No, we do not recommend allowing an agent under a power of attorney (POA) to exercise an authorized signer’s powers over a business account, where that agent is not named as an authorized signer by the business in a corporate resolution or other appropriate document. Because the business customer’s sole authorized signer for its account is confined to a nursing home, we recommend that you advise the business customer to appoint a new authorized signer.

The Illinois Statutory Short Form Power of Attorney for Property permits an agent acting under a POA to “exercise all powers with respect to financial institution transactions which the principal could if present and under no disability.” However, we do not recommend extending a POA agent’s powers to accounts over which the principal has authority only as an authorized signer. If your bank accepts this POA agent’s signature as an endorsement on the business’s checks, the endorsements could be considered unauthorized, exposing your bank to potential liability for the agent’s misconduct.

We are aware of some Illinois court decisions that absolve a bank from liability for an authorized signer’s misconduct, but we do not believe that courts would extend such protection when a POA agent is acting on behalf of an authorized signer. And, as a practical matter, your bank would be unable to verify the POA agent’s signature by comparing it to the signature of the authorized signer on your signature card.

For all of these reasons, we do not recommend treating the POA agent as an authorized signer for the business account.

For resources related to our guidance, please see:

• Illinois Power of Attorney Act, 755 ILCS 45/3-4(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. . . .”)

• Mutual Serv. Cas. Ins. Co. v. Elizabeth State Bank, 265 F.3d 601, 625 (7th Cir. 2001) (“The commercial deposit agreement that governed Jo Daviess’ operating account with the bank permitted only authorized signers to withdraw funds from that account. Hemmen, of course, was not an authorized signer; so had the bank, for example, negotiated checks on the operating account that Hemmen had signed, there would be no question that it would be liable for breach of the deposit agreement.”)