Why Is My US Brokerage Firm Closing My Account? – ExpatFocus.com

Initial thoughts

on this column, which I just got via my email subscription to the Expat Focus – Argentina group on Facebook. As a Uruguay resident-in-processing, I do try to keep up with what goes on next door in our “big sister”, Argentina, so I subscribe to it.

ExpatFocus.com logoWell whether you are in Uruguay, Argentrina, Switzerland, Thailand, or Namibia, you may have yet another unpleasant surprise courtesy of Uncle Sam, if you are a “US Person” (a US citizen, or a US legal permanent resident):

Why Is My US Brokerage Firm Closing My Account? – Financial – Articles | ExpatFocus.com.

(Uruguay Expat Life does not have an opinion on the services provided by the author of the linked article, which, while giving good information, is also soliciting customers of that author’s tax services. Caveat lector.)

Just freaking lovely. not only is it becoming damn near impossible to have a bank account in a non-US country as a US person, due to the USA’s draconian FATCA law which attempts, as did Imperial Rome, to extend the claws of its tax collectors worldwide. Now the blowback from that is making US-based financial firms, especially brokerage firms, close the accounts of US persons who live overseas. Because of reciprocity. Country X says, “OK Uncle Sam, we’ll report on the accounts of your citizen in our banks. But your citizen is also our legal resident and perhaps also our citizen – so for you to get what you want, you have to give us the exact same detail on every single penny in and out of her account at any bank or financial services firm in the USA. Because she may be hiding taxable income from us.”

So just like Discount Bank, Citibank, Santander, Banco Comercial, and all the other banks in Uruguay except Uruguay government-owned Banco República now refuse any US account, we could find that US persons with an account here get their US accounts closed.

Even though BROU reports back to the USA, if Uruguay decided it wanted the same thing, perhaps my no-fee no-minimum refund-ATM-fees “checking alternative” account at a brokerage firm might get closed by them, or my 6% interest on first $1000 at a credit union in my old community. The combination of those two are real benefits for me getting US money in Uruguay via free ATM withdrawals, and real interest from the other, with free transfers between them. It’s where Lisa’s and my US-based income from online freelance work and a small pension arrive. We let up to $1000 sit at 6% intereest until a couple of days before we need it, transfer it free to the brokerage checking, and can withdraw it for free – getting back any ATM surcharge the next day. No wires needed, no expensive transfers, plus Visa on one and MasterCard on the other as debit/ATM cards. We are by no means the only expats/immigrants using this type of strategy. Schwab, eTrade, Fidelity, TD Ameritrade and others all have accounts like this.

We do, legitimately, also have a US address, and a room we use at a family member’s US home. That’s the address on file with the brokerage and the credit union. But if at some point in the future we don’t have that arrangement (job moves, marriages, babies, etc.), we originally hoped it would be no problem to simply change the address to here. Now, it well may be a problem. In some other countries, it already is.

Published by

Mark Mercer

Site co-owner Mark Mercer. AKA Marcos Cristoforo Mercer, AKA the Fuzzy Wanderer. Expat from USA living in Uruguay as of mid-2012, after "test-driving" it for a few months in 2011 and early 2012. Married to Lisamaria, AKA well-known travel and fitness writer Lisa Marie Mercer. Follow Mark on Twitter @mcmxs and his many other sites, which you can find at http://about.me/MarkMercer. I write and engage about many of my other interests, on Google+ at https://google.com/+MarkMercer

2 thoughts on “Why Is My US Brokerage Firm Closing My Account? – ExpatFocus.com”

  1. I’m about ready to throw in the towel myself. The crony capitalism in the US is becoming unbearable.
    I have children so any move, especially to a foreign country, is not an easy choice. Many expats have an empty nest and retired. Who you suggest this for people with children who want to provide them with the best education possible?
    I am very good at software development, have worked remotely anyways for several years, and my wife is a freelance translator, also works remote. I think we could easily make enough money, the big question is if we should at this stage of our lives.

    1. Sorry for the delayed comment reply, @rlawson:disqus. I only today had reason to go back to this post when copying it to a non-social-media, non-blog-reading friend.

      I don’t know if Uruguay is the right choice for you, because everyone is different. Though children learn English in school, you aren’t going to find bilingual education, in the true dual-language sense, in the free public school system. For some families, that might be ok. Others may have the resources to pay for one of the private English or bilingual schools.

      But looking at other countries for your family, while your children are still young, is certainly worth considering. There are expats/immigrants here from English-speaking countries with young children. There are other countries to consider that may be easier to deal with in both languages. Perhaps Panama? Also closer to the USA in terms of family visits and family emergencies, and no currency risk due to being on the USD. Well, no currency exchange risk – the US dollar and the overall US economy is perhaps not a good long-term bet in any case, sadly.

      You and your wife sound like you have the skills to take a shot at it. There definitely is no stability nor security in software engineering in the USA, between H-1B abuses lowering wages, perma-temping people to avoid meaningful benefits, and all the other stupid CIO tricks I’m sure you and I could go on for hours about over beers!

      But certainly, it’s a higher risk with young kids. Though possibly for them as well as you, a great reward. Maybe even a better investment in their futures, as multilingual global citizens.

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