We've been having a rash of POA situations lately, and this prompted a discussion of what to get under the CIP. I haven't been able to locate a specific discussion of this amid all the CIP chatter, so if there has been one, my apologies! Here's the situation:

POA Attorney-in-fact (AIF)comes to the bank and presents us with a POA document (we'll say it's from an existing customer, who is now in a nursing home and unable to sign our in-house POA document). The AIF would like to open an individual account and - in perusing the POA document - this is allowed. What documentation - under the CIP - are we required to obtain for identification? We can match the customer's signature from the prior account to authenticate the signature establishing the POA, but the actual account owner is unable to sign a card to open the account. We developed an Affidavit for POA that will hold us harmless, and will have the AIF sign that, but should we document the CIP-required ID documents? (We did determine that if the grantor of the POA was not an existing customer with a signature on file, we would not be interested in opening an account this way.)

Help please. Thanks!

Since the AIF will be the one actually signing the checks, why would you need to worry about the grantor? I would keep a copy of the POA document, have the AIF sign the affidavit, have the AIF sign a signature card and document his/her identification according to your CIP.

I see your point - if the AIF signs the affidavit and there were a problem with legality of the POA, the AIF would be the one in the hotseat - as long as we fully ID him/her. Thanks.

The other thing to keep in mind (from my Mass Bankers Handbook) is that "A bank is not obligated to to open an account or accept a POA on an existing account".

Ooohh...I like it! I'll check w/our Michigan guru and see if he's familiar w/that! Thanks. (Of course, I realize that we aren't obligated to really open ANY account, but those sales incentives tend to cause all sorts of accounts to be opened!)

Barb, I didn't see anything similar in Mich. state law (but I didn't do exhaustive research, either.) Rather, I'd say it's a matter of contract. Here's a section of our deposit account agreement:

AUTHORITY. You will not grant anyone authority to conduct business with us on your behalf until we have reviewed the terms of authorization and have given you written acceptance. This includes authority such as power of attorney, bill-paying arrangement, or other method. You will not claim that we wrongfully dishonored items presented to us before we accepted the authorization. If you have not given us the proposed authorization for advance review, we may, in good faith, honor items and instructions from the person you authorized. You will not hold us responsible if someone you authorized to do business with us misapplies your money. You assume all risk of improper acts by such person. We can consider an authorization valid until we actually receive written revocation of it and have had reasonable time to review and act upon it. If we accept an authority, we may revoke our acceptance of that authority at any time at our discretion.

(We use Bankway forms from Kirchman.)

I think this covers us - from the CIP perspective, Tom is providing good advice. Make sure the POA is who they say they are. In the circumstances you describe, there will always be some risk.

In our state we MUST accept a POA document if it has the required criteria: Must be from our state, be durable and have specific language for 3rd parties to release us from liability. We do not, as bank policy, open accounts for an AIF since we are required to identify the actual owner of the account. POAs are normally dictated by state laws. When we do accept we also have an indemnity form the AIF signs.

While you are correct in being concerned about the authority of the AIF to open the account in the name of the grantor of the POA, your CIP data requirements must focus on the "customer."

In this case, since the grantor of the POA is not a ward or other person without legal capacity to contract, your customer for CIP purposes is the grantor, and you need to get and the grantor's ID info (name, DOB, SSN, street address) and verify that person's ID within your CIP parameters.

If you do the same for the AIF (I'd advocate that for common sense reasons), so much the better. Your CIP can even require such a step as routine in similar circumstances.

If we're only doing this for existing customers/grantors and not for a NEW customer/grantor who may be unable to provide us with identifying information (because they're in a nursing home, for example), we should have previously identified that individual based on their prior account relationship. At least one can hope so.... Thank you all for your input!