Question of the Week
Friday, August 24, 2018 8:05 AM

Question:  Are we allowed to refuse acceptance of a Power of Attorney?

Answer:  Controlling law on whether or not your credit union may refuse to allow an agent to act on behalf of your member by use of a power of attorney is a matter of state law.  In Oklahoma, while portions of the Uniform Power of Attorney Act were enacted by legislation, portions that require mandatory acceptance were not.  In Arkansas and Texas, refusal to accept a power of attorney, if done for purposes not permitted by law, could subject the credit union to liability.

That being said, both Arkansas and Texas do permit a credit union to require that an agent sign a certification prior to exercising granted in the document.  This certification is an attestation by that agent that they are acting prudently and as allowed under a properly acknowledged power of attorney under penalty of perjury.  This also places that agent on notice that he/she is the responsible party should those powers be abused or improperly exercised.

Both states also permit, when necessary, for a credit union to require that the agent acquire an opinion of an attorney as to the validity of the power of attorney document and powers that the agent wishes to exercise.  This is a proper when the agent may be attempting to exercise powers the credit union does not believe the agent has, or acting in a way that could be an abuse of a fiduciary duty.  This is done at the agent’s expense. 

Even after these documents are acquired, there are still situations that may permit a credit union to refuse a power of attorney, but be aware that these methods should only be used in circumstances where there is a serious concern over an action by an agent, and not done as a matter of course. 

Powers of attorney are one simple way for ordinary persons to delegate his/her authority over financial affairs, and we should not be unduly obstructing the acceptance of these documents.  Any major issues should be discussed with your preferred legal counsel.

For more guidance on Powers of Attorney, please see the Infosight Manual, or contact Information Central at 512-853-8515.