I am delighted and, as a roughly-35-years member, proud to report that Alterna Savings and Credit Union. formerly CS Co-op and formerly mainly in Ottawa but now I believe with branches elsewhere in Ontario, IS IN FACT A LOCAL CLIENT BASE FINANCIAL INSTITUTION UNDER FATCA even though it has assets of more than $2 billion.
I received today the following reply to my query (from two days ago) to Alterna, which I quote in full as it is (at my request) classified public information by them in their reply. This is a full copy-paste minus only my personal identifiers.
“Thank you for contacting Alterna.
“In response to your email, Alterna Savings is a full-service, member-focused and community-based financial co-operative with over $2.4 billion in assets and we must comply with all applicable laws and regulations under FATCA since July 2014. In order to minimize the impact to our members, Alterna registered as a Local Client Base Financial Institutions, and we are only required to collect information and report on member accounts held by non-Canadian residents that are considered a U.S. person.”
(BTW I appreciate that a phrase in that last sentence, “non-Canadian residents,” could be interpreted as persons resident in Canada but not Canadian citizens, OR persons not resident in Canada that are considered US persons. The correct interpretation is the latter, according to the CRA website’s FAQ mention of Local Client Base institutions, which is much clearer. CRA says a Local Client Base institution “will not be obliged to apply due diligence or report on accounts held by individuals who are Canadian residents.” I.e., Canadian citizen or not, doesn’t matter, they don’t get reported.)
For whatever reason or oversight, Alterna doesn’t actually mention their Local Client Base status on their FATCA webpage. I’ve written a reply strongly urging them to correct that oversight. Last I checked, their webpage says they must comply with all applicable laws and regs, but they stop short at mentioning the Local Client Base etc after that in the above quote. Ridiculous; with that extra sentence they likely will attract significant business away from local chartered banks, not mention putting at ease the minds of so-called US persons resident in Canada who already have accounts with them. I mentioned these points too.
FYI, I wrote to them “on behalf of several US-origin friends” mentioning in parenthesis that I am a Canadian citizen and NOT a US citizen nor US resident for US tax purposes (I’ve had a CLN since 1976, actually). So I figured there’s absolutely no risk to me of asking the question about Local Client Base status.
Since I know some folks are nervous about even writing queries like this as possibly “outing” themselves, I would urge all readers of this thread who already have a CLN, are thus not even slightly at risk, and who also are members of any credit union, to do as I’ve done and ask your credit union, on behalf of US-origin friends and fellow members, whether they’ve registered as Local Client Base and, if not, exactly why not. And report back on this thread. As a member and voter of the credit union it’s your absolute right to demand to know this, and to demand to know why the hell they haven’t registered as such if they haven’t. It’s your organization, its board owes you a reply.
ASK SPECIFICALLY whether your credit union has registered for Local Client Base status and, if not, why not. If Alterna’s staff were dense enough not to realize the importance of mentioning this on their website, maybe other credit unions don’t get that point (and might even neglect to mention this in an email reply). Don’t just ask if they’re complying with FATCA; even Alterna has said that (see above). Go the extra step and ask specifically about Local Client Base registration. Others haven’t until now, and as a result there has been some mis-information on this and other threads that Alterna might be reporting accounts of Canadian-resident holders. THEY WILL NOT BE DOING THAT.
BTW maybe there are some good reasons why some credit unions can’t register, but I know for a fact that Alterna has for some years now provided US-dollar accounts in our local branches and also their ATM cards link with Cirrus and Interac (as well as The Exchange, Accel, and Coop Network) ATM networks. Cirrus and Interac are definitely world-wide, I’ve used my ATM card from Alterna to get local cash from ATMs in the US, Germany, Greece and Switzerland with no problems. Neither of these services seem to be any impediment to Alterna’s Local Client Base status.
Also BTW, a number of months ago I inquired whether someone not a resident of Canada could open an account with Alterna (claiming I was asking on behalf of a visiting friend from the US) and was politely told that Alterna can’t legally open accounts with anyone who doesn’t reside in Ontario. So I don’t know who they in fact would ever have to report to CRA and IRS, unless maybe Ontario-resident members who later move to the US but keep an account here for visits might be allowed to keep the account open. Or maybe snowbirds who screw up and stay in the US longer than 180 days or whenever it is when suddenly you’re US-resident-pumpkin for tax purposes under IRS regs.
Anyway, great news for anyone living near an Alterna branch in Ontario! And BTW I’ve been a very happy member and client of Alterna since the late 1970s. I can recommend them without qualification, in terms of service and convenience. Maybe not quite in the completeness of their current FATCA webpage, though, but I hope they’ll fix that …
THanks for the info! I’m in Ottawa so this would be very convenient if I need it in a pinch. I think they have a branch on Bank St., South Keys Shopping Center.
Is this the Alterna you’re talking about?
https://www.alterna.ca/ToolsAndCalculators/FindBranchATM/
https://www.alterna.ca/AboutUs/ContactUs/
Thank you for pursuing that information @Joe Smith.
The limit is not 180 days if you go back every year. 180 days is the international standard, but I believe that with the U.S. it is much lower: an average of 120 days over three years?
@Publius
If I recall correctly, the formula is: if all the days in the current year + 1/3 of the days of the previous year + 1/6 of the days of 2 years ago is greater than 183, then one is treated as a US resident for tax purposes.
Good to know! Has ( or could) someone email much the same request to Coast Capital Credit Union and post their response?
And Vancity??
Hieronymus
@ notamused
That’s the formula alright. So if a person spends the same number of days each year in the USA they should not go over 120 days in any year to be safe. Even a 1 minute excursion over the border counts as 1 day. And 1 minute past midnight adds another day to a one day excursion. Travellers beware!
Yes this is accurate. I’m the one who first posted this at Maple Sandbox, and I have the email (with the name of the Alterna official who signed it, which I am not publishing here) to prove it. I’ve circulate copies of that email privately to a few trusted contacts here in Ottawa, so I’m not the only person who’s seen the email. Which, by the way, was sent to me classified as “public” after I said in my initial query that I was going to share their answer to my question with concerned others.
If you want to know whether a specific credit union in your community is a Local Client Base Financial Institution under FATCA or not, here’s a simple suggestion. Just send them an email, as I did, SPECIFICALLY asking “is your credit union registered as a Local Client Base Financial Institution under FATCA and the Canada-US Intergovernmental Agreement? I would appreciate any clarification on your status in this regard.” Don’t ask or say any more. You don’t need to say why you’re asking or anything about your status. Either they’ll reply and say yes, or they won’t. If not, end of story for you. If yes, go from there.
Really, I see no risk to anyone from doing this. Writing such an email does not comprise a US indicia under anything I see in the legislation. Particularly as long as you don’t do something dumb and unnecessary like say “yoohoo I’m a US person” in your email. Even then, what is the credit union going to do? The only reporting required or accepted by CRA and IRA under FATCA is account information. The credit union can’t report account information on you (yet), because you don’t have an account with them (yet). Which you aren’t about to have unless they confirm they have LCB registration. In which case, if you are Canada resident, they aren’t supposed to report your account anyway. So where’s the risk?
Why wait for someone else to do the leg work, assuming you live in the same community with the same credit unions as someone who’s asked and is willing to post the answer?
If you’re hyper-paranoid about even this being a risk, maybe ask a trusted and sympathetic friend or relative who doesn’t share your surname to send the email for you. Then go for a long walk and give your head a shake. I really don’t see any risk with this approach. Whatever your so-called US person status.
I did this on behalf of friends in Ottawa, at absolutely no risk to myself because I have a CLN and have had one for decades, but after reflecting on this today, I see absolutely no reason why one needs a CLN to be safe with asking this question by email. (Maybe in person is a bit riskier, because it’s too easy for the person you’re talking to, to start prying and that might feel awkward even though I still don’t see the risk.)
Just do this for yourself if you’re worried. Why wait for someone else to do it for you? We don’t all live in the same communities, and as I made very clear to a friend over at Sandbox, I don’t have the time or interest frankly in doing this for others, especially now I realize there is no need for that.
Further to my previous post: it’s possible there are small credit unions (who maybe don’t have the money or wits to get a legal opinion on their options, as I suspect Alterna did) who haven’t even heard about LCB status or what it implies both for the institution and for its account holders. Or maybe some of the Contact Us staff or web masters haven’t clued into this and why it’s rather useful information for them to post on their websites. The more people who write asking about this and the more time they have to spend fielding a question that could have been answered by adding a clear sentence to their FATCA webpage if they have one, maybe the better-educated everyone will become. It’s a public service 😉
@Badger Yes you have the correct links.
just sent below off and this is the response as well
Can you tell me is your squamish savings registered as a Local Client Base Financial Institution under FATCA and the Canada-US Intergovernmental Agreement? I would appreciate any clarification on your status in this regard.
Thank you
Hi xxxx,
As a result of the intergovernmental agreement on FATCA, Canadian tax law requires all financial institutions, including Squamish Savings, to collect and report financial information on U.S. persons living in Canada to CRA.
I hope this answers your question.
Kind Regards,
Assistant Branch Manager
Squamish Savings, a division of Vancity
sooooooo what to do next????
anybody up for a flag buring in front of the consulate at high noon?
@mettleman Good Grief. I don’t know what’s more bizarre, that the Assistant Branch Manager doesn’t begin to understand the complexities and variations (like Local Client Base) in the Canadian legislation, or that Squamish Savings is actually a division of Vancity which does seem to understand that point. Left hand and right hand of same body not communicating.
Stupidity and communications silos aren’t unique to public-sector bureaucracies. The private sector can be just as bad, or, in this case, even worse.
All I can suggest is look for a different credit union. Or write Vancity, the Big Boss, and ask what the hell gives here. But that does rather raise your profile …
just sent this off and will post response
Hi
That did not answer the question.
Is Squamish Savings who is a division of Van City savings registered as a Local Client Base Financial Institution?
I know for a fact that Van City is registered as a “Local Client Base Financial Institution” and am wondering if the same holds true for Squamish Savings being as you are a division of Van City.
@mettleman Good move, better than my ideas for now. Alterna also says on their website they’re going to comply with FATCA, they didn’t mention the Local Client Base registration until I pushed it with an email. Maybe the Squamish Savings guy will now dig a little deeper, or call someone at Vancity who know better what’s up, and will get this straightened out. Hope it works that way. Good on you for following through, also great that you’ll post a response.
This just highlights where on other posts (can’t remember now which they’re too damn many of them …) I expressed some concerns about how decentralized this whole FATCA admin stuff is. It boils down to probably thousands, certainly multiple hundreds, of staff in various FIs all over Canada, actually doing the interpretation. I have zero confidence all those people are equally informed, equally motivated to do the right thing by clients, and equally smart or able to interpret what are inevitably complicated and convoluted regs and laws (this is all IRS-inspired, after all, and the phrase “clear and concise IRS instructions” is an oxymoron right up there with “military intelligence” and “friendly fire” from another context). So it may be necessary for some folks in some places to push a bit to get these things clarified.
Also why I’ve always been VERY twitchy about any chance of an FI reporting an account without first verifying with the account holder that whatever indicia they think they have are even accurate.
From an administrative standpoint, also from “due process,” this whole FATCA pile of dung is a dog’s breakfast (or pick your other mixed metaphor). As a former bureaucrat and onetime student of administrative practices and procedures (both good and lousy) this whole thing is like something out of Monty Python under the influence of a multiple-drug-and-booze cocktail.
@meridian Yes Alterna has a branch in South Keys Shopping Centre; I’ve used it, though it’s not the branch I use most often. Small, friendly branch. Their main branch used to be at 400 Albert Street but they moved recently to another building I think on Queen Street, which I haven’t used since they moved.
Anyone here using Coast Capital Savings that might know if they’re also Local Client Base Exempt.
According to their company description:
“CCS has a total of 42 branches that span throughout the Lower Mainland, Fraser Valley and Southern Vancouver Island Regions.”
The problem with them is that they’ve been dead silent on the FATCA issue and haven’t stated whether they were complying with the IRS or not. AND frankly my wife hasn’t given US indicia to open her account – she opened it with her Provincial ID card which doesn’t give “place of birth” and SIN. I’m not opening a “can of worms” with Coast Capital if I don’t have to. But I hate the feeling of helplessness in not knowing which way they’re moving.
How dumb are these credit unions anyway? The non-reporting ones should (at minimum):
*Have an attractive section in their websites regarding their non-reporting status re: FATCA
*Take out full page ads in local newspapers trumpeting their non-reporting status
*Send a snail mail letter to every member (indicia or not) reassuring them that they are not de facto arms of the IRS
*In cases where there are known indicia they could make a personal phone call reassuring their members that their financial information is secure. This is not rocket science! Simple customer service would go a long way. one bifamily…” etc. Its time they they get real and service all their members (some 25 years plus!)
had this comment waiting for me this morning in my in box
Yes, Squamish Savings being a division of Vancity also makes it a Local Client Base Financial Institution.
made my friday a whole bunch brighter 🙂
Personally, I don’t trust FI staff to understand FATCA well enough to simply ask them if they are a “Local Client Base” FI and get the right answer. In my queries, I made it very clear I was asking about their reporting status exemption:
“It appears from your website that your institution has a local client base, and should therefore be eligible for the status of a “non-reporting Canadian Financial Institution that will be treated as a Deemed-Compliant Foreign Financial Institution” under FATCA.
I would like to know if you will be exempt from FATCA reporting based on the above or any other exemption provided for in the Canadian IGA with US FATCA implementation.”
Mettleman got two different answers from the same office, and neither actually says they are exempt from FATCA reporting.
I’ve read someplace on IBS that FIs must report accounts (of suspected “US persons” or people refusing to answer questions about their status) closed after either Jan. 1 or July 1, 2014, so would we really be better off closing a current account in a bank or large credit union to open a new one in a Local Client Base credit union?
Forgot to tick the follow-up box!
@mettleman That’s great news for you and for anyone with accounts in Vancity or an affiliate, or contemplating moving there.
It’s also encouraging to know that once they’re pushed, local managers will contact head office and get this sorted out.
My only remaining concern, don’t know whether anyone can answer this, is — in any multi branch, multi division FI (credit union or even bank for that matter), who actually decides what to report and who sends it to CRA. Is that done at the local branch level or by head office? If the latter, I’d breathe a lot easier than if the former, since as we’ve seen local staff aren’t always up to snuff. Which isn’t really surprising, depending on the size of the local office; for some of these probably even the local branch manager would be acting or expected to act well beyond his or her pay grade and competence in having to interpret and deal with this. Which gets back to comments I’ve made elsewhere and to my MP and the party leaders before Bill C-31, about the importance of some centralized and knowledgeable oversight or control function in Canada to filter out mistakes and to ensure that due process and notification has been followed. Not gonna happen under the Tories’ naively simplistic notion that if you decentralize and deregulate everything, the market will take care of everyone fairly and squarely. Absolute Bullcrap; from my perspective and experience, the human race has never functioned that way and never will. we’re all too human, too likely to make errors, too susceptible in some cases to maliciousness, and too strained in terms of time, energy, education, and attention span to deal knowledgeably and properly with some kinds of complexity on top of our real jobs and lives. None of these local branch managers were hired, or signed on, for all this FATCrap on top of their actual job descriptions. Nor I suspect are they being paid for it. (I think even the US State Department Consular Service is coming to this realization, which is why as we’ve known for three years some US vice consuls have a less-than-positive attitude toward the IRS, viz. the famous reference in the Toronto mass renunciation meeting 3 years ago to the “800 pound gorilla in the room” by the US Vice Consul conducting the meeting. (This was reported on Expatforum months before IBS was founded, Petros, others and I were posting over there still before we were either kicked out or quit in disgust at the censorship they were practicing.)
So we need to be vigilant.
@Schubert,
My guess is it varies with every FI. I asked my financial advisor (RRSPs, RESPs) who is with a large national Canadian firm. He said he is not involved, the head office does it all.
There was an individual post of somebody who took their CLN to the local TD bank branch. The particular staff member shrugged it off and said he/she wasn’t going to enter anything in the file. Now, TD has a dedicated thread here at IBS about being overzealous.
I’m going by the notion that you can’t trust any FI to practice anything near what is laid out in the IGA or CRA Guidance ($50K thresholds, assuming their local client base equates to being non-reporting, etc). Until they tell you specifically, you can’t assume anything. Of course, you won’t always get the correct answer every time you ask.