That's not quite true. If you _return_ your green card ("abandon it"), you no longer have to pay taxes. This makes sense as a parallel to being a US citizen, who would pay taxes even if they lived abroad.
I'm not saying it's right, but we need to be accurate.
[1] In this context, including foreign businesses that file a U.S. tax return. [2] Note that for FATCA purposes, if a person is a US taxpayer for any portion of the year, they are subject to FATCA compliance purposes for that tax year no matter how much of that year was actually spent as a US taxpayer. However, if they are not a US taxpayer at the end of the year, they would not be subject to FATCA compliance for the following year.
FATCA does not apply once you are no longer a US taxpayer. Moreover, the FATCA regime has been copied by so many other countries (including the EU) that there is now a global version of FATCA called CRS (and the procedural system for implementing CRS is known as AEOI).
FATCA is now considered the least burdensome implementation of CRS, which has been implemented by all OECD countries, China, India, and Brazil.
If a bank is turning you down because you answered "YES" to the FATCA question, the problem isn't FATCA. The bank is trying to avoid an audit and it's a huge red flag not to do business with them.
Banks are run by people and they are private businesses. Humans don't follow laws like computers follow instruction, we are flawed creatures. Businesses will mitigate risks wherever possible, and refuse to work with customers who carry added risk all the time.
While in theory this shouldn't be causing people trouble and preventing people from getting locked out of the banking system or forcing them into unfair agreements, in reality, it is.
It turns out government regulation has unintended consequences. Just because it's "wrong" for them to interpret the regulation in this way, doesn't change the fact that many many established, legitimate banks are doing it "wrong." Nor does it help the people suffering the consequences to point your finger back at the wording of the regulation and say "Ackshually..."
If a foreign bank won't open an account for you because you were once American, the problem is that the bank has something to hide. Full stop. End of story.