Banking Issues

[RAYMOND SCHWARTEN]

An article today in Gringo Tree said it might become difficult to wire transfer money from the US. There was also an article last month that Banco Pichincha was going to be discussing how they were going to handle Expat accounts in the future. Has anyone been effected by these new rules or have you heard that there might be some issues coming up?

[SUZAN HASKINS]

Be careful with Gringo Tree, It is a great resource but it is written by volunteers and there are no sources quoted so you can’t really tell about the legitimacy of the information. I’ve not heard of any issues but will do a quick check and see if this info is popping up anywhere else.

[COUNTRY EXPERT – WENDY DECHAMBEAU]

The banking concern is because of FATCA, the newly implemented U.S. Federal law which is designed to keep U.S. citizens from hiding money overseas.

Essentially the U.S. is requiring foreign banks to report information back to the U.S. on accounts held by U.S. citizens. My neighbor opened an account at Banco Pichincha last week and was required to give far more info than I had to three years ago, but he was able to open the account.

Another requirement of FATCA is that if a U.S. citizen is sending money to a foreign bank that is NOT cooperating with FATCA requirements, then 30% of the funds will be withheld for taxes. My understanding is that whatever amount is not required for taxes will be refunded to the taxpayer.

Here is a link to the wikipedia article on FATCA, but if you google it you can find a wealth of info on the subject.

Long story short: It might take a few months to get everything straightened out with the banks here in Ecuador trying to comply with FATCA, but they’ll soon have it under control. Check with your bank before wiring money to ensure they are in compliance with FATCA or you may be subject to a 30% withholding.

[SUZAN HASKINS]

I could be wrong but it’s my understanding that if you have filed the FBAR and FATCA forms you will not be subject to the 30% withholding. I realize that some people may need an account in Ecuador to qualify for their visa, but we personally have opted not to have a bank account in Ecuador (or anywhere else for that matter) just because we’re tired of all the paperwork. We run on with withdrawals from our ATM cards, no problem.

[GRETCHEN SOLDAT]

I really like your simple lifestyle, Suzan! But I have to ask, how do you get away with NO bank account “anywhere”?? I believe you told me before you have Capitol One.

And, why would a local bank account be required for a visa for “some people” and not others?

I’m glad we wired our money a year ago, before all these new regulations kicked in.

Thanks for the info!

[SUZAN HASKINS]

HI Gretchen, I didn’t say we don’t have a bank account — we keep our account in the US and use that to pay bills such as our US credit cards, etc.

Some people need a bank account in Ecuador if they are qualifying for certain visas. There is an investor visa where you need to invest 25k in a CD held by an Ecuador bank, for example. And for a retirement visa you need to prove you have a certain amount of money to live on.

We also have an investor visa but it is based on owning our apartment, not on any bank balance.

Hope this explains things. And my lifestyle is not all that simple, believe me… there are always hoops to jump through. We’ve had bank accounts in Mexico, Panama, etc (now closed) and just chosen not to go that route any more.

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