Topic: Power of Attorney
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Are we required to accept a power of attorney (POA) that lists someone as an agent who we believe is dishonest? We are concerned that accepting the POA will open us up to liability, as this individual has attempted to pass fraudulent checks and has been involved in numerous scams in the past.
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In our view, the risk of refusing to accept a POA generally is higher than the risk of accepting a POA that turns out to be invalid, unless you have reasonable cause to refuse to comply with the agent’s direction or have actual knowledge that the agency is invalid. The Illinois Power of Attorney Act…
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A customer has multiple accounts with our bank. The customer gave their daughter power of attorney (POA) with full rights. One of the customer’s accounts was retitled to reflect this, but the other account was not. Can the daughter access the other account even though she is not listed in the account title as having POA? Is a POA agreement specific to the account number, or does it apply to the customer and their entire portfolio?
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We believe the daughter may access all of your customer’s accounts — provided that she has been granted a valid POA for property using the Illinois Statutory Short Form Power of Attorney for Property, and the “financial institution transactions” category of powers has not been stricken out. In Illinois, the Statutory Short Form Power of…
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A customer is claiming that his brother initiated unauthorized electronic fund transfers (EFTs) from his account. We learned through our investigation that our customer executed a power of attorney (POA) for property naming his brother as agent a few years ago for purposes of selling a home they co-owned. We do not have a copy of the POA, but we have a written statement from the customer stating that he gave his brother a POA for property. He does not know whether the POA had a termination date. Can we conclude no error occurred based on the customer’s written statement? Or do we need to have the POA on file? If the transactions are considered unauthorized, can we take legal action against the brother?
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Completing Your Regulation E Error Investigation Based on the information you have so far, we do not believe you have satisfied your institution’s burden of proof to conclude that no error occurred. You may be able to complete your investigation and make a conclusion regarding whether an error occurred without obtaining a copy of the…
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Can we accept a Power of Attorney (POA) from another state? A customer would like to open an account for his mother for whom he has a POA that was signed several years ago in Ohio, where she resides.
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Yes, we believe you may accept a POA from another state, but we recommend reviewing its terms to confirm that it authorizes the agent to open a bank account on behalf of the principal and confirming that the POA is still in effect. The Illinois Power of Attorney Act provides that a POA executed in…
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The Illinois Statutory Short Form Power of Attorney (POA) for Property states, “I . . . hereby revoke all prior powers of attorney for property executed by me and appoint: . . .” Can a customer strike out that language so that they can enter into an additional POA naming a second agent? One of our customers wants to retain their current agent but also wants to add a new agent, as the first agent is currently not feeling up to the responsibility. The customer’s attorney stated that striking through this phrase in the statutory short form is how two agents can act at the same time without naming co-agents as prohibited by the statutory short form. Is this the correct procedure? If this is correct, will it allow both agents to act and can the bank be held responsible if one of the agents acts in a way that the other disagrees with?
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We believe that it is possible to add a second power of attorney for property using a non-statutory POA (that is, a POA that does not exactly match the form supplied in the Illinois Power of Attorney Act). We note that it would be inappropriate for your institution to offer legal advice to your customer…
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We have a customer who wants to add an agent under a power of attorney to an already established revocable trust account. Does Illinois allow this?
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Yes, Illinois law does allow an agent under a power of attorney (POA) to exercise a trust settlor’s powers “with respect to revocation, amendment, or distribution of trust property,” provided that the power of attorney expressly authorizes the agent to exercise such powers, and provided that the trust instrument does not prohibit the agent from…
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We are being asked to provide a medallion stamp on a document for a non-customer whose power of attorney (POA) agent banks with us. We would be guaranteeing the POA agent’s signature; however, we are not familiar with the situation or the non-customer. What is the best practice in this situation? Should we guarantee the signature of a customer who is acting as an agent for a non-customer?
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We recommend reviewing your medallion program administrator’s guidelines regarding the information you need to obtain in order to provide a medallion signature guarantee — the exact information required will depend on the transaction for which you are guaranteeing your customer’s signature. If you are unable to obtain this information, we recommend against guaranteeing your customer’s…
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A customer presented an Illinois Statutory Short Form Power of Attorney (POA) for his mother. The POA gives the customer the power to make financial institution transactions, and he has asked to put his name on his mother’s account as a second owner. Is he authorized to do this?
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Yes, we believe an agent with a valid POA that has been granted the authority to make financial institution transactions may add themselves as a joint owner on the principal’s account. The Illinois Statutory Short Form Power of Attorney for Property includes the power to make “financial institution transactions” in line item (b) — provided…
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Can an agent with a power of attorney (POA) use online banking to transact on a customer’s account?
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Yes, we believe that an agent with a valid POA (that is signed by your customer, notarized, and witnessed) may use online banking to transact on a customer’s account, but only if the POA authorizes the agent to execute financial institution transactions. Additionally, your bank may wish to require the agent to produce certain information…