Under RELA, a Pennsylvania broker, Allen, maintains an escrow account at First National Bank. The bank fails and is taken over by the FDIC. Allen holds $300,000 in client escrow funds. Allen is concerned about FDIC coverage. Which statement is MOST accurate?
Correct Answer
D) FDIC coverage applies to escrow accounts on a pass-through basis, meaning each client's deposits may be insured separately up to the FDIC limit
Under FDIC rules, escrow accounts qualify for pass-through insurance coverage. Each individual client whose funds are in the account may receive separate FDIC coverage up to $250,000, provided proper records identify each client's interest in the account.
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More Pa Rela Brokerage Rules Questions
Under RELA, a Pennsylvania brokerage must ensure that all licensees affiliated with the brokerage have completed what requirement before practicing real estate?
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Under RELA, what is the primary purpose of requiring Pennsylvania brokers to maintain escrow accounts?
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During a monthly reconciliation, a Pennsylvania broker discovers that her escrow account balance exceeds the total of all client ledger balances by $2,000. Under RELA, what is the broker's required course of action?