Does regal review cross a line?

Q. Our bank sends all power-of-attorney documents that ewe receive in connection with deposit accounts to an attorney. The lawyer reviews the documents and renders an opinion regarding the validity of each power of attorney. Would this be a violation of our customer's privacy?

A. No. If

the customer wants you to use a power of attorney that they obtained elsewhere, rather than your form, then a review is something that the bank must do, to ensure that it meets state legal requirements. The requirements for an initial privacy notice in Section 216.4(a)(2) of the Code of Federal Regulations, and for the opt out in Section 216.7 and Section 216.10, do not apply if you disclose nonpublic personal information as necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes, or in connection with, "Servicing or processing a financial product or service that a consumer requests or authorizes; ..."

The phrase, "Necessary to effect, administer, or enforce a transaction" means that the disclosure is: "Required, or is one of the Lawful or appropriate methods, to enforce your rights or the rights of other persons engaged in carrying out the financial transaction or providing the product or service."

Leslie Callaway, CRCM, contributing editor, works with ABA experts to answer member questions. Submit questions to lcallawa@aba.com