Q&A: Here’s a question that a Wisconsin credit union recently asked The League’s Legal Affairs team, along with our answer. Do you have a compliance question? Contact The League’s Compliance Hotline at (800) 242-0833 or email.
Q. Our member signed a power of attorney (POA) back in 2011, and it’s just being presented to us now. Is it safe to accept a POA that’s a decade old?
A. Under Wisconsin law (Wis. Stats. § 244.20), a credit union can refuse to accept an acknowledged / notarized POA within 10 days after it is presented, but only if it acts in good faith.
It is not good faith if the credit union refuses to accept an acknowledged POA because the document is “too old.” POAs do not automatically become invalid with the passage of time.
Instead, if the credit union is worried that a POA might no longer be valid, it should ask the agent to sign the “Agent’s Certification as to the Validity of Power of Attorney for Finances and Property and Agent’s Authority” (WCUL #81018 Sample),(Purchase #81018 here). That form includes language whereby the agent verifies that the POA has not been terminated:
The principal is alive and has not revoked the power of attorney or my authority to act under the power of attorney, and the power of attorney and my authority to act under the power of attorney have not terminated.
What does “good faith” mean? The League’s ii Release No. 0168 explains that Wisconsin law allows the credit union to reject a POA if:
- The credit union “is not otherwise required to engage in a transaction with the principal in the same circumstances”;
- The agent wants to do something that is “inconsistent with federal or state law”;
- The credit union has actual knowledge that the POA has been revoked or is terminated (for example, because the POA principal has died);
- A request for an Agent’s Certification, translation or attorney’s opinion has been refused;
- The credit union believes that the POA is invalid;
- The credit union believes that the POA does not authorize what the agent is asking to do;
- The credit union believes that the person asking to make the transaction is not the agent named in the POA;
- The credit union knows of a pending case asking a court to interpret the POA;
- The credit union has “any other reasonable belief that the power of attorney is illegal or unenforceable and should be refused;” or
- The credit union makes a report to a designated law-enforcement or adult-at-risk agency, stating a good-faith belief that the principal may be subject to abuse (or it knows that someone else has made such a report). If you suspect someone acting under a POA is defrauding a member, or that any member is a victim of financial exploitation, Wisconsin and federal law allow you to alert appropriate authorities. For more information, see The League’s ii Release No. 0174, “Reporting Financial Abuse.”
The credit union can be sanctioned for refusing to accept a POA if it does not act in good faith. The person asking the credit union to accept the POA can go to court if the credit union refuses. If the court finds that the POA is valid, it can order the credit union to accept the POA and require the credit union to pay the costs and attorney fees that the person incurred.