A-3551, AUG. 23, 1965

A-3551, AUG. 23, 1965

TO LIEUTENANT COLONEL JAMES J. MARTIN, USA, ASSISTANT TO THE PRESIDENT MECHANICS NATIONAL BANK:

REFERENCE IS MADE TO YOUR LETTER OF JULY 22, 1965, CONCERNING THE DEPOSIT OF RETIREMENT CHECKS TO JOINT ACCOUNTS, WHICH WAS THE SUBJECT OF OUR DECISION OF FEBRUARY 3, 1964, A-3551, TO THE SECRETARY OF THE ARMY.

IN THAT DECISION WE POINTED OUT THAT RETIRED PAY IS PAYABLE ONLY DURING THE LIFETIME OF THOSE PERSONS WHO HAVE QUALIFIED FOR RETIREMENT WITH PAY AND THAT CERTAIN SAFEGUARDS HAVE BEEN REQUIRED FOR THE PROTECTION OF THE GOVERNMENT TO INSURE THAT RETIRED PAY CHECKS ARE NOT PAID AFTER THE DEATH OF THE BENEFICIARY, SUCH AS SPECIAL INSTRUCTIONS TO POST OFFICE EMPLOYEES RESTRICTING DELIVERY OF THE CHECK ENVELOPES, APPROPRIATE LEGENDS ON THE CHECKS TO GIVE NOTICE TO THE ENDORSERS THAT THE CHECKS ARE PAYABLE ONLY DURING THE LIFETIME OF THE PAYEE, AND THE FURNISHING OF SPECIFIC POWERS OF ATTORNEY FOR PERIODS NOT EXCEEDING 12 MONTHS. WE HAVE APPROVED DELIVERY OF CHECKS DRAWN TO THE RETIRED MEMBERS AND MAILED TO RESPONSIBLE BANKS OR TRUST COMPANIES UNDER SPECIAL POWERS OF ATTORNEY OF NOT MORE THAN 12 MONTHS' DURATION.

IN OUR DECISION OF FEBRUARY 3, 1964, WE SAID:

"* * * THERE IS NO OBJECTION TO THE ISSUANCE OF CHECKS IN RETIRED MEMBER'S NAME WHERE THEY ARE NEGOTIATED UNDER A SPECIAL POWER OF ATTORNEY NAMING A BANK AS ATTORNEY IN FACT, LIMITED TO A PERIOD NOT EXCEEDING 12 MONTHS AND RECITING THAT IT IS NOT GIVEN TO CARRY INTO EFFECT AN ASSIGNMENT OF THE RIGHT TO RECEIVE PAYMENT, EITHER TO THE ATTORNEY IN FACT OR TO ANY OTHER PERSON. SEE SECTION 5 OF TREASURY DEPARTMENT CIRCULAR NO. 21 GOVERNING THE ENDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES.'

YOU SAY THAT IN AN EFFORT TO COMPLY WITH OUR DECISION OF FEBRUARY 3, 1964, THE MECHANICS NATIONAL BANK HAS SENT TO EACH OF ITS CUSTOMERS WHO WERE AND ARE HAVING THEIR RETIRED CHECKS DEPOSITED TO THEIR JOINT ACCOUNTS A LETTER OUTLINING THEIR OPTIONS, AS FOLLOWS:

"* * * SHOULD YOU DESIRE TO CONTINUE TO HAVE YOUR CHECK DEPOSITED TO YOUR JOINT ACCOUNT YOU MAY DO SO BY REQUESTING YOUR CHECK TO BE CHANGED AS FOLLOWS:

"/A) CHECK DRAWN PAYABLE TO YOU AND MAILED TO YOUR HOME ADDRESS. THE CHECK THEN, AFTER BEING ENDORSED BY YOU, MAY BE DEPOSITED TO YOUR JOINT ACCOUNT DIRECTLY OR OUR "BANK-BY-MAIL SERVICE.'

"/B) CHECK DRAWN PAYABLE TO YOU AND MAILED TO THE BANK. IF THIS METHOD IS USED "POWER OF ATTORNEY" SHOULD BE GRANTED US IN ORDER THAT YOUR CHECK MAY BE DEPOSITED TO YOUR JOINT ACCOUNT.

"/C) HAVE YOUR ACCOUNT CHANGED TO A SINGLE ACCOUNT OR OPEN A NEW SINGLE ACCOUNT FOR THE PURPOSE OF HAVING YOUR CHECK SENT DIRECTLY TO THE BANK FOR DEPOSIT TO THAT ACCOUNT.

"TO DATE WE HAVE AND WILL CONTINUE TO DEPOSIT YOUR CHECK TO YOUR JOINT ACCOUNT. HOWEVER, SINCE THE RULING OF THE COMPTROLLER GENERAL HOLDS THE BANK RESPONSIBLE FOR SUCH ACTION WE WOULD APPRECIATE IT IF YOU WOULD TAKE THE NECESSARY STEPS TO HAVE THE DEPOSIT OF YOUR RETIRED CHECK COMPLY WITH ONE OF THE OPTIONS AS OUTLINED IN A, B, OR C ABOVE.'

YOU STATE THAT OPTION "/B)" RAISES QUESTIONS INVOLVING BOTH THE CUSTOMERS AND THE BANK AND YOU INQUIRE:

"IS IT UP TO THE INDIVIDUAL TO INITIATE CORRESPONDENCE TO FINANCE CENTER U.S. ARMY, INDIANAPOLIS, INDIANA, TO EFFECT THE NECESSARY CHANGE TO HAVE THEIR CHECKS MADE PAYABLE TO THEM AND SENT TO US?

"SHOULD THE INDIVIDUAL ELECT THIS OPTION AND PROVIDE US WITH A POWER OF ATTORNEY AUTHORIZING THE BANK TO DEPOSIT CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES MADE PAYABLE TO THEM FOR DEPOSIT IN THEIR JOINT ACCOUNT TO WHAT EXTENT IS THE BANK LIABLE FROM DEMISE TO NOTIFICATION.'

A PERSON ENTITLED TO RECEIVE RETIRED PAY FROM THE ARMY WHO DESIRES THAT A CHANGE BE MADE IN HIS RETIRED PAY CHECK SHOULD NOTIFY THE ARMY FINANCE CENTER AND, IF HE WANTS THE CHECK TO BE SENT TO YOUR BANK IN THE MANNER INDICATED IN YOUR FIRST QUESTION, HE SHOULD EXECUTE AN APPROPRIATE POWER OF ATTORNEY IN FAVOR OF YOUR BANK.

FEDERAL REGULATIONS GOVERNING THE INDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE TREASURER OF THE UNITED STATES PROVIDE WITH RESPECT TO DECEASED PAYEES THAT SUCH CHECKS "MUST NOT BE NEGOTIATED AFTER THE DEATH OF THE PAYEE BUT MUST BE RETURNED TO THE DRAWER OR TO THE ADMINISTRATIVE OFFICE WHICH AUTHORIZED ISSUANCE OF THE CHECK * * *.' SEE 31 CFR 360.4. WITH RESPECT TO CHECKS INDORSED BY AN ATTORNEY IN FACT, SUCH REGULATIONS PROVIDE THAT "POWERS OF ATTORNEY ARE REVOKED BY THE DEATH OF THE GRANTOR * * *.' 31 CFR 360.5. THE SUFFICIENCY OF AN INDORSEMENT ON A CHECK PRESENTED TO THE TREASURER OF THE UNITED STATES FOR PAYMENT, HOWEVER, IS, IN THE FIRST INSTANCE, A MATTER FOR THE CONSIDERATION OF THAT OFFICIAL. ACCORDINGLY, YOUR LETTER IS BEING REFERRED TO THE TREASURER OF THE UNITED STATES FOR FURTHER ACTION.