Are there any issues with holding a security deposit in an account of a financial institution that is headquartered in another state?  We use online deposit capture with a large bank that does not have a brick and mortar presence in North Carolina.  Thanks!

@Matthew Heiser :

This link provides NC Landlord and Tenant laws relating to the obligations and duties of landlords and tenants including the Tenant Security Deposit Act, which mandates the manner in which residential tenant security deposits are handled. 

Refer to Article 6. Tenant Security Deposit Act:

 42-50. Deposits from the tenant.

Security deposits from the tenant in residential dwelling units shall be deposited in a trust account with a licensed and federally insured depository institution or a trust institution authorized to do business in this State, or the landlord may, at the landlord's option, furnish a bond from an insurance company licensed to do business in North Carolina. The security deposits from the tenant may be held in a trust account outside of the State of North Carolina only if the landlord provides the tenant with an adequate bond in the amount of the deposits. The landlord or the landlord's agent shall notify the tenant within 30 days after the beginning of the lease term of the name and address of the bank or institution where the tenant's deposit is currently located or the name of the insurance company providing the bond. (1977, c. 914, s. 1; 2015-93, s. 2; 2017-25, s. 2(a).)

Further, according to this recent BIC Update - Handling Trust Monies:

License Law no longer requires brokers to open their brokerage trust accounts “in an insured bank or savings and loan in North Carolina;” rather, the federally insured depository institution must be authorized to do business in North Carolina and agree to make its records available to the Commission upon request.

Looks like you can hold security deposits in a trust account outside of the State of North Carolina only if you provide the tenant with an adequate bond in the amount of the deposits. Then, the landlord or the landlord's agent shall notify the tenant within 30 days after the beginning of the lease term of the name and address of the bank or institution where the tenant's deposit is currently located or the name of the insurance company providing the bond.

I don't know about NC but TN requires it to be held in a bank that has a presence in TN. I wonder how these laws will apply as b&m become less fashionable and online becomes everything. In any case, there's a ton of options for NC so I would just do that. 

Thanks for the help, everyone!