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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 member who executed a Power of Attorney (“POA”) in New York back in 2001. Are we able to accept this POA?
Answer: Maybe. The person who executes a POA is known as the “Principal,” while the person named to exercise the powers is known as the “Agent.” The Maine Probate Code (“Code”) governs POAs and provides, “A power of attorney executed other than in this State is valid in this State if, when the power of attorney was executed, the execution complied with” the law of the state that determines its meaning and effect. The Code also states, “The meaning and effect of a power of attorney is determined by the law of the jurisdiction indicated” in the POA; and if such law is not stated in the POA, then the applicable law is the jurisdiction in which the POA was executed. In the above New York POA, it could state, “This POA is governed by the law of New York.” If so, New York law would apply. However, it could state, “This POA is governed by the law of Massachusetts,” and Massachusetts law would apply even though the POA was signed in New York. If the POA does not state any governing law, then New York law would apply. Assuming New York law applies, the POA is effective so long as it is effective under New York law. You may logically ask, “How do we know whether it complies with New York law?” Your attorney may be able to research New York law, but the credit union would have to pay for that and the attorney may not be comfortable with another jurisdiction’s law. However, Maine law provides other recourse. You can ask the Agent to provide a certification under the penalty of perjury that the Principal is still alive, has not revoked the POA, the POA is still effective, and the POA is an accurate copy of the original POA. You can also ask the Agent to provide an opinion of an attorney that the POA is enforceable under New York law.
For more compliance news, please visit League INFOSight through the Maine CU League's website.