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:
Awesome. We have a Your Neighbourhood Credit Union that’s about a 2 minute drive from our house.
The only reason I didn’t switch all our banking to them a year and half ago when we switched banks was because they don’t offer US dollar accounts which I need to operate my business.
I’ll be looking to open an account at Your Neighbourhood Credit Union in the future and all of our savings money will be held there.
@OMG: Your Neighbourhood staff were amazing. Customer service superb.
Their head office is in Kitchener. They charter buses from other cities where they have branches so members can attend the AGM. I don’t know if other credit unions do that.
YNCU is over the $175 million, but is sounds like they have no intention of finding our if their customers are “US persons.”
Their website has nothing about FATCA–unlike the information from Meridian. Also, their website indicates they do have US $ accounts if that is something you need for your business. That may be new since you asked.
1. Savings Accounts
Whether it is your first bank account or a US Savings account, we have something that will fit.
Personal > ProductsAndServices > EverydayBanking > SavingsAccounts
2. Chequing Accounts
If you frequent the US for business or leisure, consider our US Dollar Chequing Account for hassle-free banking in US funds.
Personal > ProductsAndServices > EverydayBanking > ChequingAccounts
I had your e-mail address, but I can’t find it. Could you contact me at maplesandbox at yahoo dot ca? Thanks.
@Blaze, I sent you an email.
I just noticed they have a US Dollar Chequing Account. That must be new because I called them a year and a half ago and they said they didn’t have that.
Why wouldn’t they be subject to FATCA? The US could still threaten them with withholding. I need a US dollar chequing account because I get paid in US dollars from a US source. Also my international wire transfers are done in US dollars and come through US intermediary banks.
@Blaze, Your Neighbourhood Credit Union sounds brilliant and they are doing what they need to do and that is FOLLOW the law as written, nothing more and nothing less.
That compliance note from KPMG in the older comments shows who the “enemy” is and it is the compliance industry making money.
@omgheestillanamerican, they ARE subject to FATCA but they are following the law and electing the local client exemption that the compliance industry can not generate professional fees from.
The compliance industry wants to frighten everyone so they can generate fees, period.
Thanks for the explanation George. That makes sense.
I think I will play it double safe and when the time comes open a savings account at the credit union under my name only since I’m not US tainted.
@omgheestillanamerican, thats a reasonable path to take. At least with the internet everyone can get a sense as to what the compliance industry has done to the financial institutions.
Any financial institution worldwide that asks for Place of Birth should be shunned.
But again, expat US permanent residents are the ones who are likely going to be in a tight spot. Those who relinquished (documented or not) can find a path to keep functioning.
Again, I am extremely disappointed that the compliance industry appears to be recommending that local client base firms instead be full FATCA reporting when they do not need to be under the law.
@george,@OMGheesstillamerican……….. thanks for your posts, I think it reinforces my decision to move most funds to local UK building societies (although this sector is under siege).
I intend to find out if UK Building socs are subject to FATCA……dont know.
also is the new local area bank that is open 7 days pwk metro bank also subject to FATCA?
dont htink they are building society mutual elgal structure but by gum they have mutual attitude.
interesting that they were founded by american person with huge success rate in american banking.
I hate to be ‘Debbie Downer’, but I did not read anything in the text from Neighbourhood CU that indicated they will NOT be implementing FATCA starting July 1, 2014.
WK. You have to read between the lines. This is what all Canadian financial institutions are going to do. Neighbourhood C.U. was saying ‘We welcome you. We won’t ask if you are a’Murican. Please don’t do anything silly like telling us. Open your new account with a driver’s licence.’
Her previous C.U. could have said the same thing but they chose to be silly buggers about it.
I ageee, it’s a poorly-worded reply and not very comforting. They did not say “We are a deemed-compliant non-reporting Canadian Financial Institution by virtue of the fact that we only allow Canadian residents as customers”.
All they said was
When Your Neighbourhood Credit Union receives a new Membership Application we require the following information
The above does not use the future tense or say “after June 30”.
They said to read the IGA yourself!
@WhatamI, I disagree and think that reply from YourMeighborhoodCreditUnion was very comforting and believe thats the best you are going to get in this new era.
@crystal london, lets talk Building Societies and this will be redundant in parts but others may benefit.
Building Societies are specifically referenced as firms with a Local Client Base. So are Credit Unions but they are harder to find but it is doable. Pull out the agreement;
But remember the Building Society does have some FATCA obligations. If a US Person is no longer UK Resident the account must be closed or the party must be ratted out. So this tells us there MAY be some intrusive questioning.
However, this compliance industry language from KPMG in Canada gives me pause and concern. I “sense” they may be recommending to simply report everyone;
For comparison, go online with a certain major High Street Bank and see the account questions. You are not getting that with most Building Societies. But to be honest, the questions they are asking is way over the top, likely discriminatory and solely a product of the compliance industry.
Before you open an account, print out the identification material they want to open an account. Opening an account online, if you can pass an electronic check there is no further documents but you must be on the Electoral Roll meaning you are a British Citizen, exceptions do apply.
In opening an account and this is probably good, you need to ask yourself if you are a US Citizen. If you relinquished or renounced and have a CLN its clear. If you are an undocumented relinquisher without a valid US passport, do not vote or any other US indica then you are likely not a US Citizen. But we all now need to be very honest with that question and no finger crossing.
Weither you are a documented or undocumented relinquisher, I think you need to follow the account opening document rules exactly as written and if possible do not use account opening documents that show a US indica.
I was told by a High Street Bank that they will report all accounts under FATCA, regardless of size if you have a US Place of birth on record with them. It would not matter to them if you have a CLN or not, they do not care nor want the CLN.
Also remember that HMRC has given guidance that basically now says that everything is reportable regardless of size UNLESS the financial institution opts into the lesser IGA reporting.
Long term resident Americans with ILR, are going to be hit by a lorry come July. I have spoken to some and they do not have a clue whats coming. “America would not do that to me.”
Anyways, when traveling in the 70’s I always took the advice of do not stick out like a loud mouth American. Blend in to the culture as much as you can, leave Americana at the door…… That is good wisdom for today post FATCA.
With regards to your quote from YNCU detailing the information they require for opening a new account, did they say specifically that this applies after June 30? What they said is typical of many FIs for opening new acconts today, but the spirit of FATCA and the IGA is that they have to “do more” when opening new accounts after June 30.
Maybe they know they are “deemed-complaint non-reporting”, which is supposedly available for FIs that only allow Canadian residents to hold accounts?
What do you think of this? Posted on First Calgary Financial’s site:
https://www.firstcalgary.com/Accounts/ (see “Understanding FATCA” on the right side)
They state: ” By registering as a Local Client Base financial institution we believe we have significantly reduced the impact of FATCA on the majority of our members. As a result of our Local Client Base classification, First Calgary Financial only needs to collect FATCA information and report on member accounts held by nonCanadian residents.”
Thanks for the link — good find! About time something like this is shown in Alberta and Calgary for First Calgary Financial customers who are Canadian residents!
And for non-Canadian residents, their policy would, then, still be as they state:
1. What does First Calgary Financial need to do to comply with FATCA?
Effective July 1, 2014 under the Intergovernmental Agreement (IGA) made between the Canadian and U.S. governments, First Calgary Financial is legally required to identify and report certain financial account information annually on U.S. persons (U.S resident or a U.S citizen) living outside of the United States to the Canada Revenue Agency (CRA).
My sister passed this link to me, she found it confusing so I thought I would post it here.
I’d say First Calgary Financial does not have a good grasp on the FATCA monster at all. Either that or they are being deliberately obtuse. They may think the U.S. tainted among their membership is too few to stew over but Calgary is a hotbed of people with U.S. linkage. There may be more of their members affected than they think and these members will subsequently become angered by FCF’s FATCA witch hunt, no matter how limited they think it might be.
Great news that another FATCA-free credit union has arrived! Not that I would put my money there. I get 1.95% on savings at AcceleRate Financial (recently lowered from 2.1%) whereas First Calgary only pays 0.8% (similar to the Big Bank’s rates). That’s $115/year difference for each $10,000.
I agree with @heartsick that the “Learn more” PDF is confusing. It seems to be an old general FATCA document directed at _reporting_ FFIs that was edited to reflect their new-found “deemed-compliant non-reporting local base” status, but the editing within the table is incomplete making it contradictory and confusing. I say ignore the table info in points 1 to 16. The preamble is correct: “As a result of our Local Client Base classification, First Calgary Financial only needs to collect FATCA information and report on member accounts held by non-Canadian residents.”.
I don’t think I understand @EmBee’s comment. Since the majority of their customers are Canadian residents, they are not impacted by FATCA insofar as their First Calgary accounts are concerned. They stated that, and I don’t see a problem with the statement.
One detail that I’ve never seen in writing: it’s my_guess_ that such deemed-compliant non-reporting FFIs will _not_ question their Canadian-resident customers about being a US person, or even to prove that they are Canadian residents. I assume they’ll go by the address on record for the accounts. Therefore, US persons (dual-citizens) with accounts at such institutions will be treated equally as any other Canadian citizen (indeed, even if they are not Canadian citizens!), as long as they are resident in Canada. If such a US person leaves Canada, then they will be asked if they are US persons and reported if appropriate. This is true for all such FFIs, including VanCity, for example.
It may be that I interpret non-Canadian residents differently. I take that to mean anyone resident in Canada who is not a Canadian citizen. Are others thinking it means a member who resides in the U.S.A.? Credit Union’s supposedly only take members who reside locally so they’d be unlikely to have an American or even a Canadian in their membership who resides outside of Canada. That’s why I figure they could have more members affected than they think because they would have Americans (i.e. non-Canadians) who are residing here in Canada with PR cards. My husband was a non-Canadian member of a local Credit Union for a number of years. Maybe I’m just confusing this discussion. Sorry.
Ah, that explains your comment.
In the context of FATCA and banks with a local client base, we’re talking about customers who are not resident in Canada but somewhere else in the world. No question about that. The local-client base FATCA exemption says that if a Canadian resident who is a US person leaves Canada (permanently), the FI must have a policy in place to start reporting on that person, or close the account. The FATCA exemption says they don’t care if these Canadian residents are US persons or not. It’s like a “same country exemption”, but restricted to FIs that meet certain requirements (local client base, or no account over $50,000, or total assets under $125 million or whatever the number is, etc).
That brings the question of whether a credit union will wait until a customer leaves the country before they bother to ask if you are a US person, or if they will start collecting that data _now_, just in case, so they have it if and when they need it. Hopefully, it’s the former, but even if they ask now they don’t have to report any US persons to the CRA for FATCA.
Now you know why I opened accounts at 9 credit unions prior to July 1, 2014. Only 3 turned out to be FATCA-free but it was impossible to determine their FATCAness before the July date – they didn’t now yet!
If they had wanted to make things perfectly clear, they could have said NO “resident of Canada” (Canadian or non-Canadian citizen) will be reported and not messed my mind up with only “non-Canadian residents” will be reported.
The wording in the IGA itself is clear though:
“a Specified U.S. Person who is not a resident of Canada (including a U.S.
Person that was a resident of Canada when the Financial Account was
opened but subsequently ceases to be a resident of Canada)”
I agree it’s ambiguous. Non-Canadian residents can be Canadian permanent residents, or residents of all other countries (not only American, but any other nation for that matter).
How about moving the hypen, as in “non Canadian-residents”? 😉
@Whatami : Good grief. The author of those instructions at the CU needs to be sent back to school. Use of English language needs to be TAUGHT ! It is insane when concepts get so messed up by what you probably correctly note is the incorrect location of a hyphen. Someone who is Canadian born and Canadian ONLY needs to go in and ask some questions and ask for some writing from the CU.