Q: How can I be Certain an Agent has Authority to Act under a Power of Attorney Agreement?

A: WBA continues to field a variety of questions about when and how an agent may act under a Power of Attorney (POA) agreement. This Q&A is dedicated to that question generally.

A POA agreement is a legal document whereby one party (the principal) designates authority to act on their behalf to another party (the agent). Always ensure that any POA agreement bank receives relates to powers over finances. Take a copy of and review any POA agreement related to finances the bank may receive for its customers. Customers may bring in the model agreement provided by Wisconsin in accordance with Chapter 244 or one drafted by an attorney. Both are equally valid methods, but may contain different terms and provisions. Confirm whether the POA agreement is: durable, non-durable, or springing. This refers to when the agent may act: either while the principal is incapacitated, cease while the principal is incapacitated, or after a predetermined event.

All of the agent’s authority to act comes from what is written within the POA agreement. Ideally, the POA agreement is clear and specific. Sometimes, it may not be. For example, the POA agreement may refer to “general powers of finances.” Wisconsin Statute Section 244.41 indicates which authority is covered by a general grant and those powers that require a specific grant. You will want to review that portion of the statute to assist in determining the agent’s authority. In any case, carefully review the document, and consider obtaining an opinion from the bank’s own counsel.

Special rules exist for agency on joint deposit accounts. All parties to the joint account must designate the agent to have authority on the account for the agency to be valid. However, only one party needs to revoke that authority in order for the revocation to be effective. 

Generally, agents may not appoint other agents, and generally may not conduct estate planning activities on behalf of the principle. Look for specific language granting this authority if an agent wishes to act in this way and consider obtaining an opinion from the bank’s own counsel.

A POA agreement for personal finances of an individual doesn’t automatically mean that an agent can act with respect to any fiduciary authority the ward has. For example, while a trustee may have the authority to appoint an agent over a trust, in order for the trustee to appoint an agent over a trust they should do so in their capacity as a trustee rather than as an individual.

As a final reminder, POA agreements for health care do not apply to deposit accounts. They relate to health care decisions rather than finances.

As always, if you have any questions on POA matters or other compliance-related concerns, call the WBA legal hotline at 608-441-1200 or email us at wbalegal@wisbank.com.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.

By, Scott Birrenkott

This month's Special Focus features an article on a recent UCC filing incident. Regulatory Spotlight includes CFPB's final payday loans rule and amendments to Regulation C. The Senate striking down CFPB's arbitration rule, and FFIEC announcing the availability of HMDA data are among the Compliance Notes items.

Download the Compliance Journal.

By, Ally Bates

The Wisconsin Bankers Association offers for your use the following consumer education column. Your bank is free to use this as a community column in your local newspaper, a letter to the editor, a press release or in any other way you see fit. The purpose is to give our members an easy-to-use tool for promoting the banking industry to Wisconsin's communities.

Identity theft is on the top of many consumers' minds these days, with new data breaches announced seemingly weekly. As masses of Americans turn to credit monitoring, fraud alerts, and other solutions to prevent their identities from being stolen, one group sometimes slips through the cracks: children. Parents: don't forget that your child has a social security number, so their identity could be stolen and used to take out fraudulent loans that could damage their ability to buy a car, get student loans, rent an apartment, or even get a job in the future. Below are some steps to consider to help protect your children from ID theft: 

Watch for red flags.
First, keep an eye out for common signs that your child's identity has been used to obtain credit. These include an influx of mailed credit card and/or loan offers addressed to your child, a notice from the IRS that your child didn't pay income tax or was claimed as a dependent, and collections calls for bills addressed to your child. When your child gets older, being denied a bank account, driver's license, or government benefits (such as Medicaid) are also indications that their identity may have been stolen. 

Check your child's credit report.
The next step to take is similar to what you would do to protect your own identity: check their credit report. It's a bit more complex when the credit report you're requesting is your child's (versus your own), but it is an important step. Contact the major credit bureaus (Equifax, Experian, and TransUnion) to find out the specific documentation they require. You'll likely need to mail in copies of your child's birth certificate and/or their Social Security card, as well as a copy of your own ID. Keep in mind that your child may not have a credit report-and that's a good thing! It means your child's identity has not been used by criminals to obtain credit in their name. 

Consider a credit freeze.
If you find that your child has a credit report, consider placing a freeze on it. This is especially important to consider if your child's identity has been stolen, since it will help prevent future instances of their information being used to obtain credit. Wisconsin's Child Credit Protection Act allows parents and legal guardians to place a freeze on their child's credit record. By freezing their credit with each of the major credit bureaus, you will prevent criminals from taking out credit using your child's identity. Each credit bureau has a different process for freezing credit, so contact them to find out the steps if you are interest in a credit freeze for your child(ren). Keep in mind, the bureaus charge a fee to freeze and unfreeze credit, so you'll want to consider how close your child is to legitimate credit requests (such as student loans or a first credit card) before taking this step. 

If you suspect your child's identity has been stolen, visit www.identitytheft.gov for step-by-step guidance on what to do next. 

An archive of Consumer Columns is available online at www.wisbank.com/ConsumerColumns.

By, Amber Seitz