I have durable POA over my father's financial affairs. He has dementia/Alzheimer's and my parents have always kept their checking accounts separate. My mother pays all the household expenses out of her social security check, and he basically gambles or spends his check on whatever he feels like. I went to the bank and exercised the POA by transferring money from his account to her account so she would be able to pay bills. When he found out about it, he went to the bank (Bank of America) and told them he was revoking my POA and they allowed him to do so, even though he has dementia (I showed the bank the diagnosis from the doctor). Can banks cancel a POA like this? It seems like that should not be legal for them to do so, since the reason for a POA is so that someone can manage the affairs of another once they are no longer able to do so.
You have to demonstrate that your father lacks legal capacity. And, btw, it wasn't the bank who cancelled the POA, it was your father.
The difficulty is that you don't lose capacity the moment you're diagnosed with dementia - it's a question of how you can have his competence formally assessed. The doctor who gave you the diagnosis may be able to advise you on what to do next, or you could look for an experienced attorney.