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The latest Q & A on a compliance issue, as provided by the League’s General Counsel at Norman, Hanson & DeTroy.
Question: We have a person who has been approved as a Representative Payee by the Social Security Administration on behalf of our member, and she is requesting that we give her the funds in the member’s account so that she can pay his rent. Should we allow this; and if so, is the paperwork she received from the SSA sufficient?
Answer: No. A Representative Payee’s legal authority over a member’s funds is very limited. It does not act in the place of a Power of Attorney or Letters of Conservatorship. A Representative Payee only has the right to receive social security benefits being paid to the beneficiary/member. The Representative Payee owes a fiduciary duty to the beneficiary and must use the funds paid for his benefit, for example, paying the beneficiary’s rent, medical bills, food, etc. However, the Representative Payee has no authority over any other accounts, funds, or property of the beneficiary; and consequently, she has no right to funds in the beneficiary/member’s account at the credit union.
For more compliance news, please visit League INFOSight through the Destination Compliance section of the Maine CU League’s website.