Alison Lundergan Grimes Secretary of State Remote Notarization www.sos.ky.gov facebook.com/kysecretaryofstate @KYSecofState

Types of Notarization (1) Traditional Notarization Physical Presence Wet Signatures Wet Notarization (2) Electronic Notarization Digital Signature Digital Notarization (3) Remote Notarization Live Video Presence

Traditional Notarization Electronic Notarization   Presence Signature Notarial Act Traditional Notarization Physical Presence Wet Electronic Notarization Digital Remote Notarization Audio Visual Communication

Notarization & “Why do we care?” “Notarization helps provide confidence that transaction documents are actually signed by the persons named in the documents.” https://www.mba.org/ “State, federal and bankruptcy courts have invalidated mortgages and other documents due to defective notarizations.” www.oldrepublictitle.com

Remote Notarization Defined “With remote notarization, a signer personally appears before the Notary at the time of the notarization using audio-visual technology over the internet instead of being physically present in the same room. Remote notarization is also called webcam notarization or online [remote] notarization.” (www.nationalnotary.org)

What is a remote notary exactly? A Remote Notary is a legally commissioned notary public who is authorized to conduct notarizations over the internet via digital tools and a live audio video call. All notaries, no matter how they perform their service, must watch as someone signs a document. Historically, this has required that the notary and signer must travel to meet one another in-person where the notary serves as a witness during the signing event. However, changes in the law have enabled remote notarizations and created the concept of a Remote Notary.

Remote Notarization. Why do we care? 8 states have passed legislation 12 states proposed legislation this year Various stakeholders such as NASS, MISMO, ALTA, MBA etc. are drafting model standards/legislation because the industry is pushing for this innovation.

Goal of Remote Notarization Task Force NASS Remote Notarization Task Force Announced in April 2016, the Task Force is dedicated to promoting a greater understanding of the issues and policies surrounding remote/video notarizations amongst states. The task force is reviewing technologies that facilitate remote notarizations, tracking state activity and developing possible proposals for NASS consideration. Goal of Remote Notarization Task Force “To gather relevant information and help members better understand the remote notarization process”

Members of Task Force Co-Chair: Alison Lundergan Grimes, Kentucky Secretary of State Co-Chair: Mark Martin, Arkansas Secretary of State Hon. Connie Lawson, Indiana Secretary of State Hon. Paul Pate, Iowa Secretary of State Hon. R. Kyle Ardoin, Louisiana Secretary of State Hon. Matt Dunlap, Maine Secretary of State Hon. John Wobensmith, Maryland Secretary of State  Hon. Steve Simon, Minnesota Secretary of State Hon. Jay Ashcroft, Missouri Secretary of State Hon. Barbara Cegavske, Nevada Secretary of State Hon. Elaine Marshall, North Carolina Secretary of State Hon. Al Jaeger, North Dakota Secretary of State Hon. Robert Torres, Pennsylvania Secretary of State Hon. Luis Rivera Marin, Puerto Rico Secretary of State Hon. Jim Condos, Vermont Secretary of State

Uniform Law Commission Amendment to Notarial Acts Changes: The 2018 Amendment to RULONA authorizes notaries public to perform notarial acts in the state in which they are commissioned for remotely located individuals using audio-visual communication technology regardless of where the individual may be located.  This amendment is not limited to foreign located individuals; it extends the authority to any remotely located individuals. Purpose: This amendment was prepared in response to a rapidly emerging trend among the states to authorize the performance of notarial acts by means of audio-visual technology.

NASS Remote Electronic Notarization Standards In July 2017, NASS took on the charge of convening the appropriate parties to develop remote notarization standards that would enable remote notarizations that would protect the credibility of the process, help prevent identity fraud and provide accountability to the public in order to advance secure electronic commerce. In February 2018, the NASS members approved the Revised National Electronic Notarization Standards, to include remote notarization.

Timeline of Work July 2017 Resolution approved authorizing Task Force to develop remote notarization standards September 27, 2017 Task Force meets to discuss content of standards December 12, 2017 Task Force conference call to discuss draft standards February 19, 2018 NASS members approved Standards to include Remote Notarization April 2016 NASS Task Force on remote notarization convened August 23, 2017 Task Force Conference call to discuss development of standards November 20, 2017 Task Force conference call to discuss draft standards January 18, 2018 Task Force conference call to discuss draft standards

Status of E-Notarization in the United States

E-Notarization – Real Property Transactions Only New York Washington Electronic Notarization (19) Alabama Arkansas Arizona California Colorado Delaware Florida Iowa Kansas Maryland Nebraska New Mexico North Carolina North Dakota Oregon Pennsylvania Utah West Virginia E-Notarization – Real Property Transactions Only New York Washington Remote Notarization (9) Indiana (2019) Michigan (2019) Minnesota (2019) Montana (2015) Nevada (2018) Tennessee (2019) Texas (2018) Vermont (2019) Virginia (2011) Remote Notarization Montana Virginia

States that filed Remote Notarization Legislation in 2018: (12) California (pending) Colorado (postponed indefinitely) Florida (failed) Kentucky (failed) Louisiana (pending) Maryland (pending) Missouri (pending) Nebraska (postponed indefinitely) Ohio (pending) Oklahoma (pending) Pennsylvania (pending) South Dakota (pending) Remote Notarization Montana Virginia

Considerations of Remote Notarization Pros: Finding a Notary i.e. Faster Transactions Military & Overseas Transactions “After Hours” Transactions Safety of Individuals & Notary Officers Reduce Operating Costs More Accurate Transactions Cons: Security of Personal Information Coercion -recording the transaction serves as evidence of attribution and as a deterrence of those who see RON as a opportunity for criminal activity.

Policy Considerations Identity Verification Tamper Evident Technology Acknowledgements Vendor Neutral Regulations Promulgated by SOS UETA, URPERA, and RULONA Consumer’s Choice Interstate Recognition Identity Verification – this must include presentation of a photo ID, credential analysis, identity proofing, and a digital recording of the audio/video communication capturing the notarial act ALTA/MBA recommendation: Remote presentation of government-issued identity credential Credential analysis of that credential Identity proofing by means of knowledge based authentication or biometric factors. Examples of identity proofing including dynamic knowledge based authentication, public key infrastructure, and analysis of biometric data. The law should require use of tamper-evident technology to assure the integrity of an electronic document notarized remotely online. Acknowledgements – legislation must provide that acknowledgements that are performed online can be readily identified and distinguished from “in-person” acknowledgements Technology requirements should not be so specific as to favor one vendor over another. Nor should they be so restrictive that it impedes evolution of technology and way to improve security over time. Legislation should direct SOS in the promulgation of their regulations to implement the law to use standards developed by MISMO, NASS, etc. Areas for rulemaking authority include: Application, qualification, and authority for remote online notaries Electronic journal Notice regarding performance of notarial act Standards for performance of notarial act Procedures for remote notarixation Requirements or procedures to approve providers of communication technology Fees Record retention procedures and requirements Standards for third-party repositories for the retention of the audio-video recording of the notarial act The legislation should conform to UETA, URPERA, and to the maximum extent RULONA It is desirable to include a “papering-out” provision that allows an electronically notarized document to be recordable if printed out and certified by the notary to be a true and complete copy of an electronic original. Such a provision would allow recordation of electronic documents in jurisdictions that do not currently accept electronic recordings. Recognize that consumers have a choice in whether to use remote online notarization or not. Interstate Recognition:  U.S. Constitution's Full Faith and Credit Clause requirement that each state respect the "public acts, records, and judicial proceedings of every other state." Since Virginia specifically authorizes the extraterritorial use of remote notaries, the argument is that states outside of Virginia are constitutionally obligated to accept their validity. While this position seems compelling, it ignores the Constitution's Tenth Amendment guarantees of the rights of states to protect the interests of their own citizens. Until state laws are enacted that recognize the validity of an extraterritorially performed remote notarization or the U.S. Supreme Court decides the issue, red flags are raised whenever a notarization occurs in one state while the documents are being signed in a different state.

Other Considerations Witnesses Unauthorized Access Repository and Custodian Provisions Witnesses: If witnesses are required for the validity of certain instruments, the law should provide clarity and consistency with any statutes that require the use of both notaries and witnesses. The law should give guidance as to whether the witness must be in physical proximity to the signer or whether the witness may be remote. If remote witnessing is permitted, it may set standards for the identification of those witness similar to those required of the signer. If remote witnessing is permitted, it should define what it means to witness an electronic signature. Consider defining the act of remotely witnessing as hearing the signer make a statement to the effect that the signer has signed the electronic record. Unauthorized Access: Access to electronic notarial records, electronic signatures, and seal should be kept secure from unauthorized access or use. The law may consider granting access to the records to a title agent, settlement agent, or title insurer that has engaged the notary for purposes of a real estate transaction. Repository and Custodian Provisions: Notaries should be allowed to designate a third-party repository or custodian to hold the recording and electronic journal on their behalf.

So how do you prepare for remote notarization? Follow the requirements for the state in which the document is being executed. So far, every state that authorizes remote notarization but Montana requires notaries to either obtain a separate electronic notary commission or register to perform remote notarizations.

What types of technologies are out there? DocVerify Notarize NotaryCam Pavaso Safedocs SIGNiX These technologies will provide notaries with all the technology that is needed to perform remote notarization.

Megan Walton, Director of Business Contact Me Megan Walton, Director of Business 502-782-7439 Megan.Walton@ky.gov