Agenda. Do s and Don ts on Checks. Frontline Gettechnical Inc.

Transcription

1 Do s and Don ts on Checks Frontline 2015 The material used in this text has been drawn from sources believed to be reliable. Every effort has been made to assure the accuracy of the material; however, the accuracy of this information is not guaranteed. The laws are often changed without prior notice from the government. The publisher and the editor are not engaging in the practice of law or accounting. We are not responsible for the actions of your company's employees. 1 Agenda 2 1

2 Endorsements Business Checks Deceased payees Time frames and deadlines Signature card issues Wrongful return Withdrawal rights Authorized signers POAs Offset 10 Rules of Thumb 3 Do Get the Member to Endorse the Check 4 2

3 How do you spell endorsement/indorsement? The legal spelling of the word is indorsement. It was changed with Regulation CC and adopted by many state legislatures. You will see it spelled both ways. 5 Does an endorsement require a signature? Yes and here is the relevant statute INDORSEMENT. (a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument. (b) "Indorser" means a person who makes an indorsement. (c) For the purpose of determining whether the transferee of an instrument is a holder, an indorsement that transfers a security interest in the instrument is effective as an unqualified indorsement of the instrument. (d) If an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection. 6 3

4 Can we stamp a check for the member? As the credit union of first deposit, when you accept a check for deposit you warrant the check when you send it forward for collection. So the reason we stamp a check Guaranteed Endorsement for the within Named Payee is so that the credit union down the road does not return it MISSING ENDORSEMENT. It is always better to have the member endorse the check but sometimes the stamp is used when it is low risk. 7 Who generally takes the loss on a forged endorsement? Typically the credit union of first deposit is the credit union who should have identified the endorsers on a check. Check your state law: Transfer and Presentment Warranties UCC 3 416, 3 417, and Time limits: and

5 What if the check is made payable to the member s nickname? How should it be endorsed? If the check is made payable to Pete Smith but his real name is Paul Smith, have the member sign the check both ways. 9 Names Do Not Match Nicknames: First as it was written, and then correct name. 10 5

6 What if our member has married and the check is made payable to her old name? How should check be endorsed? Same answer as above. Have the member sign the check both ways. 11 Names Do Not Match First as it was written, and then correct name. 12 6

7 Can we deposit checks made payable to a person into a business account? Yes have the member sign the check over to the business. Joe Smith Pay to ABC, Inc Then have business endorse. 13 We get insurance checks made payable to Joe and Betty and ABC Bank. Who endorses? You will have all three endorse the check. Joe, Betty and whoever is acting for ABC Bank. You can put a reasonable cause hold on this if you are unable to verify the endorsement of a joint payee. 14 7

8 Is For Deposit Only a good endorsement? UCC requires a signature as mentioned earlier. However, except for the insurance drafts you can take a check that matches the account under the UCC that says the credit union made sure the person got the funds. This makes it important that the checks match the account. 15 Is there a case where the check may not match the account it is going in? Not often..but something like a collection agency account. But in that case you would have an agency agreement that ways that the agent can deposit checks for the owner. Or Third party checks which nobody likes. But you would have the endorsement as long as it is good. 16 8

9 Do checks made payable to Cash have to be endorsed? Can you stop payment on a Cash check? No it does not need to be endorsed, since it is a bearer instrument it is already negotiated. However internal procedures usually require the person we are giving the money to endorse so we know who got the money. Yes you can stop payment, you have the check number, amount, and who made payable to. But you cannot stop the member s obligation whoever bears the check is entitled to the funds so it might be a waste of time. 17 What kind of endorsements are legal? In most state laws you see 1. Blank check endorsed by payee 2. Special check is endorsed by payee and made payable to identified person 3. Restrictive For Deposit Only 18 9

10 Blank endorsement 19 Special endorsement 20 10

11 Restrictive endorsement 21 When a check is not clear is it an or check? This is state law. It is usually an or check but watch out for insurance drafts and any remaining treasury checks. Treasury checks usually are and checks IDENTIFICATION OF PERSON TO WHOM INSTRUMENT IS PAYABLE. (d) If an instrument is payable to two or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to two or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them. If an instrument payable to two or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively

12 What about checks that say VOID after 90 Days? In your signature card agreement, you will have a paragraph that should address this issue. You do not have to pay attention to legends anymore. 23 We receive checks payable to The Family of John Doe after funerals. Who can endorse? It is a lovely thought but you still have the problem of who is the Family. It puts you in the situation of having them open a nonprofit organization for these checks. It would be better if the checks were payable to the spouse or individual handling funeral

13 Do have member deposit business checks. 25 Can a business owner get less cash or cash a check made payable to the business? No. There is not a less cash box on the deposit slip and there is a reason for it. Checks made payable to an entity should be deposited in full into the entity s account 26 13

14 Can a check made payable to credit union be deposited into a personal account or used to open a new account? You may see a check made payable to the credit union to pay a loan or open an account. You should not have checks made payable to the credit union cashed for a member. 27 Can a check made payable to credit union fbo member go in member s account? This is usually an IRA account transfer or direct rollover to an IRA at your financial institution. These should not go into personal accounts or be cashed for the member

15 How can a business get petty cash? Issue the check payable to employee with Petty Cash in the memo. Or give employee check made payable to cash. 29 How can a bookkeeper be authorized to get a balance? Usually on the resolution for the business you can have special instructions inserted so that the bookkeeper is authorized by the business to get money

16 Sole Proprietorship Check 1: How is this check endorsed? Can it be deposited into the personal account of Joe Smith? For Deposit Only Floral Enterprises Joe Smith, Owner 31 Sole Proprietor Check 2: How is this check endorsed? Can it be deposited into a business account? A personal account? For Deposit Only Joe Smith Floral Enterprises 32 16

17 How is this check endorsed? Can a partner get money back? No Partnership Check: Can it be cashed? Can it be deposited into a personal account? For Deposit only Johnson Enterprises 33 Corporate Check: How is this check endorsed? Can it be cashed? NO Can it be deposited into Betty s personal account? NO Can she get less cash? NO For Deposit Only Johnson Enterprises Inc 34 17

18 Do Watch Deceased Issues on Checks 35 When do we know a member is deceased? It is usually knowledge DEATH OR INCOMPETENCE OF CUSTOMER. (a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes the authority to accept, pay, collect, or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it. (b) Even with knowledge, a bank may for 10 days after the date of death pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account

19 Check To A Deceased Person Who can handle a check to a deceased person? It is the executor or personal representative with proper authority to acts for the decedent. 37 Need Letters Testamentary or Letters of Administration 38 19

20 Can a spouse endorse a check for the decedent? Not unless he or she is the personal representative of the estate. 39 Can we clear checks the decedent wrote before death? You can clear checks for 10 days after death for your decedent member

21 Can we stamp a check for member who is deceased and put it in his or her joint account? The check belongs to the estate not to the joint owner on the account. 41 We received a check for $25,000 made payable to Mary Smith and she is deceased. The husband wants to deposit this to the trust. Can we? No this check now belongs to her estate. So only the executor of the estate can deposit it into an estate account. The husband may have been better served to have the person who it was made payable to and reissue the check to the trust

22 Do Watch Time Frames, Dates and other legal issues 43 What are the time frames for forgeries, forged endorsements and other issues? 44 22

23 Deadlines & Liabilities member comes into credit union and signs contract Target deposits check at credit union Member writes check to Target Hits credit union check drawn on 45 Federal Reserve Clears through various institutions What you have to know: Check your state statue Checks have to be returned by the midnight deadline A credit union must tell you when a large item is being returned by 4pm Statute of limitation is 3 years in most states on forged endorsements member must tell you in 30 days on a forgery or alteration in most states 46 23

24 What are time frames for a stop payment? CUSTOMER'S RIGHT TO STOP PAYMENT; BURDEN OF PROOF OF LOSS. (a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in Section If the signature of more than one person is required to draw on an account, any of these persons may stop payment or close the account. (b) A stop payment order is effective for six months, but it lapses after 14 calendar days if the original order was oral and was not confirmed in a record within that period. A stop payment order may be renewed for additional six month periods by a record given to the bank within a period during which the stop payment order is effective. (c) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a stop payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop payment order may include damages for dishonor of subsequent items under Section When does a check become stale dated? BANK NOT OBLIGED TO PAY CHECK MORE THAN SIX MONTHS OLD. A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith

25 Can we create an overdraft on an account? WHEN BANK MAY CHARGE CUSTOMER'S ACCOUNT. (a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank. (b) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item. (c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4 403(b) for stop payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section (d) A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to: (1) the original terms of the altered item; or (2) the terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper BANK'S LIABILITY TO CUSTOMER FOR WRONGFUL DISHONOR; TIME OF DETERMINING INSUFFICIENCY OF ACCOUNT. (a) Except as otherwise provided in this Article, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft. (b) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case. (c) A payor bank's determination of the customer's account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank's decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful

26 Do Honor Checks Rightfully Big Liability When Wrongfully Dishonor of a Check 51 How can we wrongfully dishonor a check? Maybe you placed a stop payment incorrectly. Your credit union paid a $ over a stop pay. Then you bounced three checks. This is both wrongful honor and wrongful dishonor of a check. Wrongful dishonor however may cause you to pay damages to your customer

27 Do we have to pay a substitute check across the counter? Yes, it is the legal equal of a check. 53 Can we stop payment on a cashier s check? In most states, there is a 90 day affidavit of loss time frame and then the check may be reissued. Refusing to pay your own cashier s check is wrongful dishonor of a check

28 Do connect checks with Account Card Issues 55 Most signature cards have five basic components: 1 OWNERSHIP 2 TITLE/MEMBERSHIP 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Gettechnical Inc 56 28

29 Why do account cards have to be consistent? Ownership matches titling matches signatories keeps us from having legal and insurance issues. Ownership Single Party or individual Joint or Multi-Party Trust Must Match TITLE/MEMBERS HIP Must Match Signatures Gettechnical Inc 57 Is POD a type of ownership or is it a special feature? It depends on your card and state law. Sometimes it is in the ownership section and sometimes it is a special Special Feature #1 feature. There are other special features. POD/ Trust Name of Beneficiaries POD pay at death to the list of beneficiaries. Special Feature #2 Number of Signatures Required 1 2 Some signature cards allow 2 signature requirement. Special Feature #3 Agents or Authorized Signers or convenience Some signature cards allow signers (as permitted by card) on individual or joint accounts. Gettechnical Inc 58 29

30 Member wants to put in grandson s name but signed by everyone? No this is not a single party account. 1 OWNERSHIP Single Party 2 TITLE/MEMBERSHIP Johnnie Smith 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Sally Smith John Smith Johnnie Smith Gettechnical Inc 59 Sample: Single Party/Individual 1 OWNERSHIP Single Party 2 TITLE/MEMBERSHIP Jane Smith 3 Single party FEDERAL is REGULATIONS checked, one owner on 5 TITLE/MEMBERS 4 HIP and one signer. TAXPAYER IDENTIFICATION SIGNATURES (Access) NUMBER Jane Smith Gettechnical Inc 60 30

31 What happens if the husband opens and the wife never signs? She is not insured and she has no access. 1 OWNERSHIP Multiple Party 2 TITLE/MEMBERSHIP Joe Smith or Mary Smith 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Joe Smith Gettechnical Inc 61 A grandma wants to put grandchildren on the TITLE/MEMBERSHIP, NOOOOOO. can we? 1 OWNERSHIP Multiple Party WROS WOROS 2 TITLE/MEMBERSHIP Betty Smith or 29 Grandchildren and any to come 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Betty Smith Gettechnical Inc 62 31

32 Sample: Multi Party/Joint Account 1 OWNERSHIP Multiple Party WROS WOROS 5 TAXPAYER IDENTIFICATION NUMBER Joint ownership, two in TITLE/MEMBERSHIP and two signers 2 TITLE/MEMBERSHIP Joe Smith or Mary Smith 3 FEDERAL REGULATIONS 4 SIGNATURES (Access) Joe Smith Mary Smith Gettechnical Inc 63 Sample: Informal Trust Account 1 OWNERSHIP Trust/POD Beneficiaries 1. Bill 3. Stan 2. Betty 4. Karla 5 TAXPAYER IDENTIFICATION NUMBER 2 TITLE/MEMBERSHIP Joe Smith or Mary Smith POD 3 FEDERAL REGULATIONS 4 SIGNATURES (Access) Joe Smith Mary Smith Gettechnical Inc 64 32

33 Can we have an account with a trust and people? 1 OWNERSHIP Multiple Party WROS WOROS 2 TITLE/MEMBERSHIP Joe Smith or Mary Smith or The Mary and Joe Smith Living Trust 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Joe Smith Mary Smith Joe Smith, Trustee Mary Smith, Trustee Gettechnical Inc 65 Sample: Multi Party/Joint Account 1 OWNERSHIP Multiple Party WROS WOROS 2 TITLE/MEMBERSHIP Joe Smith or Mary Smith 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Joe Smith Mary Smith Gettechnical Inc 66 33

34 Can an UTMA have an authorized signer? NO 1 OWNERSHIP UTMA 2 TITLE/MEMBERSHIP Little Johnnie Smith a minor by Sally Smith Custodian under UTMA 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Sally Smith, Custodian Agent/Authorized Signer: Bill Smith Gettechnical Inc 67 Can a UTMA have a joint owner? No 1 OWNERSHIP Joint 2 TITLE/MEMBERSHIP Johnny Smith a minor by Sally Smith Custodian under UTMA 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Sally Smith Johnny Smith Gettechnical Inc 68 34

35 Can a UTMA have POD? No 1 OWNERSHIP UTMA POD 2 TITLE/MEMBERSHIP Little Johnnie Smith, a minor by Sally Smith, Custodian under UTMA POD 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Sally Smith, Custodian Gettechnical Inc 69 Can mom s check go into child s UTMA account? It happens. The mom endorses the check over to the minor. It would be better to have the mom deposit the check into her own account and write the child a check

36 Sample: UTMA Account some states have joint custodians. 1 OWNERSHIP UTMA 2 TITLE/MEMBERSHIP Little Johnnie Smith, a minor by Sally Smith, Custodian under UTMA 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Sally Smith, Custodian Gettechnical Inc 71 Sample: Multiple Party/Joint Account with Minors 1 OWNERSHIP Multiple Party 2 TITLE/MEMBERSHIP Little Johnnie Smith or Joe Smith 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Joe Smith Little Johnnie Smith Gettechnical Inc 72 36

37 Sample: CD with Signature Card not signed by all owners 1 OWNERSHIP Multiple Party 2 TITLE/MEMBERSHIP John Smith or Sally Smith 3 In this situation, the daughter (Sally) came in and said they lost the CD. FEDERAL She filed an affidavit REGULATIONS only signed by her and got the $39,000. The father sued the credit union and won the money back. She was not a 5 4 signer. TAXPAYER IDENTIFICATION NUMBER SIGNATURES (Access) John Smith Gettechnical Inc 73 Withdrawal Rights Questions 74 37

38 If a minor is in the title of the joint account but has not signed signature card, can he or she withdraw money? Only those who sign can withdraw money or get information on the account. 75 Can a spouse get information or withdraw money on an account he or she did not sign on? Absolutely not. Only the signers on the account can get information or funds out of the account

39 Who can we give information to when the only owner and signer dies? We can give information or funds to the person authorized by the court to act for the decedent. 77 Authorized Signers, Agents and Convenience Signers 78 39

40 What can an agent/authorized signer/convenience signer do? Created on the signature card contract Usually can make transactions for the owner Only typically sign on that one account Cannot change ownership or do anything to benefit his or herself such as cashing a check made payable to authorized signer In some cards, only allow one and only on individual accounts 79 Continued.. Some cards, allow for joint accounts and signers and sometimes for more than one agent or signer Cease at the death of owner or owners Usually appear in system as a memo and usually do not appear on the face of the checks of the owner May have the language of durable versus not durable Owner revokes by signing a new contract and removing the signer. Some states have laws which you have to follow and some do not. These laws should be reflected in your signature card agreement

41 State law example #1 (6) CONVENIENCE ACCOUNT. The parties to the account own the account. One or more convenience signers to the account may make account transactions for a party. A convenience signer does not own the account. On the death of the last surviving party, ownership of the account passes as a part of the last surviving party's estate under the last surviving party's will or by intestacy. The financial institution may pay funds in the account to a convenience signer before the financial institution receives notice of the death of the last surviving party. The payment to a convenience signer does not affect the parties' ownership of the account. Enter the names of the parties: 81 State law example # Designation of agent. (a) By a signed writing, a party may designate one or more persons other than a party as his or her agent on an account. Unless the terms of the agency designation provide otherwise, the agency designation may be revoked or amended only by the party making the designation or by a guardian, conservator, or other fiduciary appointed by a court of the party's domicile and charged with the management of the account. (b) Unless the terms of an agency designation provide otherwise, the agent's authority survives disability, incompetency, and incapacity of the party making the agency designation. The agent may act for a disabled, incompetent, or incapacitated party until the authority of the agent is revoked. (c) Death of the party making the agency designation terminates the authority of an agent

42 Can we have two authorized signers on an account? It depends what your signature card contract says. Some can and some can t. 1 OWNERSHIP Individual Joint Trust/POD 2 TITLE/MEMBERSHIP Grandma 3 FEDERAL REGULATIONS 5 TAXPAYER IDENTIFICATION NUMBER 4 SIGNATURES (Access) Grandma s Signature Granddaughter s Signature as Agent or Authorized Signer Grandson s Signature as Agent or Authorized Signer 83 What is a convenience signer? Very similar to an authorized signer but usually is a type of ownership on the card. 1 OWNERSHIP Individual Joint Trust/POD X Convenience 5 TAXPAYER IDENTIFICATION NUMBER 2 TITLE/MEMBERSHIP Grandma 3 FEDERAL REGULATIONS 4 SIGNATURES (Access) Grandma s Signature Grandson s Signature Convenience 84 42

43 Outside POA 85 What is a POA? Document usually drawn up by member s attorney State law may dictate the form of the document These come in all shapes and sizes The documents may be complex and should be reviewed by credit union s legal counsel. May be durable or nondurable depending on state law Will dictate what the attorney in fact may or may not do 86 43

44 Can an attorney in fact withdraw money, cash a check or change ownership to benefit himself or herself? Attorney in fact can only do what the POA says he or she can. This typically involves acting for the grantor of the power and not on behalf of him or herself. 87 Does the attorney in fact have to sign an affidavit? The rules for POAs are different in many states but you might see something like this Affidavit of Lack of Knowledge or Termination of Power, Recording, Good Faith Reliance As to acts undertaken in good faith reliance on the durable power of attorney, an affidavit executed by the attorney in fact or agent under a durable power of attorney stating that the attorney in fact or agent did not have at the time of exercise of the power actual knowledge of the termination of the power by revocation, by the principal s death, by the principal s divorce or the annulment of the marriage of the principal if the attorney in fact or agent was the principal s spouse, or by the qualification of a guardian of the estate of the principal is conclusive proof as between the attorney in fact or agent and a person other than the principal or the principal s personal representative dealing with the attorney in fact or agent of the nonrevocation or nontermination of the power at that time

45 Sample affidavit.. STATE OF TEXAS COUNTY OF BRAZORIA AFFIDAVIT BEFORE ME, the undersigned authority on this day personally appeared, known to me to be a credible person and upon oath states as follows: "I am the duly appointed Attorney In Fact for, principal, who has executed according to law a Durable Power of Attorney naming affiant herein as his or her duly authorized agent to give authority to me to, among other things open an account at ABC Financial Institution in the name of or on behalf of said principal. Affiant further states that on the day of, 200_ as follows Check and initial as applicable: ( ) ( ) Said power of attorney had not been terminated or revoked by the principal, or by death or by the appointment of a guardian of the estate of the principal. The principal in said power of attorney is disabled or incapacitated, as defined by said power. Further your Affiant Saith Not. Signed this day of, 200. SUBSCRIBED AND SWORN TO BEFORE ME, by on this the day of, 200. Notary Public, State of Texas THE STATE OF TEXAS COUNTY OF BRAZORIA This instrument was acknowledged before me on the day of, 200, by Notary Public, State of Texas 89 In Illinois #2, you may have to accept an Agent. AGENT'S CERTIFICATION AND ACCEPTANCE OF AUTHORITY I,... (insert name of agent), certify that the attached is a true copy of a power of attorney naming the undersigned as agent or successor agent for... (insert name of principal). I certify that to the best of my knowledge the principal had the capacity to execute the power of attorney, is alive, and has not revoked the power of attorney; that my powers as agent have not been altered or terminated; and that the power of attorney remains in full force and effect. I accept appointment as agent under this power of attorney. This certification and acceptance is made under penalty of perjury.* Dated: (Agent's Signature)... (Print Agent's Name)... (Agent's Address) *(NOTE: Perjury is defined in Section 32 2 of the Criminal Code of 1961, and is a Class 3 felony.) 90 45

46 #2 Continued (c) Any person dealing with an agent named in a copy of a document purporting to establish an agency may presume, in the absence of actual knowledge to the contrary, that the document purporting to establish the agency was validly executed, that the agency was validly established, that the named principal was competent at the time of execution, and that, at the time of reliance, the named principal is alive, the agency was validly established and has not terminated or been amended, the relevant powers of the named agent were properly and validly granted and have not terminated or been amended, and the acts of the named agent conform to the standards of this Act. No person relying on a copy of a document purporting to establish an agency shall be required to see to the application of any property delivered to or controlled by the named agent or to question the authority of the named agent. (d) Each person to whom a direction by the named agent in accordance with the terms of the copy of the document purporting to establish an agency is communicated shall comply with that direction, and any person who fails to comply arbitrarily or without reasonable cause shall be subject to civil liability for any damages resulting from noncompliance. A health care provider who complies with Section 4 7 shall not be deemed to have acted arbitrarily or without reasonable cause. (Source: P.A , eff ) 91 You will have to address state law issues.. Pull your statute and talk to your legal counsel Add any issues that the two of you see to your checklist for accepting Power of Attorneys 92 46

47 When do POAs cease? State law and document often dictate how these work. Typically they cease at: Death of grantor Appointment of a guardian will usually rule over rule a power of attorney Revocation Time (military power of attorney s) In community property states, divorce if between husband and wife 93 How should attorney in fact sign? Is this the same for other fiduciary relationships? Who is he or she acting on behalf of? The attorney in fact is acting for someone This is usually the owner of the account Who? We need the attorney in fact s name What is the capacity? We need the job TITLE/MEMBERSHIP Power of Attorney Attorney In Fact 94 47

48 SAMPLE CHECK #1 Sally Smith has given a POA to her sister Hannah Smith. How should Hannah indorse the check? March 31, XXXX Sally Smith Ten & /100 I X Sally Smith By Hannah Smith, Attorney-In-Fact DO NOT SIGN/WRITE/STAMP BELOW THIS LINE FOR FINANCIAL INSTITUTION USAGE ONLY Bill Smith FEDERAL RESERVE B AND REGULATION CC 95 Set off or offset 96 48

49 Can we offset a member s debt with an IRA, HSA or CESA? No, it should be spelled out in your account agreement that these cannot be offset Do s on Checks 98 49

50 Thumb 1. The front of check should match back of check should match the account. 2. If your member has not signed signature card, he or she cannot get money or information. 3. Business checks should be deposited in full and not given cash back. 4. Checks made payable to the credit union should not be cashed. 99 Thumb continued 5. Authorized signers, attorney in fact and convenience signers are not owners and should not be able to cash their own checks, ACH pay into account, change ownership. They can only transact on behalf of owner. 6. Your signature card governs. 7. Deposit contracts have to be signed. Deposit records are used to determine insurance on accounts. 8. Fiduciaries should not act to benefit themselves and cannot pass down their duty

51 Thumb 9. Deceased members cannot sign or negotiate checks. 10. members should endorse checks and complete deposit slips. 101 Thanks for participating! Debbie Crawford Gettechnical Inc gettechnical@msn.com Wesley Kavelaris TTS info@ttstrain.com CUWebinars August 11 th - Opening Trust, Estate and Fiduciary Accounts August 13 th - IRA Distributions: Premature and Normal August 24 th - Smart Social Media August 25 th - Appraisals 101: The Sales Comparison Approach September 10 th - Vital Check Issues: 25 Questions and Answers September 16 th - Annual BSA Training for the Frontline