That can happen. One of my colleagues had this problem, except he solved it by not being American (he'd not returned a form which they'd sent, asking him to confirm his lack of American citizenship).

I expect the reporting requirements are a burden for small banks, especially ones competing heavily on price rather than offering a full service. I'm not American, but am a similar burden to a bank, and was strongly advised to open an account only with the country's largest bank.

We've seen trouble with this in Canada. My partner's investment manager is basically kicking us out because we're living in the US now.

This was literally in the article.

Yes, sorry I mean that I'd read about this in several other places had assumed that it's become a common occurrence. But nvarsj's comment suggests that it's been no big deal for him. I'm curious if he's personally run into banking problems, or just the pile of tax paperwork.