Americans Abroad are Denied Access to Banking and Investment Opportunities

Americans living and working overseas should have the right to banking and investment services, where they reside and in the United States. This is critical in the modern world. Americans abroad should not be subject to discriminatory policies that restrict or shut down banking relationships.

Many banks in the United States are closing U.S. citizen accounts due to the lack of a U.S.-based address. Many banks refuse an overseas mailing address and require proof of U.S. residency in order to continue serving Americans resident overseas. They cite the Patriot Act, Dodd-Frank and a plethora of legislation including FATCA. The FATCA legislation, due to the potential withholding penalties and reciprocal reporting required, is seriously compounding the problem, increasing fear and reticence in the U.S. and international banking community to provide banking services to Americans who reside outside the United States.

Americans overseas are:
Unable to open a bank or investment account in the U.S. because of where they live;

  • Unable to maintain U.S.-based credit card relationships;
  • Having U.S. bank accounts closed, including their retirement savings accounts, with just one month’s notice, despite long-term relationships;
  • Refused long-standing money transfer services by U.S. banks;
  • Prohibited from investing in low-cost mutual funds and ETFs where they reside because of their US citizenship;
  • Constrained to invest only in individual stocks & bonds abroad, because of the costs of the complex tax reporting (PFIC) necessary for the U.S. government;
  • Having pension plans dissolved and incurring financial losses as a result.

AARO and FAWCO recommend:

  • Support the Commission on Americans Abroad Act soon to be re-introduced, calling for a Federal Commission to study the impact of government policies upon the estimated 7.6 million Americans residing overseas.
  • Define a U.S. person’s “foreign” bank account as one which is neither in the United States nor in the country where that person is fiscally domiciled (exempting for U.S. reporting purposes those accounts in the country where the person is employed, must pay taxes, has household expenses, saves for retirement, etc.)
  • Require U.S. banks to provide services for U.S. citizens with a foreign address and penalize U.S. banks that refuse to do so.
  • Ensure equal access to low-cost savings and retirement products in the U.S. and abroad.
  • Stop U.S. tax discrimination against foreign pension and retirement funds and recognize the tax-free nature of foreign pension programs for Americans residing abroad. Exempt foreign pension programs from FBAR and FATCA reporting requirements.

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