The U.S. House of Representatives passed a bill late Wednesday creating federal minimum standards, which would allow notaries nationwide to perform remote online notarizations. The legislation passed the House with a vote of 336-90.
A key to advancing the universal adoption of fully electronic mortgages is the creation of remote online notarization (RON) standards across all 50 states. The enactment of the national RON standards embodied in the now-approved House legislation, dubbed the SECURE Notarization Act of 2021 (SECURE stands for Securing and Enabling Commerce Using Remote and Electronic), would move the country and housing industry one step closer to a future in which E-mortgage is a reality.
A total of 41 states to date have enacted laws enabling the use of remote online notarization. The House legislation complements those existing laws while also providing states the freedom to put in place their own RON standards. The House legislation allows “a notary publicly commissioned under state law to remotely notarize electronic records and perform notarizations for remotely located individuals,” according to a summary of the House bill, H.R. 3962.
“Additionally, the bill requires U.S. courts and states to recognize notarizations — including remote notarizations of electronic records and notarizations of remotely-located individuals — that occur in or affect interstate commerce and are performed by a notary public commissioned under the laws of other states,” the bill summary continues. “The bill also allows a notary public to remotely notarize electronic records involving an individual located outside of the United States, subject to certain requirements.”
Robert Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), applauded the House action, noting the legislation creates minimum standards for RON that are in harmony with the Mortgage Industry Standards Maintenance Organization RON standards, the MBA and American Land Title Association’s (ATLA) model RON bill, as well as existing state laws.
“The U.S. House took a major leap toward establishing a more modernized notarization system that doesn’t leave anyone behind,” said Diane Tomb, ALTA’s chief executive officer, in reacting to the passage of the House RON bill. “Unfortunately, too many consumers and businesses across several states still do not have access to technology that allows them to execute critical documents remotely.”
In-person electronic notarization (IPEN) is quickly gaining industry-wide traction with lenders, title agencies and settlement companies due to its convenience, cost savings and improved borrower experience. Learn more here!
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She added: “We are optimistic that all consumers across the country will soon be granted permanent access to RON.”
Broeksmit echoed the sentiment, saying MBA members also are grateful the House passed legislation that will “allow notaries in all states to perform safe and effective remote online notarization transactions.” If its companion bill passes in the Senate, Broeksmit continued, the change ultimately would make “the mortgage-closing process more convenient for all consumers — including our nation’s military families.”
The bipartisan House bill was introduced by U.S. Reps. Madeline Dean, D-Pennsylvania, and Kelly Armstrong, R-North Dakota, along with 31 co-sponsors.
The Senate will next take up the House companion bill, S. 1625, introduced by Sens. Mark Warner, D-Virginia, and Kevin Cramer, R-North Dakota.
“MBA now urges the Senate to consider and pass S. 1625, the House bill’s companion measure, as expeditiously as possible,” Broeksmit said.