I just read a report from the Credit Union Central of Canada, which seems to indicate that most Canadian credit unions will be at least partially exempt from FATCA.
Even credit unions over the 175 million asset limit (which are MOST credit unions) appear to be partially exempt. IF less than 2% of their customers are non-resident ‘US persons’ they only have to report those non-residents of Canada under the FATCA IGA presuming I am interpreting this report correctly.
Am I dreaming? I sure hope not, and if not, we should have a HUGE BANK PROTEST DAY by moving all our funds out of the big banks and into a credit union!
Select the article titled: “FATCA IGA & Guidance provide much needed details, Mar 11, 2014” from:
http://www.cucentral.ca/SitePages/Publications/Connections.aspx
@All, Since there seems to be so much uncertainty at this point, I guess WhatAmi has the right idea – open accounts in multiple credit unions. Keep total amount at any one credit union under 50K (other than the those registered accounts that are FATCA exempt – note: NOT ALL REGISTERED ACCOUNTS ARE FATCA EXEMPT). Screw the banks – don’t hold ANY accounts there.
Maybe we need to start a new thread: “How Canadian ‘US persons’ can avoid detection by the IRS”.for those non-compliant US slaves who refuse to be whipped by their US master.
In addition to the prior comment re: accounts at multiple credit unions, we can consider things like:
-get rid of joint accounts with your significant other and put all monies over 50K in his/her name
-use up unused RRSP room (if you don’t want to claim the entire tax deduction in one year you don’t have to)
-top up TFSAs, RESPs
-buy real estate
– buy precious metals and hold them OUTSIDE the banking system
For most of us, like myself, who are not even close to millionaire status, this should not be too difficult – a pain in the ass, brutally unjust, and totally infuriating, yes, but not impossible.
We can ride it out until the Charter Challenge succeeds, even if it takes a several years. We will get justice eventually.
@cborna, Well, that question makes sense, FATCA or no FATCA.
I think people underestimate how important large deposits are to the major banks and how devastating it would be if people started withdrawing even $10K per depositor in a tsunami of withdrawals.
I remember many years ago when we bought our first house. I liquidated the stocks in my portfolio and allowed enough time for the trades to clear. When I went to the bank to take my money out the branch manager said they needed 10 days to get the money together. The amount was only $40K. I said “What? It’s my cash and you have it and I want it because I’m closing on a house.” Apparently when you put money in the bank it doesn’t just sit there waiting for you to take it out when you need it. If you try to withdraw a large amount they have to scramble to give it back to you.
The branch manager still insisted that even though it was my money and I could lose the house I had just bought with it, there was nothing she could do to give me my own money. Apparently I could use the money to buy stocks with it but could not actually take it out for 10 days even though it was showing as sitting in cash in my account.
I figured out who the Regional Vice-President was and left him a detailed message about my predicament and threatened to go to the newspapers if they didn’t give me my money within 24 hours. A few hours later, the branch manager who was so hesitant to allow me access to my own money called me up and said come in we’ll have your money ready for you. When I went in she had the nerve to imply she was doing me a favour by taking the money out of their emergency account so they could give me my own money. That experience made me wonder exactly what it is that banks do with your money which is supposed to be sitting in your account as cash ready for you to withdraw anytime you need it.
@omgheesstillanamerican – terrifying is it not?
Fact is that the Banks gamble that you will not want your money (or much of it) at any time and lend it to people who are buying cars and houses and other stuff on term loans. Government holds a small portion as a prudential reserve usually and some is invested in Government paper and other non liquid stuff.
I think that in many jurisdictions the Banks only need to put up 5% of their assets as equity capital – the rest is all depositors’ money. Of course the Central Bank is considered the Bank of Last Resort. I have little patience with Bankers.
@WhiteKat….It’s the Salmon Arm Credit Union and yes, they have assets greater than $175M. The manager was quite apologetic about being FATCA-compliant and apparently had received quite a few inquiries about it from customers, but said they had no choice but to comply. When I spoke to other staff at the credit union, they had no idea what FATCA was or what I was talking about.
@WhiteKat
Don’t forget Tips from Uncle Carl on how to avoid FATCA in your new thread:
http://blogs.angloinfo.com/us-tax/
@OMG, I guarantee you wouldn’t have had this problem if they were carrying the mortgage on your new property.
This is actually a better link:
http://blogs.angloinfo.com/us-tax/2014/03/17/how-to-avoid-fatca-tips-from-us-senate-subcommittee/
@bubblebustin, yeah my mortgage has always been with London Life, they always give me their lowest rate with no haggling. The branch manager actually asked me about my mortgage business when I went to pick up my cheque. I said there was no way in hell I would ever give them my mortgage business after that experience.
@Molly,
Your info is hugely important, I think.
I checked their website and they restrict accounts to BC residents, and they have no parent company. One would think they qualify as a deemed-compliant non-reporting Canadian FInancial Institution.
We need to know why they feel they must be FATCA compliant.
It could be this manager is making assumptions based on the IGA and not on the draft CRA Guidance that was only recently released to FIs.
One could make the interpretation that _all_ credit unions must be FATCA compliant, but for some, this compliancy means to register and certify with the government that they have policies and procedures in place that restrict accounts of Canadian residents, and thereby get their deem-compliant status. In other words, FATCA-compliant doesn’t necessarily mean that they will be reporting any accounts.
I _really_ want to talk to this manager. Do you have the name, or at least which office you called?
1. The 98% thing is apparently referenced indirectly in the IGA when it refers to a US Treasury category.
2. FATCA compliance is not the same thing as FATCA reporting. Local-client- based institutions are still required to register with IRS, but are not required to report on Canadian residents…at least it seems to read that way.
3. Some credit unions do seem to have to register and report in the same way as banks because of US based business. Desjardins most likely as they own a Florida bank for snowbirds.
4. The draft CRA guidance mentioned in the CUCC bulletin is also available for download on the CUCC site via the search box
5. The CRA draft guidance still doesn’t clarify the so-called reasonable explanationfor not having a CLN
Sorry for being redundant. Just noticed WhatAmI’s post.
Don’t forget… its 50K total in all your accounts per bank… So as some suggested… spread it out… Real estate is a good idea… except… when u sell… capital gain/loss.. u can’t rent it out cause that will create another headache. I am looking into trusts but since I really don’t know too much about it… I am reading up on it but its confusing as heck….
“Credit unions which hold less than two per cent of their deposits for non-residents of Canada will qualify for
reduced reporting obligations. They will identify and report only accounts of members who are U.S.
persons and who are not residents of Canada. Unlike internationally active banks, they will not be
required to report accounts of members who reside in Canada.”
FYI Meridian recently merged with Desjardins. I would think that Desjardins now Meridian should be launching an inquiry as to why US forms are not published in French for their French speaking members?
As far as I know Meridian only requires proof of address when you open an account not citizenship. ? This may change who knows??
Meridian merged with the small Ontario Desjardins Credit Union, not the huge Caisses Pupulaires Desjardins of Quebec whch has the US bank.
@Molly,
I went ahead and phoned the Salmon Arm Credit Union. I spoke with a manager.
She said the “executive team” was still working hard at figuring out the FATCA issues and have not made any decisions. She suggested I write to the CEO to ask for more information.
As @J Timorov posted, here is the Draft Guidance!
http://www.cucentral.ca/Documents/CRA%20Draft%20Guidance%20for%20Financial%20Institutions%20March%2006%202014%20%282%29.pdf
The IGA talks about aggregating “linked” accounts. I wondered if this includes a link between one bank and another to facilitate transfers between accounts owned by the same person.
The Draft Guidance answers this question, I think, and the answer is no. Surely banks can’t “see” account balances at the other end just because the owner linked them for electronic funds transfer?
@WhatAML
OK no true blue Canadian is going to read that 144 pages of NAZI propaganda. No patriotic Canadian is going to stay in a job that requires them to sell out their friends and ruin their lives because Adolph Obamination or John McCrap says to.
Besides we have hired a constitutional lawyer and paid him for an opinion which we still don’t have. This is unacceptable. Either he knows the Charter or he doesn’t. Not a peep. Some say he is working behind the scenes, but not a peep? How about going for an injunction to cease harassing our citizens while this is going through the courts?
As far as Credit Union Central is concerned, I’m really tired of watching this discussion here about the difference between Credit Unions which are only allowed to do business in their own Provinces and the transnational banks. Other than a trading account, there is no reason why people should remain in a transnational bank whatsoever. Those who still have such accounts just don’t get it and should stop posting their complaints here as we already know them.
Just on general principles one should use credit unions. Also they must maintain LOCAL legal departments and therefore are easily subject to local and inexpensive (for us) litigation in their local courts. They cannot do business with any kind of businesses that are not in their home provinces and that includes law firms. If the credit unions also become our adversary then I would like to use a favorite banking term ; “KNOW YOUR CUSTOMER” and in this case I say ; KNOW YOUR ENEMY. But I would rather have a local enemy I can sue easily and tie up their resources in a legal quagmire than a huge transnational bankster corporation with big time lawyers on Wall Street, I advocate that everyone here threaten to sue their local credit unions right now, let them know, draw the line…. right now.
Here is how I see this; either the credit union movement in Canada is destroyed because of FATCA or they go national and in that case they are as good as destroyed anyway. But WE must get hold of the various managers and tell them, NOW, that they will be held personally responsible for damages to any of their members and then let them run to credit union central saying that they are being threatened with personal legal action. If we are told we cannot sue then SUE ANYWAY just to drag them into court to make them think about what they are doing and perhaps prompt many local CU officers to quit in disgust and shame.
@ChearsBigEars
You wrote:
As far as Credit Union Central is concerned, I’m really tired of watching this discussion here about the difference between Credit Unions which are only allowed to do business in their own Provinces and the transnational banks.
I don’t understand the significance of provincial credit unions possibly going federal. There was a post recently but I don’t understand if or why this would be a problem.
I posted yesterday that 10 or the 14 FIs in the following link restrict their customers to Canadian residents only:
http://www.highinterestsavings.ca/chart/
They are available to all Canadians, not just in their provinces, but I’m guessing this doesn’t make them “federal”, whatever that means?
I don’t understand how FATCA could destroy provincial credit unions. Doesn’t it have the potential of making them stronger if masses of people decide to leave Big Banks and switch?
@ChearsBigEars
**Besides we have hired a constitutional lawyer and paid him for an opinion which we still don’t have. This is unacceptable. Either he knows the Charter or he doesn’t. Not a peep.**
U are being impatient with this procedure. He has to study the info he has… gather all relevant cites & cases to support his objective. This takes time… then once he is given all the info… then he has to look through it all & form a game plan… this takes time to do… after all the work is done.. he will not show his cards.. u will get a yes or no answer to proceed… if u show the cards… the enemies can then spend the time to formulate a rebuttal… best way to do it is to give them little time to cover their butts. Why would he spend his time on this web site? He is busy… in law.. time is money… to be the best in his field requires him to be arrogant & to hustle to get what he wants… if u expect him to sit there & answer every little q everyone has… he is not doing his job then… u need to sit back & relax… all this takes time… if he makes a mis-step… it will not help the case but it could either hinder it or stop it cold in its track… then what? Demanding anything of a lawyer will not speed up squat… all it does is make your case weaker
@US_Person_Foreigner
Your point is valid, but we are all impatient. Everyone has a role to play here. Sometimes the ones you find the most irritating, have a lot to offer…just my two cents.
I think I made NO typos!
Are lawyers esteemed more than bankers LOL?
Anyway, CUNA has come out firmly against FATCA in case no one noticed rendering the attack on our credit unions moot in my opinion. Our credit union central cannot act on FATCA if the CUNA won’t support it and that is a legal winnable argument if anyone here wants to sue their credit unions for threatening to enforce something that the IRS has no legal right to impose on the world without individual treaties and IGA’s are NOT treaties. IGA means intergovernmental agreements, not ratified treaties.
http://www.cuna.org/WebAssets/Pages/newsnowarticle.aspx?id=69510&blogid=451
CUNA and the World Council of Credit Unions have supported the Posey repeal bill, saying in a joint letter to Posey that the legislation “would be instrumental in eliminating an unnecessary and unduly burdensome rule for credit unions.