Can we rely solely on a power of attorney (POA) document to allow an agent to transact on a customer’s account, even if we have had no contact with our customer regarding the POA? If so, is it advisable to have the agent complete an “Agent’s Certification and Acceptance of Authority”?

Yes, your bank may rely solely on a POA document that grants the agent with the authority to conduct financial institution transactions on your customer’s account — provided that the POA document meets the conditions explained below.

A valid Illinois POA document must be signed by your customer, notarized, and witnessed. Also, because this agent is attempting to conduct financial institution transactions for the principal, you should confirm that the POA document includes that power. The Illinois Statutory Short Form Power of Attorney for Property includes the power to execute “financial institution transactions” in line item (b) — provided that item (b) has not been crossed out on this particular POA document.

Notably, the Illinois Power of Attorney Act requires your bank to comply with an agent’s directions that are in accordance with a valid POA document, “and any person who fails to comply arbitrarily or without reasonable cause shall be subject to civil liability for any damages resulting from noncompliance.”

Nevertheless, as an added layer of protection for your bank, you can require your customer’s agent to fill out and sign a “Certification and Acceptance of Authority,” using the form provided in the Illinois Power of Attorney Act. By signing this document, the agent swears under penalty of perjury that (1) the principal (your customer) had the capacity to execute the POA, (2) the principal is alive, (3) the POA has not been revoked, (4) the agent’s powers have not been altered or terminated, and (5) the POA remains in full force and effect.

However, your bank is not required to obtain a Certification and Acceptance of Authority from your customer’s agent, as your bank’s good faith reliance on a valid POA will protect it to the same extent as if it had dealt with the customer directly. Accordingly, whether to require a Certification and Acceptance of Authority is a matter of discretion for your bank.

For resources related to our guidance, please see:

Illinois Power of Attorney Act, 755 ILCS 45/3-3(d) (“11. . . . (NOTE: This power of attorney will not be effective unless it is signed by at least one witness and your signature is notarized, using the form below. The notary may not also sign as a witness.)”)

Illinois Power of Attorney Act, 755 ILCS 45/3-4 (“Explanation of powers granted in the statutory short form power of attorney for property. . . . (b) Financial institution transactions. The agent is authorized to: open, close, continue and control all accounts and deposits in any type of financial institution (which term includes, without limitation, banks, trust companies, savings and building and loan associations, credit unions and brokerage firms); deposit in and withdraw from and write checks on any financial institution account or deposit; and, in general, exercise all powers with respect to financial institution transactions which the principal could if present and under no disability.”)

Illinois Power of Attorney Act, 755 ILCS 45/2-8(d) (“Each person to whom a direction by the named agent in accordance with the terms of the copy of the document purporting to establish an agency is communicated shall comply with that direction, and any person who fails to comply arbitrarily or without reasonable cause shall be subject to civil liability for any damages resulting from noncompliance.”)

Illinois Power of Attorney Act, 755 ILCS 45/2-8(b) (“Upon request, the named agent in a power of attorney shall furnish an Agent’s Certification and Acceptance of Authority to the reliant in substantially the following form: . . .”)

Illinois Power of Attorney Act, 755 ILCS 45/2-8(a) (“Any person who acts in good faith reliance on a copy of a document purporting to establish an agency will be fully protected and released to the same extent as though the reliant had dealt directly with the named principal as a fully-competent person. The named agent shall furnish an affidavit or Agent’s Certification and Acceptance of Authority to the reliant on demand stating that the instrument relied on is a true copy of the agency and that, to the best of the named agent’s knowledge, the named principal is alive and the relevant powers of the named agent have not been altered or terminated; but good faith reliance on a document purporting to establish an agency will protect the reliant without the affidavit or Agent’s Certification and Acceptance of Authority.”)