From your question it seems that you're not entirely sure what these laws are. Let me clear this out for you and everyone else:
What is FATCA
Foreign Accounts Tax Compliance Act. There are many resources about this law, but I suggest starting with these:
- IRS FATCA page.
- Wikipedia FATCA article.
In short, this act includes various provisions that add additional reporting requirements for Americans with assets abroad, and about Americans with accounts abroad.
Reporting Requirements for Individuals
Individual Americans (citizens and tax residents) were already required to file a yearly report about their foreign accounts to the Department of Treasury. This is called "Foreign Bank Accounts Report" (FBAR), and is filed using Form 114 on the FinCEN web site. You're required to file this form for every year during which your total (aggregate) worth of all of your foreign accounts exceeded $10000 on at least one day. This includes, by the way, any account you might have - including savings, checking, investment, pensions of any kind (including "managerial insurance" which is essentially a pension savings account), your educational funds, etc etc.
So What's New?
FATCA adds additional reporting requirements for individuals. In addition to FBAR, you're now required to report your foreign accounts and specified assets as part of your tax return on form 8938. The threshold requirements for form 8938 are different from FBAR, so you may be required to file FBAR - but not required to file form 8938. For Americans living abroad the thresholds are much higher than for Americans living in the US. Also, the reports include slightly different information.
But in general - there's double reporting to different agencies of the Department of Treasury. FBAR goes to the FinCEN, and form 8938 goes to the IRS - but both include roughly the same things.
This applies for all US citizens/tax residents, and the source of your income doesn't matter for this requirement.
Reporting Requirements for Banks
The more important portion of FATCA is the imposition of reporting requirement about Americans on foreign financial institutions. Foreign banks are now required to report about any American with an account(s) worth $50000 or more, and if they don't - they face severe limitations on their activity in the US (essentially flat 30% tax on their US transactions). This requires the banks to break many local laws and as such is a problematic requirement. Many foreign banks chose to close their doors for American customers instead.
This is in light of massive tax evasion of the American rich through the European (and other) bank accounts using the local secrecy laws to shield their income from the IRS eyes. See stories about UBS and other Swiss banks getting in trouble with the American government for that. The result is that the American citizens (expats) are now having troubles finding a bank to open an account at in many Countries (including Israel - Bank Hapoalim, for example, closed/limited accounts of many Israelis who were stupid enough to tell the clerk that they're American citizens/green card holders).