Who is the customer for purposes of escrow accounts?
An escrow account is an account generally established for the deposit of funds that are to be paid to a specified party on the fulfillment of escrow conditions or returned. If a bank establishes an account in the name of a third party, such as a real estate agent, who is acting as escrow agent, then the banks customer will be the escrow agent. If the bank is the escrow agent, then the person who establishes the account is the banks customer. For example, if the purchaser of real estate directly opens an escrow account and deposits funds to be paid to the seller upon satisfaction of specified conditions, the banks customer will be the purchaser. Further, if a company in formation establishes an escrow account for investors to deposit their subscriptions pending receipt of a required minimum amount, the banks customer will be the company in formation (or if not yet a legal entity, the person opening the account on its behalf). A bank will not be required to look through trust, escrow, or
