In May, Senators Mark Warner (D-VA) and Kevin Cramer (R-ND) reintroduced federal legislation designed to expand the use of Remote Online Notarization (RON) on a nationwide basis. The Securing and Enabling Commerce Using Remote and Electronic Notarization (SECURE) Act of 2020 was originally introduced in March of 2020. The original version of the bill stalled out and never made it past an initial introduction. There is hope that the reintroduction of this bill will gain more traction on Capitol Hill due to experience with difficulties entering into many transactions requiring notarization during the COVID-19 pandemic.
The goal of the SECURE Act is to enable remote online notarization for all licensed notaries in the country. The bill also focuses on security measures designed to protect the integrity of the notarial act such as multifactor authentication to confirm the identity of the signer, audio-visual recording of the notarial act, and the use of tamper-evident technology.
Senator Cramer expressed a hope that the experience of the pandemic will assist with efforts to modernize notarial acts. “The pandemic exposed several flaws and outdated methods used in the American economy, and the notary process is a prime example. Our bill would bring this process into the 21st century, allowing people to securely complete notarized documents remotely, just as they do with many other important forms.”
Senator Warner emphasized how the expansion of RON on a state by state basis has demonstrated how it can be successful nationwide. “I’m proud to introduce this bipartisan bill, which would permit nationwide use of remote online notarization, while requiring minimum safety and security standards, and provide certainty for interstate recognition of transactions completed with remote online notarization. While the COVID-19 pandemic presented a number of obstacles to essential tasks such as executing wills, completing financial documents, buying or selling a home, or purchasing or selling a car online, many states demonstrated how to effectively deploy this type of technology to meet the needs of Americans.”
The new SECURE Act has been endorsed by many industry trade groups and organizations such as The American Land Title Association (ALTA), the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR, and the American Council of Life Insurers (ACLI). There is optimism within the industry that this time the bill may gain some traction in Washington DC.
Notarial acts have traditionally been regulated on a local level by the states and there are currently 34 states that have already passed permanent RON legislation. Most of the RON laws passed in the states largely follow the Revised Uniform Law on Notarial Actions (RULONA) promulgated by the Uniform Law Commission. The Mortgage Industry Standards Maintenance Organization (MISMO) has also created uniform standards for the use of RON in real estate finance transactions. These standards along with RULONA have been used as a foundation for state laws and regulations enacting RON. ALTA has reported the use of RON increased 547% in 2020 with most of those transactions occurring in Florida, Texas and Virginia. As structured, the SECURE Act will set minimum standards for the use of RON. It will not prevent states from passing their own laws and regulations to govern the use of RON in their states that add to the minimum standards set under federal law.
The continued adoption of state laws supporting the use of RON will undoubtedly expand the use of this helpful technology for real estate finance transactions. However, even with state support of RON there are still issues that would be clarified with the adoption of a nationwide RON standard. These issues often arise when a property is located in a different state from where the remote notary is commissioned and located. There are also potential issues and confusion in some jurisdictions when out of state notarial language is utilized by remote notaries. These issues could be eliminated by a national standard and the pathway to increasing the digitization of the mortgage transaction could be made just a bit easier.
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