California has distinguished itself as the state that may never accept remote online notarization (RON). The state has no legislation permitting RON, and has even gone so far as to write to Congress opposing proposed bills that would make RON legal in all 50 states.
Earlier this year, the state once again looked at RON legislation with its bill AB 199. After consideration in California’s judiciary committee, however, the bill died.
And now notaries are telling us why.
In California, notaries are required to take a thumbprint of the signer. This led to a famous crime being solved several years ago.
In 2008, two San Francisco Bay area men targeted 74-year-old Palm Springs resident Clifford Lambert to rob him of his home, money and eventually his life. But the criminals made one very critical error: they had an imposter, posing as Lambert, enter a notary office to sign several power of attorney documents to transfer property and possessions.
But they left something in return: the thumbprint of conspirator David Replogle, a San Francisco attorney who was sentenced to life in prison for his role in the plot.
“The most important material piece of evidence linking [the suspect] to the murder was the thumbprint in the notary journal,” said John Hall, the senior public information specialist with the Riverside County District Attorney’s Office told the National Notary magazine.
Because of this case and several like it that have risen through the years, including a case involving murder and identical twins, notaries hold fast to the notion that in-person notarization is vital as it secures something that cannot be replicated: the thumbprint.
This also brings to light another worry from California notaries: access to information. In many fraud cases, access to the original journal entry is used to determined who signed the document and when. But California notaries worry that opening access to eNotarization could change that.
Under California law, anyone looking for a journal entry can have access as long as they know the name of the signer and the date it was signed. Not every state holds that same view, and as such could restrict access in certain cases.
“The access to evidentiary value records is real, and is a huge concern of the California Civil Justice System, particularly the DOJ,” said Matt Miller, the California League of Independent Notaries president and founder.
Many RON experts tout the benefits of RON and how it virtually eliminates the risk of real estate fraud. In fact, RON was originally enacted in Virginia as a way to combat robo-signing.
“It’s just almost impossible for remote online notary to be a fraud, and if you were, most likely that the picture of you in the video is going to be detected,” Mid America Mortgage President Jeffrey Bode told HousingWire previously. “I think fraud is removed with the digital process.”
However, California notaries are worried about a different kind of security risk: data privacy.
“A lot of people don’t understand that these platforms…they don’t have their own server farms, nor do they host their own data,” Miller said. “All that video, all that journal data, all of those documents are then pushed out to Amazon Web Services.”
Miller explained this makes many nervous given AWS’ numerous security breaches.
“If someone was able to get a hold of that data, particularly that video data, then they could employ deepfake technology, and use that video to then perhaps sign over your assets to somebody else, or take out bad loans in your name,” he said.
Also in the state of California, a notary keeps their journal record until they die or retire. At that time the journal is turned over to the county clerk, where it is scanned and the secretary of state keeps the data on file another 10 years. Miller explained the state has no interest in taking on the responsibility that would come with storing digital entries.
“They don’t want to be responsible or become some kind of central repository for all of the electronic data that would come along with web, like all that video data, all the documents and journal entries, because they don’t want the liability of the data, exposure or loss or being being hacked,” he said.
When considering passing RON legislation earlier this year, California’s judiciary committee asked this question:
“Should California legalize remote online notarization without addressing issues of data preservation, evidentiary accessibility and reliability, user privacy, liability, insurance and security, and in so doing, potentially threaten the integrity of a key anti-fraud mechanism in our legal system?”
There is a lot of talk about tech development in the housing world as the mortgage industry is criticized for not keeping up with the latest tech available. However, some consumers may not be ready for the shift to new technology such as RON.
“The consumers in the world aren’t as tech savvy as we take them for,” Miller said. “And most notaries tell me that you have to walk someone through how to use their webcam for the first time.”
He explained that notaries complain that through the use of RON, many of them end up playing more of a role of tech support as consumers struggle to understand how to use the technology being offered to them.
“There’s always going to be the person who just can’t do online notarization just because they’re not tech savvy, or they don’t have a reliable internet connection,” he said. “So the mobile notary isn’t going anywhere, much to the RON proponents’ chagrin, just because we’re finding out all the little loopholes and the downside risks to this technology.”
The California judiciary committee contends that while RON would make the notarization process more convenient, that is not the purpose of notarization.
“It is undoubtedly inconvenient to use an in-person notary,” the committee wrote. “In-person notarization often requires traveling to a physical location outside of one’s home or office, usually during work hours, and it requires that one remember to bring the proper documentation or identification. In our fast-paced, networked world, there is no doubt that in-person notarization reduces the ease and efficiency of transactions.”
“But the purpose of the notary system is not efficiency,” it stated. “Its purpose is to help ensure the validity of signatures used to document certain vital, life-altering transactions and events, such as real estate sales and purchases, the granting of powers of attorney and the creation of advance health care directives. These events and transactions occur relatively rarely in most people’s lives.”