Mortgage

Bipartisan push begins in Congress to allow remote online notarizations nationwide

Bill would bring online notarizations to all states

If “coronavirus” isn’t the phrase of the moment, “social distancing” certainly is. All across the country, people are holed up in their homes in an attempt to limit the spread of the virus.

But what happens if one of those people wants to buy a home of their own right now? How are they supposed to close on that home in the age of social distancing?

Well, there’s now a bipartisan movement in Congress that would make that much easier.

This week, Sens. Mark Warner (D-VA) and Kevin Cramer (R-ND) introduced a bill that would allow remote online notarizations nationwide, which would enable many people to close on a home or conduct other legal activities without compromising their social distancing practices.

The bill, which is entitled the “Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020,” would authorize every notary in the United States to perform remote online notarizations.

Currently, nearly half (23, to be exact) of the states in the U.S. allow for the use of RON technology, in which a notary and signer are in different locations and use two-way audio-visual communication to securely execute electronic documents.

But the senators note that 55% of the country is unable to access this technology now, necessitating a bill that would allow for it nationwide.

The bill also requires tamper-evident technology to be used in electronic notarizations, and encourages fraud prevention through use of multifactor authentication.

“Americans shouldn’t have to risk their health or safety to execute important financial or legal documents, especially when they could do so from the safety of their own home,” Cramer said in a statement. “The SECURE Notarization Act brings the notary process into the 21st century, allowing people to securely complete documents while still following recommended health and social practices amid the coronavirus pandemic.”

The issue with a bill of this kind is that each state’s individual rules dictate the acceptability and legality of remotely notarized documents. And the senators note that the bill would not supersede state laws.

The bill would authorize every notary in the U.S. to perform RON.

According to Cramer and Warner’s offices, the bill would also:

  • Require tamper-evident technology in electronic notarizations.
  • Provide fraud prevention through use of multifactor authentication for identity proofing and audio-visual recording of the notarial act.
  • Allow signers outside the U.S., such as military personnel and their families, to easily and securely notarize documents.
  • Complement existing state laws, while allowing states the flexibility and freedom to implement their own RON standards.
  • Builds on the foundations of the Interstate Recognition of Notarizations (IRON Act of 2011), while adding additional consumer safeguards.
  • Follow a similar structure of complementary state/federal legislation, such as the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA).
  • Implement 2018 Treasury Report recommendations that Congress consider legislation to provide a minimum uniform national standard for electronic and remote online notarizations. Noting federal legislation is not mutually exclusive with continued efforts at the state level to enact a framework governing the use of electronic methods for financial documents requiring notarization.

The Department of the Treasury report the senators are referring to called for increased acceptance of electronic notarization nationwide.

The senators caution that their bill isn’t a cure-all, as the bill wouldn’t make the following changes:

  • Impede consumer choice.
  • Preempt state laws that adhere to uniform consumer protections, such as those laws based on the non-partisan model state law -Revised Uniform Law on Notarial Acts, 2018 -proposed by the Uniform Law Commission.
  • Infringe upon state data privacy laws.
  • Impact state law on testamentary wills and trusts.
  • Change state law governing the practice of law.
  • Favor specific technology or restrict the use of new and emerging advancements.
  • Impact recording in the land records or title searches.

“Virginia has safely and securely allowed the use of remote notarizations for years,” Warner said. “At a time when most people should be staying at home, there’s no reason anyone should have to leave just to get notary services.”

The bill is supported by the American Land Title Association, Mortgage Bankers Association, and the National Association of Realtors.

“The was just introduced yesterday after, frankly, being drafted over the weekend,” MBA CEO and President Bob Broeksmit told HousingWire this week. “This is happening in real time. We are encouraging that the provisions of the bill be included in one of these stimulus packages because it is so related. The immediate need for it is so related to the pandemic, and it’ll also help the efficiency of the closing process in perpetuity. But of course, it’s especially needed immediately.”

ALTA also supports the bill.

“With the need for social distancing to help prevent the spread of the virus, we want to provide options to consumers to close their transaction remotely nationwide,” said Diane Tomb, ALTA’s CEO. “We applaud the leadership of Senators Kevin Cramer and Mark Warner for introducing The SECURE Notarization Act, which offers a safe alternative to help get transactions completed during this health crisis. The strong standards in this bill are important to prevent fraud and offer consumers a more secure alternative rather than FaceTime or Skype when buying property or refinancing a mortgage.”

For more information on the applicability of the bill nationwide, click here for more information from ALTA.

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