Section 31a.6. Funds awaiting investment or distribution

(a) General. Funds held in a fiduciary capacity by an association awaiting investment or distribution shall not be held uninvested or undistributed any longer than is reasonable for the proper management of the account.

(b) Use by association in regular business.

(1) Funds held in trust by an association, including managing agency accounts, awaiting investment or distribution may, unless prohibited by the instrument creating the trust, be deposited in another department of the association if the association first sets aside under control of the trust department as collateral security one of the following:

(i) Direct obligations of the United States, the Commonwealth or other obligations fully guaranteed by the United States as to principal and interest.

(ii) Other readily marketable securities approved by the Department.

(2) Collateral securities or securities substituted as collateral shall at all times be at least equal in market value to the amount of trust funds so deposited, but such security shall not be required to the extent that the funds deposited are insured by the Federal Savings and Loan Insurance Corporation or the Pennsylvania Savings Association Insurance Corporation.

(3) Any funds held by an association as fiduciary awaiting investment or distribution and deposited in another department of the association shall be made productive.