To help you judge if,
your experience with your local bank, credit union or insurance company (or as the US defines them: “foreign financial institutions”) will be a comfortable one, as some advertise,
shared here are excerpts of notes from a meeting set up with a “US Person” and Canadian husband by a Vice-President of the wealth management branch of one of the Big Five Canadian banks:
1. ..all previous recommendations for changing investments have been done by telephone… In all the years as clients, they never requested a meeting with us.
2. re green card assumption and location of the company worked for (this question is one way to find out if a person has worked in the USA). *(see below)
3. Bank representative met with each of US Person and Canadian husband alone as they do not have joint accounts.
…wanted to sell US Person’s non-registered mutual funds and give the cash back to local branch of the bank (it is not worth their while “all the paperwork” to accept clients with less than $500K!!!!) US Person refused….had asked on numerous occasions for the names of PFIC compliant funds. At the end of the meeting he agreed to come up with a list of PFIC compliant funds. Until 10 days ago he did not know the meaning of PFIC. Asked why he would sell me mutual funds if other investment companies have known about the IRS rules since 2010. His answer: “we’re not expected to know – we ask people to check with their tax accountant” Then he asked ME if it is OK to have mutual funds in an RRSP.
4. … asked to do a review of our net worth. When I told him that for the past five years my annual gross income is about $23,000, he looked horrified. US Person says “I don’t think I fit the “wealth management” profile, even if I were not a US person.” He kept asking about credit lines – three times and looking at me each time. Non-US husband uses credit line. It is important the other US persons know that credit lines will count in their highest and year end balances for FBARs and FATCA tax forms 8938, and of course in the aggregate $50K US that the banks will report to CRA.
5. US Person asked him how many accounts the “wealth management” part of this bank has with Canadians with US connections. He replied “not as many as you think”. US Person said that she should have replied “by the time you get through with turning over all the names of people with US indicia, you could be looking at 200,000 or more (dividing the one million US persons among the big five) Canadian clients that you will lose!”
6. Same story about registered accounts being exempt – this V.P. could not grasp the concept of US persons being thrown under the bus (did not bother to try to explain – and his office spent hours writing letters etc. when my very savvy (sarcasm) IRS agent could not understand that the separate tax slips for each mutual fund were declared on both my Canadian and US returns. “This V.P. knew about the monstrous fine, but I am sure he must think that I am one of those tax cheats you read about in the newspapers.” AND, the head office used to issue 1099 forms, but this stopped in 2011.
Comment by US Person after this experience: Wealth management V.P. said that the reason for all the paperwork was because of 9/11 – does he think we are as ignorant as he is?!
Definitely an uncomfortable experience.
*US Person said from separate meetings V.P. assumed that Canadian husband had a green card and that he had lived and worked in the USA. Canadian husband wrote letter saying that he worked for an international company for almost 40 years in three different countries but NEVER worked or lived in the USA. He has only one citizenship, Canadian. Canadian husband told the V.P. that he did not have permission to send his Canadian citizen private financial information to CRA for onward forwarding to the IRS.
Canadian husband also asks for copies of all documents signed the day before (should they have been changed after the fact). …and finds it rather odd to have to give the name and location of the company he retired from 13 years ago (before 9/11), as a source of investments.
@MonaLisa and @Crystal. If you have an account at a Building Society, do you really want to stir things up? They are under the Local Client Base exemption and will not report you unless you…….unless you……….move back to the homeland……….. ROTFLMAO
If you read the account fine print, if you pay £10 you can request a copy of all the personal information they have on you. That would tell you if they have indica on you. The Building Society that Mona Lisa uses (from another thread) has two nationality codes on their system, British and Other. If you are listed as other, if anything you may want to just correct that as British.
High Street Banks on the otherhand, some of them are now asking everything up to and including your shoe size and kindergarten teacher name. They will rat you at. For them, I would be disposed to close the account and open a new one because I would be terrified of database problem because this is going to be a C______ F______ . Start fresh with another bank in a clean database, avoid the places that ask for place of birth because I believe they will still rat you out in the end. In fact that was the answer I got when I called a phone center about opening an account and ask if having a CLN would over ride a US Place of Birth. So for this one large banking group, having a CLN will be of no use as they will still report because thats what the IGA provides.
Meridian CU now has info about FATCA on their web page. have a look http://www.meridiancu.ca/meridian/legal/FATCA/FAQ/Pages/default.aspx
see what they indicate about joint accounts:
15. How are joint accounts handled under FATCA?
If at least one of the joint owners qualifies as a U.S. person, any required reporting would treat the U.S. person as the owner of the entire account. If more than one of the joint owners are U.S. persons, any required reporting would treat each U.S. person as the owner of the entire account.
person “e account as being owned by the US
@downtherabbithole, At first glance, I would have thought that Meridian CU while not a small credit union, should qualify under the Local Client Base Exception.
From their web page, it looks like they hired a hyper compliance firm to assist them.
Anyone have any idea why they would be throwing everyone under the bus?
If I was a Canadian Brocker, regardless of CLN or not, that is a place where i would not want to be a member.
continued. Maybe a Canadian Brocker with a CLN who does not do any business with Meridian, could write them and ask what is their status and why not a Local Client Base.
@monalisa, crystal London
What George said.
Why cry stinking fish if they don’t have a Scooby?
@downtherabbithole, and George, thanks for updating us on Meridian. Makes me sick to see it. I am no longer a USP, but I don’t think I should have to prove I am not for the rest of my life in Canada – as a Canadian citizen only. I am worried for all those out there who will find out about this only when confronted by their local credit union or bank. They will not know enough not to use their passport or birth certificate to open an account if it shows a US birthplace.
Meridian page says:”Experience the benefits of Neighborhood banking”. Yes, now, in your local Meridian branch, your friendly neighbourhood teller can turn you in to the IRS after finding out through chatting that you’re a USP.
Maybe IBS needs a page that links to all the Financial institutions and their FATCA-collaborator status webpages as we discover them?
Hi Badger you are right we need a page with links to those institutions that are posting info about FATCA on their web pages. It is shocking to think people may find out on July 1st that all of the credit unions may be like Meridian who knows? It is my understanding that Meridian started in Fort Erie and has many members who may have US connections. They have an AGM coming up soon I wonder what their members will have to say about this FATCA info or if the Board of Directors will even mention it.
I just sent the following to my investment house; I will send this to my banks as well. Maybe if we deluge these businesses with inquiries they will have to take some action to at least increase the transparency of this process….. This also was sent to info@privcom.gc.ca (the Cdn govt privacy commissioner)
Xxxxx: As my financial advisor, I need you to clarify the following:
Below is the write-up in the most recent RBC document outlining the 2014 Federal Budget details:
OTHER CHANGES
FATCA – UPDATE ON AUTOMATIC EXCHANGE OF INFORMATION FOR TAX PURPOSES
The U.S. Foreign Account Tax Compliance Act (FATCA) is legislation that seeks to identify U.S. persons who evade U.S. taxes by placing assets in foreign (non-U.S.) accounts – either directly or indirectly through foreign entities such as corporations and trusts. The legislation would require foreign (non-U.S) financial institutions to report directly to the U.S. Internal Revenue Service (IRS) information about financial accounts held by U.S. persons, which includes U.S. citizens living abroad.
Canada and the U.S. signed an Inter-Governmental Agreement (IGA) on February 5, 2014 to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA). Under the IGA, Canadian financial institutions will report to the CRA information in respect of U.S. persons. The CRA will report information to the IRS under the Canada-U.S. tax treaty and will be subject to its confidentiality safeguards.
A variety of registered accounts (RRSP, RRIF, RESP, RDSP, TFSA) will be exempt from reporting by financial institutions. While certain accounts are exempt from reporting under this agreement,
the agreement will not affect the personal tax reporting obligations of U.S. persons. It is important that U.S. persons consult with a qualified cross-border tax professional to understand their U.S. reporting obligations
This brief description provides no indication of the definition of “US Persons” for individuals to consider their risk of being so identified.
Nor does it indicate who/what office in RBC will be doing the evaluation as to which account-holders are/are not “US persons”.
Nor does it indicate how an account holder can determine whether or not their account is being / has been identified as having “US indication” (and, consequently, is being sent on to the CRA and then on to the IRS and FBI and NSA, etc).
Nor does it indicate how an account holder (even if they somehow are able to determine that their accounts have been so identified) can go about challenging any such designation (either due to mistake or change in personal status, e.g. with evidence indicating the loss of US nationality); exactly to whom and what office should such information be sent and will the account holder be provided with immediate and/or very timely written proof/confirmation that RBC acknowledges that they (the account holder) are not now, nor will they ever in the future, be identified as a “US person” by RBC-Dominion.
Exactly what action is RBC-Dominion taking to carefully protect the privacy rights of it’s account-holders in this situation?
All account holders need to know this information PRIOR to July 1, 2014.
LM
Excellent pro-action, LM.
@All and @LM
In these types of correspondence I think everyone needs to use language like;
“Canadian Citizens classified as US Persons by the US Government.”
Never ever let anyone call you a “US Person” if you are a Canadian in Canada!!
It is equally racist to call someone Jamacian Canadian or Asian Canadian!!!
@All Brockers, whats the scoop on Meridian CU so its not a local client base?
Also my heart goes out to the many millions who really do not consider themselves American who will accidentally get ensnared when they open a financial account and present something with US indica.
An innocent action will be life changing.
This is the RBC NEWSPEAK in the latest ‘Updates to Investment Management Account Agreement from RBC Global Asset Management.
Under PROTECTING YOUR PRIVACY.
In order for us to ….operate your account, you are required to agree to …the use of your information in the manner described….
In other words. “we are covering our ass- if you don’t like it you can close your account”
Hubby (a renunciate with CLN) and I (a renunciate awaiting CLN) went to our local TD-CT to discuss FATCA, the TD process of identification, whether clients will be told/allowed to correct the records. The folks at the local branch KNOW NOTHING AT ALL ABOUT FATCA and we gave them a few OMG moments. The investment-advisor guy there said that FATCA has been mentioned to him but the regular banking people had received no information from higher-up. With less than 8 weeks to go to Canada (being eaten by the IRS) Day, we all should be raising loud questions at all our FFIs, demanding answers.
@KalC – Thanks for the info on RBC – – I have sent this to my long-standing advisor who recently moved over to RBC and has assured me that he sent my questions (from a week ago) up the chain for answers (none received yet).
1984 has arrived and we should all be afraid.
What are they waiting for at the bank? Maybe they can’t get their minds around having to tell their front line staff to be on the look out for Americans?
In the words of Terry Campbell, President of the Canadian Bankers Association,
“A FATCA is the poster child for the problem of extra-territoriality. One can understand the rationale. They want to cut down on tax evasion. Fine. We understand that and are sympathetic to that. It’s the way they have chosen to go about doing it which is a real problem. It’s hugely unworkable. It extends U.S. territoriality into Canada. It threatens to erode Canadian sovereignty. Ultimately … FATCA would have turned individual banks, individual financial institutions, into arms of the IRS [Internal Revenue Service] in the United States. If FATCA came through in its current form, before a Canadian citizen could open up a bank account at a Canadian bank, you would have to prove you were not an American citizen.”
Why wouldn’t they give their front-line staff a basic understanding of and how to answer questions regarding FATCA. Seem not a good banking business technique to have your front-line staff look like uninformed fools.
@Calgary411,
Perhaps, they are putting off as long as possible, having to explain and legitimize a ‘witch hunt’ to their front line employees.
These people are the interface between the bank (and it’s policies) and the public. They should be getting ongoing trauma training (for themselves and others). If I felt I was being left in the dark like this, I’d be really angry – especially if I felt that the role I would be expected to take puts me in conflict, or worse, danger with my customer.
I think it’s a combination of not wanting to raise the alarm which would alert people so that they are angry and pull their accounts, and they seem to favour the stealth approach – where accountholders, taxpayers and voters don’t get notice and so have no time to react and mount resistance or plan before it is fait accompli. We don’t even know if they’ve told shareholders either. And probably there is also some confusion and disconnect as to how to have lots of hapless local tellers and frontline staff confronted with enraged clients – having to apply whatever the top level Banksters have decided on in order to move forward on FATCA.
Still looks particularly bad too to have to note to your fellow Canadians who ask when the changes are in force, that it is official as of CANADA DAY.
Yes, the banks don’t want to lose a dime more than they need to by front line people tipping their customers off before the final “gotcha” moment.
There is no way the banks can put a good spin on this to their employees. Is it for the greater good of anything other than the banks that loyal bank customers should be turned over to the IRS, unless we are to be vilified as ‘tax evaders’ and a threat to Canada’s financial stability? That’s my biggest concern here – which way will public opinion break, for if it breaks in favour of protecting all Canadians, our job will be easy. If public opinion follows the Harper government’s lead, he’ve got a huge, extremely painful battle ahead of us.
Time will tell how much bank employees love their jobs.
Actually, the policy of all the Canadian banks, with the full encouragement of the Can. gummint, is going to be ‘Don’t ask, Don’t tell.’ If you have nothing on file and your non registered accounts are <1 million US $ you have little to be concerned about.
DukeOfDevon,
Perhaps, and yes, I agree it will be much easier for Canadians than for citizens of other countries to hide from FATCA, but FATCA still needs to be stopped – first in Canada, then everywhere else.
@DoD
Will the “don’t ask don’t tell” policy with the banks be official or unofficial?
If it’s official, expect problems from our dear friends to the south, unless of course they too are willing to turn a blind eye. If it’s unofficial, expect inconsistencies in application, in other words, chaos.
@Bubblebustin, For those that are more well informed it will be easier to skirt around FATCA than it will be for the unaware. Unfortunately, I expect that a lot of people will fit into the unaware category, and inadvertently ‘out’ themselves without batting an eyelash, particularly during new account openings.
@Bubblebustin, Also, we cannot ALL escape FATCA. USA is expecting a lot of data, so many will need to be sacrificed to appease the beast. As usual, it will be the easy targets – the ones not in the know.
I have mentioned this no-time-to-react injustice in all of my submissions — Fin. Can., Senate and FINA. The FATCA hammer is going to strike hard and without warning after Canada Day. I truly think the closed-door, drawn-out IGA negotiations; the IGA announcement buried in the Olympic news; the stealth placement of the implementation legislation in an omnibus bill; the limiting of debate; and now the reluctance of banking management to inform its front line workers about FATCA is ALL designed to protect the banking industry from its soon to be very panicky and angry customers. Well all this might have delayed things to the fait accompli stage but it is not going save the banks from the consequences of the panic and anger to come. I, for one, will be part of any stampede to exit the banking system. I know that deposits aren’t as valuable to the banks as loans are but every deposited dollar that I remove equals at least 10 dollars in lost loans and losing loans means losing profits. If I had a loan, which I don’t, I would be paying it off as early as possible.
Of course, many people will be trapped in the system and will have no recourse except to let their banks (most likely their front-line workers) know that they are most unhappy customers and that they place a great deal of blame on this industry which looked out only for itself and lobbied only on its own behalf, not its clients. If I were a bank employee, which I am not, and if I were near enough to retirement or willing and able to look for alternative employment I would do a short-notice resignation and not show any enthusiasm for training someone for my soon to be vacant position. I would not want to look at US tainted customers across the counter and tell them that all their bank account details will soon be electronically winging their way to the USA because thanks to FATCA, only non-US tainted customers remain protected by bank confidentiality and Canada’s privacy laws.
END OF RANT