Distinction between Trustee and Custodian

[BonoConsilio]

For purposes of IRAs, is there any real distinction between trustee or custodian?

1. A "bank" may be either a trustee of an IRA under IRC section 408(a)(2) or the "bank" may be a custodian of an IRA under section 408(h).

2. A "person" (a non-bank, i.e. brokerage firm, insurance company, etc.) may apply to the IRS to be a trustee of an IRA under IRC section 408(a)(2) or a custodian of an IRA under section 408(h).

3. IRC section 408(h) treats a custodial IRA as an IRA trust, and the IRA custodian as an IRA trustee.

4. The "Specific Instructions" for both form 5303 (IRA Trust) and 5305-A (Custodial IRA) both state that: "Article VIII and any that follow it may incorporate additional provisions that are agreed to by the grantor/depositor and trustee/custodian to complete the agreement. They may include, for example, definitions, investment powers, voting rights, exculpatory provisions, amendment and termination, removal of the trustee/custodian, trustee/custodian’s fees, state law requirements, beginning date of distributions, accepting only cash, treatment of excess contributions, prohibited transactions with the grantor/depositor, etc. "

With that in mind, why would a "bank" set up a Custodial IRA, for example, for an IRA CD, and in the trust/investment department of the bank set up its accounts as IRA Trusts?

Given the Specific Instructions regarding Article VIII, do I understand correctly that either an IRA Trust or a Custodial IRA may be used for a self-directed IRA or a managed IRA?

For IRA purposes, do the terms "trust/trustee" or "custody/custodian" carry much of any of the conventional meanings as they are understood beyond there usage in the IRC?

If there is a meaningful distinction, in what situation might a brokerage firm prefer to apply to become an IRA trustee instead of an IRA custodian?