Recognition of Powers of Attorney by Banks
A power of attorney for financial matters grants the agent unrestricted authority to manage a bank account; any additional requirements are unlawful.
A saver had issued a power of attorney to a trusted individual, authorizing that person to represent the saver in all financial matters to the extent permitted by law.
According to the terms of the power of attorney, the agent was authorized to manage the savings account. However, the power of attorney was not sufficient for the bank. It required the presentation of a court-issued guardianship order, including the appointment document and guardian ID. The agent then retained a lawyer to ensure the power of attorney was enforced. The bank was sued for damages to cover the necessary legal fees.
The bank refused to cover the costs, and the case went to the Regional Court. The judges ruled in favor of the plaintiff. It was undisputed that the bank had received a power of attorney for all financial matters transmitted via fax. In the judges’ view, the bank’s conduct did not indicate that it doubted the validity of the power of attorney itself, but rather that it was imposing additional requirements, such as a court-issued certificate of appointment. From the plaintiff’s perspective, engaging a lawyer was therefore necessary and required, meaning that the bank ultimately had to cover the legal fees.
Conclusion: The ruling makes it clear that banks may not impose unjustified requirements on a power of attorney. However, a separate power of attorney for banking purposes is likely still the safer alternative.
