Access to the Financial System

Published May 2026

Americans living overseas have experienced a variety of problems maintaining access to the financial system worldwide (often called “de-banking”).

Overseas Americans need access to basic banking services, savings vehicles, brokerage accounts, and retirement plans on a low cost, non-discriminatory basis both in their country of residence and in the U.S.A. However, gaining such access and maintaining it have been recurrent problems. The roots of these access problems in the United States and where U.S. expats live are very different and require different solutions.

Access Outside the United States. For U.S. expats and dual nationals living outside the United States the major problem accessing the financial system where they live, i.e. outside the United States, is the U.S. tax code. This treats most non-U.S. savings vehicles and retirement plans punitively. The passage of FATCA was intended to enhance U.S. tax enforcement by imposing burdensome reporting responsibilities and threatening crippling fines on foreign financial institutions. Since then, U.S. persons have been widely considered by the industry to be high cost, high risk and mostly low reward clients. In the EU, implementation of Directive 2014/92/EU, which has been transposed to national laws, has been helpful, assuring legal residents access to basic banking services where they live. But it does nothing for savings vehicles or retirement plans in the EU and, in other regions, including Australia, Canada, Asia, and the Middle East, U.S. persons experience similar problems.

Solutions are needed. The core of the problem is the complexity of the U.S. tax system based on citizenship, unique in the world. Our organizations strongly recommend aligning the United States with the nearly-universal practice of basing taxation on residence. To this end we support the bill introduced by Representative Darin LaHood (R. IL) in the 118th Congress which provides an option for qualifying expats to adopt a residency-based tax system. This bill is expected to remove the FATCA reporting requirement by foreign financial institutions and to assure that foreign financial institutions do not have policies or practices discriminating against opening or maintaining an account for U.S. citizens resident in their country. 

Access in the United States. The challenges for overseas Americans trying to open and retain financial accounts in the United States mainly derive from Know-Your-Customer regulation. This is rooted in the Bank Secrecy Act of 1970 and subsequent laws and regulations to combat money laundering and financing of terrorism. These rules are substantially aligned internationally around standards agreed by the Financial Action Task Force (FATF), an intergovernmental group whose U.S. representative is the U.S. Treasury. FATF standards and recommendations^[1] have no legal force but they have been well-integrated into not only national laws and regulations but also bank software systems, at least in the United States and Europe.

The most important feature of these standards is that, with no explanation, they formally embed discrimination against expats by deeming all non-resident customers of financial institutions to be “higher risk”. No requirements for probable or even reasonable cause appear to exist before a transaction or an account is deemed “high risk”. But once this happens the account becomes vulnerable. “Enhanced” Customer Due Diligence, usually involving intrusive (and high cost) information gathering and other general harassment, becomes required and has often been the prelude to the account’s suppression.

Solutions are needed

Revision of Standards. These standards need to be revised^[2], at both the international level and in their transposition to laws and rules in the United States, to eliminate the biases which have made non-resident Americans unwelcome in U.S. financial markets.

Executive Order. Since comprehensive revision of these standards will not happen quickly more immediate corrections are needed. The President’s Executive Order, “Guaranteeing Fair Banking for all Americans” (August 7, 2025), offers a good starting point. Its intent is clear and its title is perfect but the Order’s focus on protecting businesses from “politicized and unlawful” de-banking risks helping only the tip of the iceberg. Non-residents’ problems, and we suspect those of many other groups being “de-banked”, are not due to “reputational risk” but to designation by regulators as “high risk”, hence high costs. The Order should be broadened to protect individuals as well as businesses and embodied in legislation.

Designation of Host Bank. Access to at least the most basic elements of the financial system, such as making payments and hosting retirement savings, is essential in modern societies. It should be assured as a matter of public policy much as if it were a public utility. The implementing laws in EU countries to ensure access for all residents to basic banking services offer operational models that would offer workable solutions for U.S. citizens who want accounts in the United States. Under this model, where necessary, the monetary authorities designate a bank (not necessarily the person’s first choice) to offer basic services. The Federal Reserve or OCC should do the same in the United States to assure not only access to these services but also to the asset custody and brokerage services necessary to maintain IRAs and other tax-sheltered retirement accounts.

^[1] FATF (2012-2025) “International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation”, FATF, Paris France.

^[2] Specifically, Section H in the Interpretive Notes applying to Recommendation 10 (Customer Due Diligence) In addition, the extraordinary measures beyond normal due diligence required in Recommendation 13 for dealing with Correspondent Banks should be lightened.

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