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Texas DMV Working on Changes to Proper POA Form for Private Vehicle Sales Effective This Summer
Wednesday, May 4, 2016 6:55 AM

The Texas Department of Motor Vehicles (DMV) is preparing to release a revised bulletin concerning the use of power of attorney (POA) forms in the sale of motor vehicles. For the vast majority of transactions, credit unions in Texas (both state and federal charters) should be using power of attorney form VTR-271-A (and not form VTR-271) when a vehicle title is currently held by a lienholder.

In December of 2015, the DMV issued “Registration and Title Bulletin #010-15, Reinforcement on Appropriate Use of Powers of Attorney by Dealers.” The bulletin resulted in confusion because it leads one to believe that the use of Form VTR-271-A is directed solely to auto dealers. In fact, as the DMV explains, the restrictions apply to situations involving private sales of vehicles as well.

To date, many financial institutions are inappropriately using power of attorney form VTR-271 to obtain the power to act as an agent for both the seller and buyer in private sales of a vehicle. The DMV clarified that the use of form VTR-271 in relation to any sale requiring an odometer disclosure is improper, and form VTR-271-A should be used instead. Beginning this summer, credit unions assisting in private sales will not be able to use VTR-271 (unless the transaction is exempt from the odometer disclosure requirement). 

Credit unions will not be able to serve as the POA agent when using VTR 271-A. The use of inappropriate forms will result in the local tax office rejecting the title transfer request (and notation of the credit union lien).

The Law

Federal law and regulations require transferors of motor vehicles to make written disclosures to transferees concerning the odometer mileage and its accuracy. This requirement applies to vehicles that are self-propelled, less than 10 years old, and weigh less than 16,000 pounds.

In addition, federal law requires that the disclosure be made either on the title itself or on a secure power of attorney. A secure POA is one which deters and detects counterfeiting and/or unauthorized reproduction and allows alterations to be visible to the naked eye. If the title is held by a lienholder, the law permits the transferor to give a POA to his transferee for the purpose of mileage disclosure. The law limits the agent to being solely the transferee/buyer (not a financial institution).

When the title is held by a lienholder (or is lost), federal law permits the seller to grant a POA to the buyer for the purpose of the mileage disclosure. This is done via form VTR-271-A. The law does not authorize a financial institution to serve as a POA agent for the purposes of the mileage disclosure; only the transferee/buyer may serve as the POA agent.

Form VTR-271 may be used only for transactions that are exempt from the odometer disclosure requirement (such as for cars that are over 10 years old).

Going Forward

Credit unions will be required to use the form VTR-271-A in connection with the private sales of a vehicle where the title is held by another lienholder. Under the current status of the law, the credit union will not be able to serve as a POA agent, preventing the credit union from acting as a POA agent to fix errors on related paperwork. This will require credit unions to amend their current lending processes and possibly delay sending payoff funds, as it will likely be very difficult to obtain cooperation from a seller to fix paperwork problems after they have already received payment. The new process may require both the seller and buyer to go into a physical branch, perhaps multiple times. As a reminder, this process will likely be substantially slower and may cause the transaction to exceed the 30-day requirement to transfer title. 

Form VTR-271-A is only available at Texas DMV Regional Service Centers (RSC) and is not available at county tax assessor-collector offices. A list of RSCs is located on the department’s website at Please contact your local Texas DMV RSC if you need Form VTR-271-A. There is currently no cost associated with obtaining a supply of these numbered forms.

For more information, please contact Cornerstone Credit Union League SVP Regulatory Compliance Counsel Suzanne Yashewski at 512-853-8516 or