Safety of trust funds
- Stocks, bonds and other assets that a bank trust division holds for its customers are, by federal regulation, kept separate and distinct from the other assets of the bank. They are owned by the trust or the customer. The bank cannot use, pledge or sell the assets for its own benefit.
- Securities in a trust and agency accounts are not assets of the bank and therefore, cannot be and are not insured by the FDIC. Even if a bank were to fail, the trust assets would not be affected. Government authorities would simply charter the trust division to operate as an independent trust company or arrange to have a successor trustee appointed.
- Trust Division employees are bonded to protect customers from losses caused by theft, fraud or forgery. There are also stringent regulations that govern how trust accounts are administered. Trust divisions are also subject to regular audits by both independent and internal auditors as well as by federal and state bank examiners.
