What's happening
This bill requires all banking institutions in New York to accept properly executed statutory short form powers of attorney and clarifies their validity despite a principal's disability or incompetence.
Why it matters
Protects individuals’ ability to manage finances through trusted agents. By requiring banks to accept properly executed statutory short form powers of attorney, the bill ensures that people can have a designated person handle their banking even if they become physically or mentally unable to do so themselves.
Prevents banks from arbitrarily rejecting valid powers of attorney. The law makes it unlawful for banking institutions to refuse these documents, reducing hurdles or delays that can otherwise disrupt critical financial transactions for families and caregivers.
Clarifies legal standing of actions taken under durable powers of attorney. It spells out that if the power of attorney form specifies it survives disability or incompetence, all actions taken by the agent remain legally binding, benefiting not just the principal but also their heirs and estate.
Limits bank liability when acting in good faith. Banks and their employees are shielded from liability when honoring powers of attorney unless they have received written notice of revocation, encouraging smoother acceptance of these documents and reducing fear of legal repercussions for financial institutions.
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Who cares
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Require Banks Accept Power Attorney
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to banks
- Referred to banks
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3847
2019-2020 Regular Sessions
IN SENATE
February 19, 2019
Introduced by Sen. HELMING -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to the use of powers of attorney in banking transactions
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The banking law is amended by adding two new sections 9-x and 9-y to read as follows:
§ 9-x. Acceptance of statutory short form power of attorney. 1. No bank, trust company, national bank, savings bank, federal mutual savings bank located in this state, savings and loan association, federal savings and loan association, federal mutual savings and loan association, credit union or federal credit union or branch of a foreign banking corporation or any other corporation authorized to conduct banking business in this state (each of the foregoing referred to in this section as "banking institution") located in this state shall refuse to honor a statutory short form power of attorney properly executed in accordance with section 5-1501B of the general obligations law.
2. The failure of a banking institution to honor a properly executed statutory short form power of attorney shall be deemed unlawful.
3. No banking institution receiving and retaining a statutory short form power of attorney presented to it as provided in subdivision one of this section nor any officer, agent or employee of such institution shall incur any liability by reason of acting upon the authority thereof unless the institution shall have actually received, at the office where the account is located, written notice of the revocation or termination of such power of attorney.
4. If the application of the provisions of subdivision one or two of this section shall be held invalid to any banking institution, the application of such provisions to any other banking institution other than those to which it is held invalid, shall not be affected thereby.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10045-01-9
S. 3847 2
§ 9-y. Powers of attorney which survive disability or incompetence. 1. The subsequent disability or incompetence of a principal shall not revoke or terminate the authority of an attorney-in-fact who acts under a power of attorney in a writing executed by such principal which contains the words "This power of attorney shall not be affected by the subsequent disability or incompetence of the principal," or words of similar import showing the intent of such principal that the authority conferred shall be exercisable notwithstanding his subsequent disability or incompetence.
2. All acts done by an attorney-in-fact pursuant to a power granted pursuant to subdivision one of this section during any period of disability or incompetence shall have the same effect and inure to the benefit of and bind a principal and his distributees, devisees, legatees and personal representatives as if such principal were competent and not disabled. If a committee or conservator thereafter is appointed for such principal, such attorney-in-fact, during the continuance of the appointment, shall account to the committee or conservator rather than to such principal. The committee or conservator shall have the same power such principal would have had if he were not disabled or incompetent to revoke, suspend or terminate all or any part of such power of attorney.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to the use of powers of attorney in banking transactions
Purpose
To require banks authorized to do business in the state to accept a statutory short form power of attorney.
Summary of provisions
Section 1 adds a new Section 9-x to the Banking Law to require all "banking institutions" authorized to do business in this state to honor a statutory short form power of attorney. No employee, agent or officer of a banking institution in New York, who has received a statutory short form power of attorney, shall incur any liability for acting upon the authority thereof unless the institution has received, at the office where the account is located, written notice of the revocation or termi- nation of such power of attorney.
A new Section 9-y is added to the Banking Law to provide that the subse- quent disability or incompetence of a principal shall not revoke or terminate the authority of an attorney-in-fact who acts under a power of attorney. This must be specified in writing, executed by the principal, containing the words "This power of attorney shall not be affected by the subsequent disability or incompetence of the principal," or words of similar import. If a committee or conservator is appointed for such principal, the attorney in-fact will account to the committee or conser- vator. The committee or conservator will hold the same power as the principal to suspend or terminate any part of such power of attorney.
Section 2 sets the effective date.
Justification
The provisions of this proposal are contained in Sections 5-1504 and 5-1601 of the General Obligations Law. However, these are not in the Banking Law and the current long form power of attorney forms are very complex and are often improperly executed. There is a proposal to begin using one single form and, however, it will most likely take time to implement this proposal. This legislation will assure that banks are allowed to use a short form until this proposal goes into effect.
Prior legislative history
(2003) A3394 - Referred to banks (2004) A9669 - Referred to rules (2005) A0411 - Referred to rules (2006) A0411 - Referred to banks
(2007) A8500 - Referred to banks (2008) A8500 - Referred to banks (2009) A5906 - Referred to banks (2010) A5906 - Referred to banks (2011) A4690 - Referred to banks (2012) A4690 - Referred to banks (2013-14) A3427 - Referred to banks (2015-16) A2748 - Referred to banks (2017-18) S5983/A6456 Referred to banks
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.