POA Responsibility For Overdrawn Accounts

Question: If a checking account becomes overdrawn due to the account owner withdrawing the funds in the account before all the checks on the account have cleared, is the Power of Attorney on the account (who wrote the check) legally responsible for the overdrawn account? Can the bank pursue the POA to collect the funds? Can merchants pursue the POA to collect the funds? Do you have any documentation to this effect?

Answer: A power of attorney can act FOR your depositor, but is not the owner of the account. So the answer is, no, you can't go after the POA if the account is overdrawn. Even if the POA was the one who overdrew the account, you'd still go after the owner of the account, not the POA. For more information on POA and where you can find documentation for your state, I'd suggest you check out Mary Beth Guard's article on the BankersOnline web page. You'll find the article at: http://www.BankersOnline.com/operations/whosgotpower.html

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 4, 5/02