What can anyone tell me about this change to POA. It sounds like it is good news and extra protection to the bank when accepting a POA but I heard of one bank that is no longer accepting POA's. From what I am reading the legislation expands protection for third parties should a POA end up being invalid and provides for a third party to take measures to verify the authenticity of the POA on the front end to better protect the institution, stakeholders and consumers.
Does this mean that we MUST take these measures? Is this good news or bad news? Thanks!!

We're still sorting through these questions ourselves, but overall this is a positive change for banks.



I wouldn't quite describe the expanded provisions as verifying the authenticity of the POA, but they at least provide opportinuty for banks (and other parties) to address some of the most common concerns that would cause us to consider rejecting a POA.

That said, I think the bank that has decided to no longer accept POAs is stepping on a landmine. Neither the old law nor the new allow us such broad authority to reject all POAs wholesale. In fact, both say that we must accept POAs unless the certain delineated conditions exist.

Forgot to include in my initial response:

Here's the PA Banker piece on the POA changes.

Does anything in the new rule pertain to pre-existing POAs that we have on file right now? Or only those that come in the door from this point forward?

the amendments generally apply to powers of attorney executed both before, on or after their effective date, except that the expanded immunities provided for the good faith acceptance of instructions from agents without actual knowledge of any deficiencies in powers of attorney or the claimed authority of agents apply retroactively.

POAs that you have on file prior to enactment date should fall under the Good Faith Acceptance immunity.

Thanks for your feedback!

Back to this subject again....
Is anyone changing what they are doing as far as taking Power of Attorney's? I am being asked to come up with procedures and I really don't know where to start.

We already have a centralized review process for accepting POAs. We're updating our review to specifically determine if POAs executed after the effective date contain the requisite witnesses, contain language that addresses the powers that must be explicitly stated, etc.

Kathy,

My additional two-cents:

The amendments also establish a procedure to be followed if the POA recipient questions the POA validity or whether the Agent has the authority to do what they want. If there is a question about the validity of the POA, or the Agent’s authority to act as they propose to act (ie., closing accounts, changing owners, changing beneficiaries), the person to whom the POA is presented may request an opinion of counsel, or a Certification of Facts concerning the POA before accepting it. I believe that is a great tool, and have threatened to request a legal Opinion a couple of times. You might include that in your procedures.

If you have in-house bank POA forms, those need revised. Check with any vendors you use.

Just a thought..