Florida Broker Practice Exam

Where can a broker open an escrow account?

1. Any bank only outside Florida

2. Only a federal bank

3. Florida bank, savings association, or credit union

4. Any bank that is licensed nationwide

The correct answer is: Florida bank, savings association, or credit union

A broker can open an escrow account in a Florida bank, savings association, or credit union because these institutions are regulated under Florida laws and are familiar with the state's real estate and escrow guidelines. Using a Florida-based institution ensures that the escrow account complies with the state's regulations, as brokers are required to maintain a proper accounting of funds and follow specific rules concerning escrow deposits. While it's true that banks outside of Florida may also offer escrow services, they may not be subject to Florida's regulatory requirements, which could lead to complications in handling real estate transactions within the state. Similarly, federal banks and nationwide institutions are not necessarily required to adhere to Florida's specific regulations unless they have a local branch or are otherwise licensed in the state. Therefore, opening an escrow account in a Florida bank, savings association, or credit union ensures alignment with state laws and provides a layer of consumer protection by keeping funds within local regulatory oversight.