Just to be clear - can a person who is P.O.A. on a customers account deposit checks payable to that customers directly into his own personal account?

Can a person make these deposits? Yes, if you let them.

SHOULD a person make these deposits? You should carefully read the power of attorney. Unless it specifically grants the attonrey-in-fact the authority to gift funds or change ownership of funds, this practice puts the bank on notice of a breach of fiduciary duty which could result in the bank being held liable for the amount of the checks deposited.

If you're not sure if the power of attorney document grants this authority, ask bank council to review it.

Good advice. I would say your bank is aware of the breach of fiduciary duty; you could and should be held liable for allowing it to happen.

Some states have a statute which requires an attorney-in-fact to keep the principal's property separate from their own. If your state has such a statute, then your institution risks being liable for any applicable statutory penalties in permitting the attorney-in-fact to violate the statute. You may want to check your state's laws on powers of attorney to see if there are any statutory prohibitions against what the attorney-in-fact is seeking to do with the principal's check. It is a lot easier to tell the attorney-in-fact NO, when you can point to a statute which expressly states the requested act can't be done rather than argue general fiduciary law principles (which Brian and Ken correctly pointed out to you).