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Friday, June 28, 2013

French Law and Basic Banking Services

Lots of documented stories out there right now of U.S. Persons (U.S. citizens and Green Card holders) being denied banking services both inside and outside of the United States.  Some banks are even putting up notes on their websites that they will serve anyone except people with a connection to the U.S. That connection can be something as simple as being a European couple with a child who attends university in the U.S.  I've received stories from readers and both the Association of Americans Resident Overseas (AARO) and American Citizens Abroad (ACA) are collecting people's tales of woe.

Hanging Together:  If you or someone you know is in this situation, the first thing to understand is that you are not alone. This is happening all over the world as FATCA marches toward implementation.   I urge you to send your story to one of the above organizations - the more documentation they have, the more effective they can be on your behalf.  Remember Ben Franklin's saying: "You must all hang together, or assuredly you shall all hang separately."

Contact Local and Regional Lawmakers:  If you are a dual citizen or an Accidental American then talk to your local or regional lawmakers too.  If you are in Europe then you should know that there are Members of the EU Parliament who are very interested in the impact of FATCA on their citizens.  A letter to your country MEPs with a copy to Sophie in't Veld (MEP - The Netherlands) is definitely a good idea.

Know Your Country Law:  Depending on the country you live in, the bank that refuses you or who tries to close you existing accounts, may be in violation of local law.  ACA has this article about Germany which is not terribly encouraging but every country is different so it's worth taking the time to find out what your rights are.

Just for fun let's look at what French law says about access to banking services in France.  To my surprise, the news is a bit better.

Under the Code monétaire et financier - Article L312-1, Chapter 2, section 1 it says:
Toute personne physique ou morale domiciliée en France, dépourvue d'un compte de dépôt, a droit à l'ouverture d'un tel compte dans l'établissement de crédit de son choix. Toute personne physique de nationalité française résidant hors de France, dépourvue d'un compte de dépôt, bénéficie également du droit à l'ouverture d'un tel compte dans l'établissement de crédit de son choix.
(Every natural or legal person living in France, deprived of a deposit account, has the right to open such an account at the credit institution of his choice. Every natural person of French nationality living outside of France, deprived of a deposit account, also has the right to a deposit account at the credit institution of his choice.)
Read that carefully. The right to a bank account is not limited to French citizens - it covers ALL persons who live in the Hexagone.  This right was reinforced by a charter that the banks are held to (une charte d'accessibilité bancaire) which has a list of the services that banks are required to provide which include a debit card and checks. Note that the bank can refuse to open an account for any reason and can also close an account.  However, when this happens there is recourse for the person who was denied services.

If the bank refuses to open an account for someone, it must provide that person with a letter documenting the refusal and explaining his rights.

The recourse then comes through the Banque de France.  The person denied services can send the refusal letter and proof of identity and residency to them and they will find a bank for that person either close to his home or in another place of his choice ("désigne un établissement de crédit situé à proximité de son domicile ou d'un autre lieu de son choix").

Please note that this recourse is not available to people who already have accounts.  It can't be used to open another account with another bank.  The person must be facing a complete loss of all banking services to be eligible.

Also it only provides for access to basic banking services (I would assume this means checking and savings) and does not include investment accounts and the like.

The bank also has the right to close the account it was forced to open.  However, it must give a reason and two months notice before closing the account.  If the person is then left without any access to services at all, then he is back to contacting the Banque de France and going through the procedure again.

For a foreigner who has recently arrived in France and has limited French, this can be a real problem.  Naturally the laws are in French and a new resident may not understand his or her rights. I could see a bank playing on the ignorance of the non-French person and trying to get away with refusing him without any explanation at all.  There is also the file one must prepare for the Banque de France which must also be in French.  But this is France, folks, and the official language is French (why this surprises people is always a mystery to me).  This is a very good example of why learning the local language is not optional.  No, it is absolutely necessary for survival.   It's that or throw yourself on the mercy of someone who can interpret for you but that's not a viable long-term strategy in my opinion.

So there you have it.  I'd be very interested in hearing from readers about the local banking access laws in their country.  Does the U.S., Canada, Japan or the UK have any laws similar to this?


Ellen Lebelle said...

This is great -- for basic services. However, it does not help us when it comes to "investment" accounts, such as "assurance vie", PEA, Sicavs....

Christophe said...

Great research, Victoria.
As Moscovici is pushing for a European FATCA and global exchange, I hope that the current restrictions to US persons will go away. However, I think that these restrictions come from the bully approach of the US and fear of the 30% withholding. If FATCA stays law, and withholding is put in place, US persons might still have restricted access. I hope that will change, and that people like Sophie Int Veld can do something about it.
I also wonder if things would change if the US switched to RBT.

It wouldn't be fair if countries have it both ways: global information exchange AND refusing services to non-citizens. This type of discrimination should not exist in today's society.
Another thing that could be helpful is to have the press take on the subject. In France, I don't think the banks will do anything that would harm the French spouse. This is not Switzerland. The situation would get messy.
I am surprised that there we've not heard of public demonstrations in Switzerland, but I think that at some point, this should happen to make people aware of such discrimination. People and especially the French spouse should be willing to go public to help with these issues.
Demonstrations and press coverage are pretty effective to get things changed in France.
At some point, wealthier people affected might sue as well.

Blaze said...

Yes, Canada has similar banking laws. I've learned about them over the past two years from Tim.

Under Access to Basic Banking Services, Canadian banks must open an account with few exceptions relating to fraud, a crime against a bank or threats to staff or other customers.

Banks here cannot ask for a person's place of birth or other citizenship. In fact, they cannot even accept a foreign birth certificate as recognized identification. Only Canadian birth certificates are acceptable.

So, the huge issue here is how will Canadian banks ever possibly identify who is a "US person" based on place of birth or based on parent's place of birth.

Unknown said...

This is both depressing and tremendously informative, Victoria, thank you!

Ellen is right, doesn't help if you're refused a way to plan for retirement or a kid's education, but it's something and thanks to you, it is clear!!

Rosy thte Riveter said...

My personal experience concerns not outright refusal of banking services, but a hell of a lot of sudden harassment from the bank I'd been with for about 40 years - since I started working here in France. Things like repeated requests for the same information - which the bank didn't even need to ask me for since my salaries go right into the account, refusal to provide me with receipts for all the (superfluous) information I repeatedly provided anyway, refusal to answer my questinos and, utlimately, complaints concerning poor service which other people I know banking with the same bank were never bothered with...etc. There's such a thing as pressure, but never so obvious so as to permit a due process complaint to the Banque de France. THIS IS THE DEVIOUS FORM, NOT OF OUTRIGHT REFUSAL, BUT OF REAL DISCOURAGEMENT TO CONTINUE BANKING WITH THAT BANK.