A Useful Checklist When Credit Unions are Presented With a Power of Attorney
Credit unions have always found it necessary to review, analyze and, where appropriate, accept a power of attorney that has been signed and presented by a member or on behalf of a member.
However, there are increasing situations involving elder abuse, fraud and forgery and many credit unions are being more cautious as they act upon a power of attorney. Some have an attorney review and opine on each and every power of attorney. Others will seek legal consultation only if the situation, the form or the language of the power of attorney is somewhat unusual.
An increasing number of state laws are providing protection to financial institutions that rely upon powers of attorney when certain provisions are included in the power of attorney.
The following checklist may be of assistance to a credit union that is presented with a power of attorney.
Power of Attorney Checklist
This checklist is intended to provide credit union clients with a reference for use in determining whether to accept a PoA. In making such a determination, the following items should be taken into consideration:
(a) Is the PoA in writing (including typed writings) and signed by the principal? Does the signature of the principal match the principal/member's signature on such member's account card?
(b) Is the PoA dated?
(c) Is the PoA properly notarized by a notary public?
2. Identification of Agent
(a) Is the individual presenting and attempting to utilize the PoA actually the attorney-in-fact named as agent in the PoA?
(b) Does the agent have a valid government-issued identification card to establish and prove his or her identity?
(a) What is the scope of the PoA – general durable PoA or a limited PoA – and what are the scope of the powers and authority granted to the attorney-in-fact?
(b) Is the attorney-in-fact proposing to take actions on behalf of the principal that are authorized in the PoA, or are the proposed actions outside the scope of authority granted in the PoA?
(i) Specifically, does the PoA grant authority to the agent to access financial institution accounts and transact business with respect to such accounts?
4. Continuing Validity
(a) Does the credit union have knowledge of forgery, invalidity, termination, death of the member/principal or other revocation of the PoA?
(b) Does the credit union have knowledge of events or circumstances that, by the terms of the PoA, would terminate or revoke the authority granted in the PoA (for example, a divorce)?
(a) If the credit union, after answering the above questions, has any questions regarding validity of a PoA, consider:
(i) Requesting an attorney review of the PoA; and/or
(ii) Requiring the agent/attorney-in-fact to execute an affidavit/certification attesting to the continuing validity of and non-revocation or termination of the PoA; and/or
(iii) Contacting the member/principal to inquire into validity of PoA and its continuing in force and effect as a safety precaution to the member.
(a) Always retain a copy of the PoA in the member/principal's file;
(b) Always make a copy of the government issued identification card presented by the agent and retain along with the PoA in the member/principal's file;
(c) If an attorney review is requested and received, always maintain the attorney's correspondence in the member/principal's file;
(d) If the member is contacted to verify the validity of the PoA, document the contact (whether a memo commemorating a phone conversation or a printed email exchange) and maintain this correspondence in the member/principal's file.
In addition, an agent's certification/affidavit pursuant to which the agent attests to the document's continuing validity is always a good idea for the credit union if there are any questions concerning the validity of the instrument.
E. Andrew Keeney is a Norfolk, Va.-based credit union attorney with more than 35 years of experience.