I ran into this problem. For me it was selecting the second option automatically because of an option that was loaded incorrectly when I had Turbo Tax import a 1099-INT directly from a financial institution (instead of entering it myself). Go to your 1099-INT and double check that the "FATCA filing requirement" was input correctly by the system. In my experience it was checked when it should not have been checked; and after I fixed this I was able to correctly tell intuit that i did not have any foreign assets which finally allowed me to file my taxes for free.
