Nov 19 2019

What to Do if a Bank Refuses to Accept a Power of Attorney?

By Attorney Allison Poirier / In General

Your loved one planned well, had a Power of Attorney (“POA”) prepared, and appointed you as their agent. Later, when you attempt to use the POA to help your loved one manage their finances, the bank refuses to accept the POA and denies you access to your loved one’s accounts.

Unfortunately, this is an all too common situation. In this day and age, where there are endless stories of elder financial abuse, banks are (understandably) cautious about allowing outsiders access to someone else’s financial information. However, their caution can sometimes lead to the rejection of a perfectly valid POA. Should you find yourself in this situation, you will be happy to learn that Connecticut has laws that can help.

Enactment of New POA Laws in 2016
In an effort to assist those individuals who have been placed in this situation, Connecticut enacted a new set of laws concerning POAs on October 1, 2016, known as the Connecticut Uniform Power of Attorney Act. The Act applies to all POAs, regardless of when they were signed (i.e. applies to POAs signed before, on, and after October 1, 2016).

Banks Must Accept Valid POAs
Prior to the Act’s adoption in 2016, one the primary reasons banks gave for refusing to accept a POA is that the POA is “too old.” Banks had also refused POAs stating that they can only accept POAs that had been prepared on the bank’s own forms. Under the Act, banks can no longer refuse to accept a POA because it is “too old” or require additional forms preferred by the bank. Instead, banks must accept a validly executed POA within 7 business days of receiving it.

If the bank has concerns regarding the validity of the POA, they cannot simply refuse to accept the POA. Their only options are to request: (1) a certification from the agent appointed in the POA stating that the POA is valid, (2) an English translation of the POA, if it is written in another language, and/or (3) an opinion of an attorney stating that the POA is valid. If the requested certification, translation, or opinion of any attorney is provided to the bank, the bank must accept the POA within 5 business days of receiving the certification, translation, or opinion.

If the Bank Still Refuses to Accept the POA?
If a bank refuses to accept a POA even after you have made them aware of the Act’s requirements, relief can be obtained by going to the courts. Courts can issue an order mandating that the bank accept the POA. If you commence such an action in the courts and are successful in obtaining a court order, the court can also order that the bank pay any attorney’s fees you incurred.

If the court process does not appeal to you, the bank’s cooperation can also sometimes be obtained following a phone call or strongly-worded letter from your attorney.

When Banks Can Refuse to Accept POAs
Despite all the protections provided to agents under POAs discussed above, the Act does recognize that there are certain circumstances when banks should be allowed to refuse to accept a POA. As such, the Act permits banks to refuse to accept a POA in the following situations:

  • If accepting the POA or performing the action being requested by the agent under the POA would involve breaking the law;
  • The bank has actual knowledge that the agent’s authority under the POA has been revoked and/or that the POA itself has been revoked;
  • The bank’s request for a certification, translation, or opinion of an attorney has been refused;
  • The POA does not give the agent the authority to perform the action that the agent is requesting; or
  • The bank has made, or has actual knowledge that someone else has made, a report to the Bureau of Aging at the Department of Social Services stating that the principal (the person who signed the POA) may be subject to physical or financial abuse.

What You Can Do to Avoid Potential Problems
While the law is on your side, having to resort to providing a legal argument as to why your loved one’s POA is valid is not a great situation to be in. One potential way to avoid this is to make sure your loved one periodically updates their POA. In other words, your loved one has a new POA prepared every 4 -5 years, in which they may still appoint the same people to serve as their agents as were appointed under their prior POA, in order to avoid the document becoming “too old.” Again, while the age of a POA is not a valid reason to refuse to accept it, keeping fresh dates on the POA may minimize resistance on the bank’s part.

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