Due to a combination of factors, including increased enforcement of U.S. anti-money laundering and trade sanction laws and fear of securities law violations, a number of U.S. financial institutions have closed out existing accounts held by U.S. citizens and residents living abroad or are declining to open new accounts for such individuals. In addition, the cost to foreign financial institutions of complying with Foreign Account Tax Compliance Act (FATCA) requirements and potential liability of those institutions for FATCA violations have made it more difficult for foreign-based U.S. individuals to open accounts with foreign financial institutions, even some that are registered with the IRS for FATCA purposes.

However, the State Department Federal Credit Union does permit U.S. citizens and permanent residents that live outside the United States to open accounts, even if those individuals do not work for, and never have worked for, the State Department or any other U.S. government agency, and even if the individual does not provide any U.S. address. Accounts can be opened online, using a scanned copy of the individual’s passport and recent utility bill to establish eligibility. The credit union offers a full range of financial services from credit cards to home mortgages. Needless to say, it is fully familiar with U.S. tax reporting and "know your customer" requirements associated with financial accounts held by Americans living abroad.