I don’t believe this information has been posted yet on Sandbox, so I’m cross-posting this information from Brock (and from some private emails in the past couple of days).
It is my understanding that under FATCA, credit unions are exempt from reporting any accounts held by Canadian residents, if those credit unions have fewer than 2% of their accounts held by non-residents of Canada. This was stated in a draft publication issued by Credit Union Central of Canada, earlier this month, provided to me privately by someone who managed to get it from CUCC’s website. The document says it is still a draft, but also says “while final Guidance is not expected until sometime in May, the current version is complete enough to be a reliable source.” They are collecting comments from member credit unions to provide to Finance Canada by April 4.
With the above qualification, I quote directly the following paragraph in the document provided to me:
“Credit unions which hold less than two per cent of their deposits for non-residents of Canada will qualify for reduced reporting obligations. They will identify and report only accounts of members who are U.S. persons and who are not residents of Canada. Unlike internationally active banks, they will not be required to report accounts of members who reside in Canada. “
I just minutes ago received an email reply to a website query I sent to Alterna Savings, a large Ontario credit union where I’ve been a member for nearly 40 years, asking on behalf of a non-Canadian-resident relative whether a non-resident can open an account with them. I sent this email after reading the above-referenced Guidance document.
The reply is sorry, we don’t offer accounts to anyone not a permanent resident of Ontario.
Hence Alterna Savings also has 0% account holders non-resident in Canada. Hence they are FATCA-exempt. Even though they are well over the $175 million threshold. According to the information provided by Credit Union Central of Canada to its members, Alterna only has to report accounts held by US persons who are not residents of Canada. But with no accounts held by persons other than Ontario residents, this means Alterna has no requirement to report any of their accounts to CRA and then to IRS.
I don’t know, but I suspect this will be true of all credit unions in Ontario and probably all provinces of Canada, though this probably needs verification. Another poster at the Brock website has already verified with a British Columbia credit union that they don’t accept accounts from persons not permanently residing in that province. I invite other visitors to this website to make inquiries in their own provinces and report back on this thread what they’ve learned.
If you are a Canadian still looking for a reason to switch to a credit union (and there are excellent non-FATCA reasons for doing this, like depositor ownership of the institution and voting rights), look no further.
If you want your financial privacy respected in Canada and you have US indicia, you aren’t going to get respect for your rights from any chartered bank – only from a credit union that doesn’t allow non-Canadian-resident persons to open accounts with them. Which I believe is most credit unions, perhaps all but I’m not sure about jurisdictions outside BC or Ontario, or Ontario credit unions other than Alterna. But I am sure about Alterna; I have their email in reply to my inquiry on their website, signed by a named employee.
I’d do this even if you have or are getting a CLN (I’ve had a CLN now for more than 35 years). The banks folded on FATCA. They didn’t put nearly enough of a fight, they pressured our government to cave in, so make them pay where it will hurt them – through withdrawal of every penny you have with them, depositing to a credit union instead. The credit union organizations world-wide have been far more outspoken against FATCA than any banks I’ve heard of. The credit unions deserve and have earned your and our support. The banks haven’t.
In the interest of full disclosure: I’ve been a member of Alterna Savings credit union for about 40 years. I’ve not had money in any chartered bank during that time. But I’m not on any credit union board, never have been, have never worked for them, nor do any of my family have any of these possible connections, and my only connection with them other than my accounts is my sole $15 membership share.
Let the Canadian Bankers Association rot in Hell. Never forget; never forgive. Je me souviendrai. (Sorry, I’d love to translate the rest of this post, but my French is nowhere near good enough without the result being an insult to my francophone friends and co-citizens.)