Are escrow accounts covered under the Temporary Liquidity Guarantee Program? What is the amount of coverage on the title companys account at the bank if a depository institution opts out?
Escrow accounts are fully covered under the program if they are in noninterest-bearing transaction deposit accounts. If a bank opts out of the transaction account guarantee component of the program, coverage of a title company’s account would be $250,000, unless the account meets the requirements for pass-through coverage. To receive pass-through coverage, (1) the deposit account records generally must indicate the account’s custodial or fiduciary nature and (2) the details of the relationship and the interests of other parties in the account must be ascertainable from the deposit account records or from records maintained in good faith and in the regular course of business by the depositor or by some person or entity that maintains such records for the depositor. In its deposit insurance coverage regulations, the FDIC has indicated that an account held by an escrow agent or title company may by its terms indicate the existence of a fiduciary relationship. If the account receives pass-
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