Firing Société Generale

One of the earliest articles for this blog was about my experience getting my first French bank account at Societe Generale.  The process was relatively painless, but that was before FATCA came into force and made life more challenging for US citizens living abroad.  Still, possession of any form of long term visa will allow you to get a bank account here, as I shared some years later.  When it came time for me to open a bank account for my French business, I decided to hedge my bets and audition another company, BNP Paribas.  Time has shown them to be the better bank for me, and armed with additional European bank accounts at N26 and Transferwise, I fired Societe Generale from my life in February.

Mais pour quoi?

Given how challenging it can be to open accounts these days, why would I get rid of one I had?  Well, firstly, bank accounts in France are rarely free.  There’s a monthly service fee (in this case, 17 euros a month for a very basic account) whether you have any activity or not.  Secondly, I had already had exceptional service from BNP that Societe Generale couldn’t match.  When I moved from the 2nd to the 19th, I was able to change my “home agency” using the BNP Paribas app.  With Societe Generale, it was a nine month saga, with multiple trips to my original agence in the 17th.  But the last straw was a denial of a loan.

Americans are used to having a “credit score” which tells lending institutions how worthy we are of being loaned money, and at what rate of interest.  There’s no such thing in France.  Indeed, there’s not even a centralized place for banks to know you have loans at other banks.  I found all this out when BNP Paribas sent me a flyer some years ago offering a 2% loan for my business account.  I didn’t need any funds at that time, but I was intrigued by an opportunity to build my relationship and profile with the bank and thought it might make for a good future article.  The truth was that the process was so speedy, there wasn’t enough meat for the article.  I made an appointment (online, using the app), showed up, and after 15 minutes of us getting to know each other and how we ended up in Paris, he asked what the loan was for.  I told him I actually didn’t need a loan, but was more interested in seeing how the process worked.  He nodded and said, “Okay, how about for working capital?”  I nodded and asked if there was any early repayment penalty.  He shook his head.  Ten minutes after that I was out the door, and 48 hours after that, the funds were in my account.  BNP had once again shown me that they were forward-looking, easy to work with, and fast.

As I audited my expenses for 2019 I wondered about Societe Generale and my personal account there, which is what I paid my French taxes out of and was an account I deposited some sources of income into.  Should I really be paying 17€ a month for my personal account there when my account at BNP cost 7€ a month?  But I wanted to give them one final test to confirm my gut instinct: asking for a loan.

There’s no way to make an appointment with your counselor online with SG, so I had to go into my agence.  That’s fine.  I made an appointment in January.  The day of the appointment, he cancelled on me.  Okay, I rescheduled for the next available time, which was two weeks later.  When that day arrived, I brought all the paperwork I might be expected of to get a loan, which includes the “Avis d’impot” (the government document that verifies the veracity of your last filed return) of the last three years, my business tax returns, my business bank accounts, and the usual ID, lease, etc.  Two hours later, he “didn’t have enough information” and told me he would email me for more info.

Of course he didn’t email me.  I had to follow up with him over a two week period and he kept asking for more info before finally saying flatly, “Non.”  I was appalled.  “Tu rigoles,” I began, and told him that BNP had had the exact same info (actually, BNP had asked for less info) and gave me a decision in five minutes, and I had only been banking with them since 2016, whereas I had been with Societe Generale since 2014.  He shrugged and told me that different banks have different practices.

Okay, then I need to close my account,” I replied.  He was nonplussed.  We made an appointment for the following week.  You can guess what happened next.  I arrived only to find out that he was too busy to keep the appointment he had made and I was traveling the following week and he was in conferences the week after, so yes, I had to delay closing my account by three weeks, giving them another month of bank fees.

It took nearly an hour to actually close the account.  I was forced to sign several papers closing both my Livret A (savings account) and the checking account as well as ending the agreements that went with them.  The final action was to transfer the remaining funds at SG into my newly opened additional bank account at BNP (which took all of ten minutes to open, since they just copied all my information over from my existing account). Ridiculous to the end, offering no apology or regret for losing me as a customer, both my counselor and the bank vindicated my decision to fire them.  I’m literally now doubly happy as a BNP client, having two accounts with them and a solid and respectful relationship with my counselor.

Why don’t more French people fire their banks?  That’s part of a larger administrative issue that I’ll address in a future article.

Troubleshooting: Branchless 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.