Opinion ID: 2195589
Heading Depth: 1
Heading Rank: 3

Heading: Multiple Party Account

Text: The MPAA defines an account to include traditional banking accounts, certificates of deposit, share accounts, and other like arrangements. While a brokerage account is not one of the enumerated services of a financial institution in that it is not a checking or savings account, we believe that a brokerage account is encompassed within the purview of share accounts, and other like arrangements. Share accounts are commonly a form of investment in savings and loans and in credit unions. They are essentially a hybrid security. Share accounts are often transferable by assignment and, because the bulk of the funds of a savings and loan are invested in mortgages, these shares resemble an investment pool. Share account holders retain all rights of corporate stockholders and dividends on share accounts are treated like interest on bank accounts for purposes of deductibility.... Paulsen v. Commissioner of Internal Revenue, 469 U.S. 131, 149, 105 S.Ct. 627, 83 L.Ed.2d 540 (1985) (O'Conner, J. dissenting). See also Porter v. Aetna Casualty & Surety Co., 370 U.S. 159, 82 S.Ct. 1231, 8 L.Ed.2d 407 (1962) (Douglas, J. concurring). We believe that the similarities between multi-service brokerage accounts and share accounts bring them, at a minimum, within the authority of other like arrangements. This conclusion is supported by the decision of this Court in Balazick v. Ireton, 518 Pa. 127, 541 A.2d 1130 (1988), in which the Balazicks created a separate joint account with each of their five children. Each of the accounts was in the form of a repurchase agreement in which the bank acquires government securities and sells an interest in these securities to its individual customers. Id. at 1130 n. 1. Ownership of the securities is not transferred to the customer, and the bank does not create a deposit contract, but issues a receipt indicating the ownership of the interest [that] has been created.... Id. This Court concluded that the repurchase agreement was not unlike a share account and that the MPAA applied. A brokerage account, such as the Active Assets Account of Libros, is similar in form and function to the repurchase agreement in Balazick. The General Assembly broadly defined account and we see little difference between a share account, repurchase agreement, and a brokerage account. [3]