Troubleshooting: Bank Accounts

Some time ago I was sitting with some friends and the conversation turned to banks and bank fees.  Both of my friends shared how much they hated “establishment” banks and described with relish how they had recently “fired” them.  They had chosen to move on to the “internet only” banks.  One banked at Fortuneo, the other recommended Boursorama.  I was happy with Societe Generale and had long ago written off bank fees in France as “part of the deal.”  Turns out, as an American citizen, I don’t really have a choice.

I went through the process of applying for a basic checking account at both Fortuneo and Boursorama, banks that leveraged technology and virtual offices to offer low-to-no fee banking.  At the end of both applications I was rejected, in no uncertain terms.  Not because of my credit score (because there’s no such thing in Europe), but because unlike my friends, who possessed German and Czech citizenship, respectively, I was considered a “US person” for legal purposes, and was subject to FATCA.

FATCA (Foreign Account Tax Compliance Act) became law in 2010 in the US but came into force officially in France this year.  It places an enormous regulatory reporting burden on French banks servicing US citizens.  The “budget banks” mentioned above do not have the means or the staff to comply with this reporting requirement so they rejected me.  I was told by one person in the know that it costs French banks up to 10,000€/year to service someone like me (a “US person”).  This is all because the US government is determined to get its grubby hands on every last shred of our income, even if it was not earned in the USA.

Now, even if that number of 10,000€/year is wildly exaggerated, something like 2,500€/year is still a lot just to comply with US reporting requirements.  When you keep that in mind, you can smile your way through the two hour process of opening a new checking account, as I had to do a few months ago for my new French business.  It’s not enough to sign a few forms and give the bank your money, as we often do in America.  The French want to know what kind of business you are operating, how much money you think you will make, the name of your most recently deceased pet, etc.

Part of this is simply a “get to know you” policy that French banks are encouraging these days.  But part of it is both French governmental compliance and now US regulatory compliance.  My poor counselor told me that I was his first “US” account and he called in backup from his colleagues no fewer than three times as unexpected screens kept popping up during my registration.

All in all, I was happy with the process and BNP Paribas offers the same level of service and convenience that I’ve become accustomed to with French banks but is (to my knowledge) not widespread in the US.

  1. RIB (releve d’identite bancaire) This is an upgrade over traditional “online billpay” as there is never a paper check issued.  The money leaves your account and 48 business hours later it is in another account, whether it’s the account of a friend or that of a regular payee of your household.  When you add a new payee you must key in a pin and everytime you issue a RIB payment to someone you must key in a pin.
  2. App-based verification for online purchases.  When you make a credit card purchase on the web you will receive a push notification on your phone.  You must key in a pin in order to approve the purchase.  Then, and only then, is your purchase approved.
  3. No ATM fees.  By French law, you cannot be charged fees for withdrawing your own money, even if it’s from the ATM of another bank.  So you can use any ATM anywhere, anytime.

It’s a lot of trouble to set up a French bank account as an American these days, but once you have that account, it’s a great thing, and it makes your life here that much easier.

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Getting a Bank Account in France

It’s actually not that hard to get a bank account in France.  What’s hard is getting your debit card.  To open an account, stop in at your local bank of choice (I chose Societe Generale because it was and is close to my place) with your passport, some money, and proof of residence (this will be a quittance de loyer or attestation de hebergement).

To get a debit card you will need to transfer a substantial sum of money into your account.  They will ask for 1000 euros – I talked them down to 500 – which will have the excitement of your American bank charging you for a wire transfer, your French bank account charging you for your own wire transfer, and the transaction fee of converting dollars into euros.  My personal expat experience has allowed me to conduct most of my life using American bank accounts, allowing my French bank account to deal with minor day-to-day expenses which would help me avoid carrying cash around all the time (like the UGC Pass Illimite, which occasioned my getting an account in the first place, something I originally resisted.  More about the Pass in a future piece.).  Unless you have a phenomenal bank in America (like mine) you’re going to get killed in foreign transaction fees, so beware.

Only after I got a wire transfer in did I get my debit card – with a pre-assigned PIN.  That PIN, by the way, can’t be changed unless you want to pay to change it.  Brilliant or cruel?  You decide.

My account came standard with a ton of limits that a regular bank account in America wouldn’t correspondingly have.  I could only withdraw 50 euros at a time from an ATM, up to 100 euros a day.  I could only charge so much on my debit card every 7 days, etc.

Even when you want to change your address you have to show proof.  In America I would call and change it, end of.  Not here.  The French love their paperwork.  Don’t you forget it!

If you are here for any period over 3 months, get a French bank account.  It will be a bit of trouble, but well worth it!