Can a Bank Reject Power of Attorney in Maryland?

Banks can and do reject power of attorney documents — but Maryland law sharply limits when that rejection is legal. If you use the statutory form and execute it properly, a Maryland bank that refuses to honor your POA faces court-ordered compliance and liability for your attorney's fees.

The Statutory Acceptance Mandate

Under Estates and Trusts § 17-104, financial institutions in Maryland are legally prohibited from requiring their own custom power of attorney form when the agent presents a properly executed statutory POA. Before the 2010 Statutory Power of Attorney Act, banks routinely demanded that customers use the bank's internal forms, rejecting third-party and attorney-drafted POAs. The 2010 law ended that practice by creating a single statutory form that all institutions must accept.

The key requirement: the POA must follow the statutory form under ET § 17-202 and meet the execution requirements of ET § 17-110 — signed by the principal, acknowledged before a notary, and witnessed by two adults.

When a Bank Can Legally Refuse

A bank has legitimate grounds to reject a POA in limited circumstances:

The document is improperly executed. If the POA lacks notarization, does not have two witnesses, or was signed by someone other than the principal without proper direction, the bank can refuse it. This is the most common reason for rejection — and it is avoidable.

The agent's authority does not cover the requested transaction. If the POA grants limited powers and the agent is requesting a transaction outside those limits, the bank can refuse. A POA that grants authority only over tax matters does not authorize the agent to close a savings account.

The bank has actual knowledge of revocation or death. If the bank has been notified that the principal has revoked the POA or has died, it must refuse to honor the document.

Reasonable suspicion of fraud or abuse. Banks retain the right to refuse transactions where there are genuine indications of agent misconduct or document fraud.

The 2017 Written Notification Requirement

Under legislative changes effective in 2017, if a bank refuses to honor a power of attorney, it is now legally required to provide the agent with a written notice explaining the specific reasons for the refusal. This prevents branch managers from hiding behind vague "compliance concerns" or unwritten internal policies.

The written notice creates documentation. If the refusal is wrongful, the agent has the bank's stated reasons on paper — which becomes evidence in any enforcement action.

Your Legal Recourse for Wrongful Rejection

If a bank wrongfully refuses a properly executed statutory POA, Estates and Trusts § 17-104 provides two remedies:

1. Court-ordered acceptance. The agent can petition the court to compel the bank to honor the document. Courts have consistently enforced this provision against institutions that reject valid statutory forms.

2. Attorney's fees and costs. The bank is liable for all reasonable attorney's fees and legal costs the agent incurs in the enforcement action. This shifts the financial burden of wrongful rejection entirely onto the institution.

POA Abuse and Agent Accountability

The flip side of bank acceptance is the risk of agent abuse. Under ET § 17-113, agents owe the principal a strict fiduciary duty of loyalty. An agent who uses the POA to steal from the principal, make unauthorized gifts, or comingle the principal's funds faces civil liability for damages and criminal prosecution for theft or exploitation of a vulnerable adult.

Banks serve as the first line of defense against abuse. Unusual transaction patterns — large cash withdrawals, new beneficiary additions, account closures — can trigger the bank's internal fraud protocols. This tension between acceptance and fraud prevention is deliberate: banks must honor valid documents, but they retain the duty to flag suspicious activity.

If you are concerned about agent abuse after granting a POA, you can revoke the document at any time. A written revocation delivered to the agent and all institutions where the POA was used terminates the agent's authority immediately.

The Maryland Power of Attorney Kit includes a bank demand letter template for situations where an institution wrongfully rejects your statutory POA, along with the full revocation procedure.

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