Credit union negligent in allowing an agent to pledge account funds
A principal and his agent under a power of attorney granting extensive authority over banking transactions opened a joint account at a credit union. The principal was the sole source of the funds in the account. Later, the agent pledged the accounts as security for personal loans to agent on which he eventually defaulted and credit union took ownership of the funds.
In Bryant v. Community Choice Credit Union, No. 05CA0910, 2007 WL 177671 (Colo. Ct. App. Jan. 25, 2007), the court held that because the credit union noted the power of attorney in its records, it knew that the agent was a fiduciary for the principal and therefore breached its duty of care in allowing agent to use the accounts for himself and that an action for conversion would also be available.
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