The Day My Bank Broke Up With Me: A German Expat in the U.S. Tells All
Here we have a story how a customer was kicked out by her bank.
She set up a modest monthly savings plan in 2009. The customer already lived in the U.S. at the time, but since she was paid in euros by her then-employer, it made sense to invest the money back home.
Setting up a savings plan with Comdirect, the online banking subsidiary of Commerzbank, was an easy thing to do, and she started transferring 200 euros from her salary into two separate index funds every month.
It was not until a year later that she received the first foreboding of what lay ahead. When she inquired about enrolling in the bank’s investment advisory services program in late 2009, she was refused having her status being considered as non-resident.
Anyway, she continued paying into my two funds for two more years until things took an unexpected turn. In the spring of 2012, she was informed in writing that Comdirect was forced to “substantially restrict our securities services for customers resident in the U.S.” As a reason, the letter cited “the increased tightening of the regulatory environment in the U.S.” It ended by stating: “We therefore deactivated your above-mentioned savings plan.”
This was annoying as the customer had hoped to keep contributing to those funds for at least a few more years. In light of stock-market trends, she decided to sell one fund and hold on to the other. So far, so good, it seemed. But when the customer got ready to file her 2012 U.S. tax return, she was confronted with the cumbersome process of having to report to the IRS capital gains for securities that were bought and sold abroad.
Comdirect had filed a 1099-B form disclosing her capital gains in euros to the IRS. But this information was not enough for Uncle Sam: The IRS wants to know what securities were worth on the day they were purchased – in past U.S. dollar values.
It took another 1-1/2 years before she heard from Comdirect again. The bank informed her that “restrictive U.S. tax laws” were the reason for the decision to close her account effective on Dec. 15, 2013.
Original Story at the WSJ Blog