.
> 
> ...


Thats interesting but if they are collecting retired pay, disability or SSI/|SSDI or even work overseas how do they get the money (dollars) into the foreign account unless they work for a foreign company getting paid directly?
From what I understand is the FATCA is really designed for those who have balances of 50K or more. The FBAR is for those with 10k or more which is self reporting for the tax payer AM I WRONG?


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## Manitoba (Jun 25, 2014)

I doubt if renouncing citizanship would have any net benifit for people getting income either pension or social services from a US source. Renounce and you just might lose the benifit 100%.

The Americans I know are all contract workers never long enough with any company to vest their pension but well paid enough to want to do something to avoid US taxes.


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