UPDATE: The original article was mysteriously removed today so the link above no longer works. George, however, located a copy via Google Cache and it is available here for now. A .pdf text version is also available here.
UPDATE #2 – mystery of the disappearance of original article solved — “there was a problem”. Lucky for us — George found a copy via Google Cache (see above):
From: Katherine Burger
Sent: Friday, July 18, 2014 8:36 AM
Subject: RE: Article July 16, 2014
Dear Carol – thank you for the note and feedback. However, the article no longer is available – there was a problem and we had to pull it from the site. However, Fred Cook is one of our regular contributors so hopefully there will be new content from him soon.
Insurance & Technology
Bank Systems & Technology
O: 212-600-3062 I E: firstname.lastname@example.org
Sent: Wednesday, July 16, 2014 6:35 PM
To: Katherine Burger
Subject: Article July 16, 2014
Information Week’s Bank Systems and Technology journal had online briefly this morning a very good, very honest article on the Foreign Bank Account Tax Compliance Act (FATCA) by Fred Cook. The title was:
“Hey, Regulators: How About More Carrot & Less Stick?”
Can I get a copy of that article or can you let me know how I can get in contact with the author, Fred Cook?
Thanks very much for your assistance in obtaining a copy of the above article.
Calgary, AB, Canada
Looks like the financial industry is finally realizing that FATCA is no one night stand but rather a shotgun wedding from hell – and the honeymoon is over.
We hear a lot about how the FATCA compliance industry is gleefully raking-in wheelbarrows full of consulting fees to design and commission new data management systems for banks and other financial institutions, but rarely have we heard from those on the inside who have to manage a growing plethora of complex and costly compliance programs. A scant couple of weeks after FATCA’s inauguration, there are already signs of “FATCA fatigue” setting-in and, perhaps, a belated realization that something is just not ethically or legally right about FATCA.
Here are excerpts from an article by Fred Cook in Information Week’s Bank Systems and Technology journal:
Hey, Regulators: How About More Carrot & Less Stick?
For banks to afford the resources needed to handle today’s regulatory demands, it may be time to discuss changes in compliance enforcement with the regulators.
I do appreciate the need to provide information related to potential criminal activity for the benefit of society at large, but the recent Foreign Account Tax Compliance Act (FATCA) still has me shaking my head. This new regulation requires institutions to report taxable information on US citizens (living in Canada) via the Canadian Revenue Agency (CRA) to the US government. This means that, when we open accounts in Canada, we’re now required to collect customers’ citizenship details. We also have to ascertain the citizenship of all our current clients, even though citizenship is not a requirement for opening or servicing a financial account. We are also required to report, through the CRA, details of any US citizen living in Canada with account balances of more [than] $50,000. Ironically, until now asking for personal information such as citizenship was in direct violation of Canada’s privacy laws.
How is implementing the overhead of FATCA regulations a benefit to the institution’s business? Is it not just doing the US Internal Revenue Service’s work for it? I would make the same case for tracking deposits larger than $10,000, reporting suspicious transactions, or determining politically exposed people and providing details about them to government and police agencies — for free. Though managing these “offloading” regulatory requirements doesn’t have any direct benefit to managing the bank’s core business, they must be followed to stay in business under threat of substantial fines and criminal charges.
These government and policing agencies have zeroed in on the fact that banking is a necessity, and that the institutions providing these banking services have access to very personal information otherwise not readily available on consumers and their monetary habits. Therefore, my expectation is that our regulations will continue to expand while new ones are added.