Your Bank Wants to Breakup 

It doesn't make the news. It doesn't happen with a formal notice or an explanation. But quietly, systematically, and with increasing frequency, US-Connected Persons living abroad are being turned away from financial services — or losing access to accounts and products they already have.

This is one of the less-discussed but most immediately practical consequences of being a US person in an international financial system that has been restructured around American compliance requirements. And it is getting worse, not better.

Why Banks Are Walking Away

The compliance burden imposed on foreign financial institutions by FATCA — and the related network of intergovernmental agreements that enforce it — is substantial. Banks must identify US account holders, collect specific documentation, apply enhanced due diligence, and report account data to tax authorities who relay it to the IRS. For larger institutions with sophisticated compliance infrastructure, this is manageable. For smaller institutions, regional banks, and wealth managers without dedicated US compliance teams, it is not.

The calculus is straightforward: if the cost of maintaining a US client relationship exceeds the revenue that client generates, the business case for the relationship disappears. And for retail clients, that threshold is crossed quickly.

This is not discrimination in the traditional sense — it is a rational business response to compliance costs imposed by the US government on foreign institutions. The irony is that the affected individuals bear the consequences of a policy they had no say in creating.

What US-Connected Persons Are Actually Experiencing

The practical manifestations vary by institution and jurisdiction, but the patterns are consistent:

• Account closure notices citing 'regulatory compliance requirements' without further explanation.

• Refusal to open new accounts — sometimes at the application stage, sometimes after initial approval.

• Restriction from certain investment products, particularly non-US domiciled funds, structured products, and insurance wrappers.

• Exclusion from private banking and wealth management services that are available to non-US clients with identical financial profiles.

• Difficulty obtaining mortgages on foreign property, even when fully employed and creditworthy.

In Hong Kong and Singapore — two of the world's major financial centers — US persons regularly encounter these barriers at both local and international banks. The situation is particularly acute for those who are US-connected but not US-resident: they don't fit neatly into the bank's US-person compliance framework, and the institution simply declines to try.

The Brokerage Problem

The access issue extends beyond banking. Major global brokerage platforms increasingly restrict US persons from purchasing non-US investment products. Interactive Brokers — one of the more internationally accessible platforms — still restricts US persons from many non-US ETFs and funds under PFIC and securities law considerations. European platforms routinely block US-connected clients from purchasing UCITS funds under PRIIPs regulations, which conflict with US disclosure requirements.

The result is a narrowing investment universe: US-Connected Persons abroad are effectively channeled toward US-domiciled products, US brokerages, and US financial institutions — even when those options are less tax-efficient, less accessible locally, or simply not the best fit for an internationally diversified financial life.

What Can Be Done

The situation is real, but it is not without options. Some practical approaches:

• Work with advisors and institutions that specialize in US-connected clients. They exist, they understand the compliance requirements, and they have built practices around serving this population.

• Maintain US-based accounts and brokerage relationships. Having established relationships with US institutions provides continuity of access that foreign institutions may not.

• Understand your documentation requirements. Having W-9s, FATCA certifications, and related documentation ready reduces friction at institutions that will work with US persons but require proper documentation.

• Plan for transitions in advance. Changing jobs, countries, or financial institutions is far easier when done proactively rather than reactively.

Longer term, the banking access problem for US-Connected Persons is a policy issue masquerading as a compliance one. FATCA's extraterritorial reach was controversial when enacted and remains so. Several countries have challenged aspects of intergovernmental agreements in their own courts. The political will to reform citizenship-based taxation — which underlies the entire problem — has not yet materialized, but it is a topic of growing advocacy among expat communities and cross-border financial planning professionals.

Next in the series: the ultimate question for some US-Connected Persons — what does it actually cost to walk away from US status? We'll look at renunciation, the exit tax, and the calculation an increasing number of people are making.