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Foreign Currency Regulations

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  • 10-19-2012, 07:45 PM
    TheArgumentative
    Foreign Currency Regulations
    My question involves personal finance in the State of: New York (and federal)

    Does the United States have any laws or regulations on citizens opening foreign currency denominated bank accounts that are substantially more onerous than every other country?

    Any bank in Canada will let its Canadian customers open a chequing account denominated in US dollars, and my relatives in England have no trouble keeping US dollars and euros in their bank accounts, but I've called over a dozen banks in the US and none of them will let me open a checking account denominated in Canadian dollars. (Except Sun Trust, at any rate, but their closest branch is in Washington DC.)

    Several bank employees suggested it was illegal to open a foreign currency denominated account in the US, though one bank employee didn't know what the word "denominated" meant so I'm not quite sure they all knew the law as well as they thought they did.

    So is there any (legal) reason why no US bank will open a FCDA? Or is it just a decision on their part, since FCDAs might cut down on the truly massive fees they charge for currency conversion? (Last bank I asked offered 0.96/1.08 to buy/sell CAD; I've never seen a spread that large outside of shady money-changers in tourist centers.)

    If you know of any onerous legal restrictions on FCDAs in the US, please let me know. And if you know of any banks that offer FCDAs (or exchange currency at reasonable rates), I'd like to know about that too! :)

    Otherwise, I will have several hundred Canadian dollars in an envelope for a year or few until I go back north to spend them.
  • 10-21-2012, 01:12 PM
    Mr. Knowitall
    Re: Foreign Currency Regulations
    Quote:

    Quoting TheArgumentative
    View Post
    Does the United States have any laws or regulations on citizens opening foreign currency denominated bank accounts that are substantially more onerous than every other country?

    Research the laws of "every other country", then let us know.
    Quote:

    Quoting TheArgumentative
    ...I've called over a dozen banks in the US and none of them will let me open a checking account denominated in Canadian dollars. (Except Sun Trust, at any rate, but their closest branch is in Washington DC.)

    That's likely an issue of there being no appreciable demand.
    Quote:

    Quoting TheArgumentative
    Otherwise, I will have several hundred Canadian dollars in an envelope for a year or few until I go back north to spend them.

    Try asking your bank to exchange your foreign currency for U.S. dollars.
  • 10-22-2012, 05:56 PM
    TheArgumentative
    Re: Foreign Currency Regulations
    I suppose you might be right about lack of demand. I called TD Bank (which operates in both the US and Canada) and they said that their Canadian branches offer USD accounts but their US branches don't offer the reverse because if US account holders withdraw money in Canada, the withdrawal is converted at interbank rate, making a Canadian-denominated account superfluous.

    Of course, I still can't convert my CAD without paying massive fees; TD's spread is no better than anybody else's; $0.96/$1.08 with a $10 fee on top of that! And with the Canadian dollar now weaker in comparison, the rate's probably gotten even worse.
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