FATCA reporting requirements force foreign banks to close accounts of US-connected persons

The Foreign Account Tax Compliance Act (FATCA, enacted 2010) requires foreign financial institutions (FFIs) to report accounts held by US persons to the IRS or face 30% withholding on US-source payments. So what? Many foreign banks, especially smaller ones, find FATCA compliance costs ($50,000-500,000 annually for IT systems, legal review, and reporting) disproportionate to the revenue from US-connected clients. So what? These banks simply refuse to open accounts for anyone with US ties -- a US passport, green card, US address, or US phone number -- or close existing accounts when they discover US connections. So what? Immigrants and expats who maintain financial ties to their home country (to support family, receive rental income, or manage inherited property) suddenly find themselves unable to bank in their own country of origin. So what? They must either hide their US status (illegal under both FATCA and local banking regulations), find one of the few FATCA-compliant banks willing to serve US persons (often with high minimum balances of $100,000+), or abandon home-country financial management entirely. So what? This effectively forces immigrants to sever financial connections to their home country, making it harder to support family, manage property, or maintain a financial safety net in case they need to return. The problem persists because FATCA was designed to catch wealthy Americans hiding money offshore, but applies equally to ordinary immigrants. The cost-benefit analysis for small foreign banks makes dropping US persons rational. Congress has no mechanism to compensate foreign banks for compliance costs, and repeal efforts have failed because FATCA generates $1-2 billion annually in recovered tax revenue.