Getting over my initial trepidation of making my first post here I want to bring up the subject of the Access to Basic Banking Services regulations and what specifically are Canadians rights in this regard. First the rules are implemented by the Financial Consumer Agency of Canada which is part of the Department of Finance but has its own independent commissioner a woman named Ursula Menke. The Financial Consumer Agency was created in back in 2001 and mainly handles consumer protection issues related to the federally Chartered Banks and to a limited degree those of federally incorporated insurance companies and federally incorporate trust companies (Note in the US Obama’s Consumer Financial Protection Bureau is effictively based on the FCA as on its models). Its jurisdiction DOES NOT apply to the provincially regulated stock brokerages owned by the all major chartered banks(Canada unlike every other country in the world does not have federal securiites regulator like the US SEC, UK FSA, Australia ASIC etc.)
Back to the subject of Basic Banking regulations here in my mind are some important quotes from the FCA website:
Under Canadian law, you have the right to open a personal bank account. You can open an account even if:
you don’t have a job
you don’t have money to put in the account right away
you have been bankrupt.
The bank can refuse to open an account for you if they suspect you have committed a crime related to any bank, if you harass or threaten a bank employee, or if you show false identification.
And these are the type of indentification required.
– Show two pieces of ID from List A:
Canadian driver’s license
current Canadian passport
Canadian birth certificate
Social Insurance Number (SIN) card
Old Age Security card with your Social Insurance Number (SIN) on it
Certificate of Indian Status
provincial or territorial health insurance card (this cannot be used in Ontario, Prince Edward Island or Manitoba)
Certificate of Canadian Citizenship or Certification of Naturalization
Permanent Resident card or a Citizenship and Immigration Canada form IMM 1000, IMM 1442, or IMM 5292
If you don’t have two pieces of ID from List A above, you can:
– Show one piece of ID from List A and one piece of ID from List B, below:
employee ID card with your picture on it
debit card or bank card with your name and signature on it
Canadian credit card with your name and signature on it
client card from the Canadian National Institute for the Blind with your picture and signature on it
current foreign passport
– Show one piece of ID from List A and have someone the bank knows confirm that you are who you say you are.
Note: at no point are you even supposed to be asked for a Canadian SIN if the account is non interest bearing(i.e. Basic Checking). Additionally the forms of ID required are not indications of citizenship or nationality one way of the other. I also have to say these rules could conceivable be changed but public notification and public comment is required under the Bank Act. I’ll also note the whole Access to Basic Banking regime is setup primarily to help those with low incomes, the elderly, and the young who in the past might have been dependent of check cashiers and other types of non bank storefront type financial institutions(I can’t see the NDP for example would at all be happy with any changes to these rules no matter how much the Democrats in the US Congress might not like them). There is also another part of these rules that requires federally chartered banks to cash Government of Canada checks such as OAS/GIS/CPP(for those non Canadians the Canadian equivilent of US Social Security) for non accountholders that I can talk about too if anyone wants.
Here is a link below to FCA’s website section on Access to Basic Banking
I am sure there will be a lot of comments so have at it
Also there’s the human rights issue. Imagine a Canadian citizen who has a long standing banking account for 30 years… then their bank tries to close it or withhold payments because of where the account holder was born! How fast will they howl “discrimination”, then lawyer up and file Human Rights complaints and Charter challenges
So, I wonder what’s been happening with US expats who’ve already had their accounts closed down in Europe. If they are dual citizens, have any of them challenged these closures or loss of banking access under similar laws in their adopted countries?
Is this only for residents of Canada, or does this apply to non-residents as well?
In the TAD report, she said that this is affecting people who put money in foreign accounts to serve as “FLEE” money to escape repressive regimes. I totally agree, and I think this should be the right of anyone to do have.
Maybe Canada is a better place for parking money?
Well, I think the banks in Canada have a problem if they want to comply with FATCA. Will Canadians comply with proof of non-US citizenship? It is a lot easier to prove that someone is something than that someone is not something, as we are learning.
The end result will be to remove all investment from the United States. Last one out of US investments is a rotten egg.
In the Soviet Union they had a popular joke about this exact point: “prove that you are not a camel“. Disturbing that a 1930s joke from a totalitarian dictatorship is now perfectly applicable to the US …
Another piece of Soviet terminology which fits the situation: refuseniks — people who are being denied permission to cut their ties to a country they do not want to be a part of, just like the original refuseniks in the 60s and 70s who wanted to emigrate from the USSR but found the path littered with bureaucratic obstacles designed to make them fail.
I found the camel fable here: http://en.wikipedia.org/wiki/Russian_jokes
“try to prove you are not a camel” in the sense “try to prove something to someone who doesn’t want to listen”, used in relation to violations of the presumption of innocence by Russian law enforcement agencies or when someone has to fight the bureaucracy to get official papers proving that one has lost a leg or is even alive.)
There are some funny jokes on that page. I’m stil reading them.
I note none of the acceptable ID includes a foreign birth certificate. So, if banks don’t accept our US birth certificates as valid ID, how will they know if we (or our parents) were born in US when FATCA comes into effect?
Are banks planning on demanding to know where all of their existing customers and new customers were born–and where their parents were born? Doesn’t that violate HRC and Charter, as well as privacy? But, then, we’re back to the answer Somerfugl received from Canadian Human Rights Commission which seemed to indicate we will not be protected by HRC under FATCA.
I would the say the opinion of the Financial Consumer Agency is probably stronger than that of the Human Rights Commission on this issue right and basically as I pointed out above the current opinion of FCA(not exactly I well known agency) is that you don’t have to prove or disprove nationality to open a bank account. Now I suppose these rules could change but I find that very unlikely. The statute indicates to the goal of rules is to make access to basic banking open to as many Canadian as possible.
Thanks Tim. That’s reassuring. I hope you’re right. It will help me breathe easier anyway (as I said in another thread, I don’t think IRS is taxing breathing yet!).
“American Refuseniks.” Sums it all up. The plight of Americans abroad can’t be described any clearer than that.
My broker indicated TD Bank was already working on wording where account holders indicate thay are/are not American Citizens, and consent/do not consent to having their personal infromation shared with th US. (That specific wording is my interpretation of what I understood him to say.)
My expectation is that those who decline to respond, or decline to permit the sharing of this information, may become unwanted ex-clients – too much risk to TD.
This strategy upholds the laws of Canada and yet protects the bank from a 30% withholding tax from their US interests.
@David Those who decline to respond become “recalcitrant” account holders and are subject to 30% withholding for the IRS on US source payments. I think the FFI is supposed to collect it.
I would be curious if you could share more info on this in the future. Today if you look at the account opening process at all of the major banks it is essentially the same as mandated by the Federal Government. I don’t see how they can change it without the federal governments approval. Any changes to the Access to Basic Banking regulations needs to be put out to public comment and I for one will be commenting extensively if any changes are ever proposed.
I do think the major bank execs in their towers on Bay Street are quite scared right now of being caught in the middle between the US and grassroots sites like this. I for one plan to enjoy their “fright” throuoghly.
David, I too would like any info as you get it. I’ve already told my bank (also TD) they can expect to lose this 40 year customer if they request me to give any information about my place of birth. They probably would not have minded 40 years ago because I didn’t have any money then. Now, they want to keep me, but my employee credit union is looking better and better.
Tim, they are caught in the middle. I don’t think it’s just a matter of them closing our accounts and dealing with that fallout. They don’t want to lose long-time customers who have accumulated decades of retirement savings with them to the credit unions. But, they know it’s a very real possibility. They also don’t want to lose the business of younger customers who may have mortgages, car loans, etc.
Tim: “I do think the major bank execs in their towers on Bay Street are quite scared right now of being caught in the middle between the US and grassroots sites like this.”
Can you believe how fast this site has taken off without any advertising?
Since I have an internet business I can tell you that even when you spend $1000 a month on advertising it is hard for a new business to get the kind of traffic this site is getting for free.
Deloitte has been posing comments sent to the IRS from the financial industry around the world.
The other thing to remember with Access to Basic Banking Services is the banks already “hate” it for a lot of other reasons. Basically the banks would rather pick and choose their customers and not have to take an a lot of unprofitably and undesirable ones. However both Liberal and Conservatives governments have taken a position that given the small number of Canadian banks they effectively have a monopoly and should be required to provide universal service so to speak as regulated monopolies tend to be required to. The five year Bank Act review is currently underway and their are no changes in the current legislation to accomodate FATCA.