E-Notarization

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E-Notarization Basics: The Legal Framework
American Notary, Issue 2007-#3

More and more states are enacting legislation to provide for electronic commerce and e-notarization, driving the need to ensure that ASN’s members have a good grasp of the fundamentals of being an electronic notary. Whether you choose to become an electronic notary or not, a sound working knowledge of e-notarization basics will be valuable to you.

Though this subject matter is complex, we’ll boil it down to the bare essentials that the average notary should know.

“UETA”
The Uniform Electronic Transactions Act was completed by the Uniform Law Commissioners of the National Conference of Commissioners on Uniform State Law in 1999. (Uniform laws created by NCCUSL are offered to states for voluntary adoption into state statutes.) UETA removed barriers to electronic commerce by establishing equal legal status between electronic transactions and signatures and those that involve paper. Nearly every state has adopted UETA, either largely unchanged or with some revisions. 

UETA defines “electronic signature” as: “…an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” This broad definition embraces the full spectrum of electronic signature types, including but not limited to a “click through I accept or reject” action, the signer’s typewritten name or other typewritten string of characters, a digitized signature captured by a signature pad and stylus, a video clip, a sound clip, or a digital signature/certificate. 

UETA also states that the electronic signature of a notary will satisfy statutory requirements for the notary’s paper-and-ink signature if the electronic signature, “…. together with all other information required to be included by other applicable law [i.e., the notarial certificate, seal information, commission expiration date, etc.] is attached to or logically associated with the signature or record.”

What this means:  UETA allows for document signers and notaries to sign electronic documents with any electronic sound, symbol or process that they intend to be their legal electronic signature. While there seems to be no notarial seal requirement under UETA, the seal’s importance for purposes of document authentication (generally required for notarized documents traveling overseas or occasionally, interstate) is unchanged. To address this in part, UETA states that all the notary’s information that is normally required on the seal or required to be written on the notarial certificate must be “attached” to or “logically associated” with his/her electronic signature or record. While technically, this allows notaries to simply type their certificate information (including signature and seal information) onto the electronic document, many questions remain about how e-notarization procedures can conform to existing state statutory requirements for notarization. For the average notary, more guidance is needed. 

“E-SIGN”
In June 2000, The U. S. Congress passed the Electronic Signatures in Global and National Commerce Act, or “E-SIGN.” E-SIGN was created to remove barriers to electronic commerce for interstate and international financial transactions. E-SIGN’s provisions overlap significantly with UETA’s and are designed to co-exist with the provisions of UETA. 

Like UETA, E-SIGN established equal legal status between electronic transactions and signatures and those involving paper. E-SIGN also states that the requirements for notarization and acknowledgment of a “record” (electronic document) will be satisfied if the electronic signature of the notary, along with all other required information (such as the notarial certificate and seal information), are attached to or logically associated with the signature or record.

What this means:  While both UETA and E-SIGN authorized notaries to perform electronic notarizations, the exact details of completing an electronic notarial certificate, and “attaching” it or “logically associating” it with the electronic document, were still unknown to the average notary. Any process would need to conform to existing practices and rules applicable to a paper-based notarial act. As the e-notarization legal framework continued to advance, other important concerns emerged, such as secure transmission of e-signed or e-notarized documents, authentication of the signer’s (notary’s) e-signature, and guarding against post-notarization document tampering.

“URPERA”
In 2004, NCCUSL approved the Uniform Real Property Electronic Recording Act, another model law offered for voluntary adoption by states. 

What this means:  While electronic recording of e-documents was already possible under UETA and (where applicable) E-SIGN, URPERA further clarified the authority of recording officials to receive, record and retrieve electronic land records and information. (To date, just a handful of states have actually adopted URPERA.)

NASS E-Notarization Standards
These standards, approved by the National Association of Secretaries of State in 2006, are offered to states for voluntary adoption. The NASS standards provide a level of detail about e-notarization standards that was not provided in UETA or E-SIGN.

Significantly, the NASS standards expand on UETA’s and E-SIGN’s definition of the notary’s electronic signature, by requiring that:

it is unique to the notary;
it is capable of independent authentication;
it is retained under the notary’s sole control;
it is attached to or logically associated with the electronic document,
it is linked to the underlying electronic document in a manner that any subsequent alterations to the document or electronic notarial certificate are detectable

What this means: The NASS standards address certain unique concerns about the security and reliability of electronic notarial acts, by promoting use of e-signatures that utilize more advanced technology than was contemplated by UETA or E-SIGN. 

They also indicate that, for electronic notarizations, the mere fact of the notary’s participation adds assurances about the transaction that go beyond the traditional assurances of a paper-based notarization. For example, notaries utilizing an e-signature that conforms to the NASS standards can thwart post-notarization fraud by making the document tamper-evident. But still more challenges posed by e-notarization remain. Specifically, how do current e-notarization technologies address the need for multiple notarial acts on a single document? How can the security and privacy of an electronic document traveling over the Internet be protected? Are there sufficient safeguards in place to prevent unauthorized use of the notary’s e-signature? 

State E-Notarization Laws, Rules or Programs
State laws, administrative rules or programs are the definitive authority for notaries wishing to conduct e-notarizations. States with specific laws, rules or programs have opened the door to actual e-notarizations, by removing doubts about how their notaries might proceed. All earlier bodies of law or model language (UETA, E-SIGN, NASS standards) laid a foundation upon which states could build their e-notarization requirements. States might borrow language from UETA or E-SIGN, for example, as well as use all or part of the NASS standards. They may draft completely unique language, as well.

At this writing (Nov 2007), the following states have enacted e-notarization statutes, or have administrative rules or structured programs in place allowing for notarization of electronic documents:

Arizona (statutes) Colorado (rules) Florida (statutes)
Kansas (program) Minnesota (statutes) North Carolina (statutes, rules)
Pennsylvania (program) Utah (rules)

These states have moved e-notarization from a concept to reality. While their efforts have produced a relatively modest number of actual e-notarizations, by example these pioneers have facilitated and accelerated the spread of e-notarization to all other interested states.

 

UETA - Uniform Electronic Transactions Act

UETA establishes the legal equivalence of electronic records and signatures with paper writings and manually-signed signatures, removing barriers to electronic commerce. UETA is offered for voluntary adoption by each state. States may opt to adopt the complete Act, or parts of it.

E-SIGN - Electronic Signatures in Global and National Commerce Act

The purpose of this act is to give county clerks and recorders the legal authority to prepare for electronic recording of real property instruments. URPERA is offered for voluntary adoption by each state. States may opt to adopt the complete Act, or parts of it.

Setting technology-neutral standards for secure and feasible implemention of electronic notarization. The NASS E-Notarization standards are offered for voluntary adoption by each state. States may opt to adopt the full standards, or selected parts.
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