AZ MBA eNotarization

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					The Evolution of eNotarization in the
                United States
                 Marc L. Aronson
                    President
United States and Pennsylvania Notary Associations
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• When did the U.S. courts first consider
  electronic transactions?

• 1869 (Howley v. Whipple)

• “It makes no difference whether…his [the notary] pen be a
  copper wire a thousand miles long…nor does it make any
  difference…[if] a more subtle fluid, known as electricity,
  performs the same office.”
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  • What constitutes a signature?
  • What is a “writing” with due
    consideration to the Statute of Frauds?
  • What constitutes acceptance of a
    contract?
  • What constitutes “notice”?
  • Among other issues…
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• Utah passed the Utah Digital Signature Act
    [U.C. §§46-3-11 to 46-3-104] in 1995

• Act defined digital signatures,
  public/private keys and certificate
  authorities

• Set regulations for digital certificates and
  certificate authorities (issuers of digital
  certificates)
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• Uniform Electronic Transactions Act
• Adopted by NCCUSL in 1999
• Passed in 46 states, D.C. and the Virgin Islands
• Exceptions : IL, NY, GA, WA
• Says if notarization is required, the requirement is
  satisfied if electronic signature along with
  information required to be included by other
  applicable law, is attached to or logically
  associated with the signature or record.
• This is an ‘overlay’ law
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  • Electronic Signatures in Global and National
    Commerce Act

  • Federal act passed in 2000

  • Also an ‘overlay’ law

  • A signature is a sound, symbol or process
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  • National Conference of Commissioners on
    Uniform State Laws (NCCUSL)
     » www.nccusl.org
  • American Land Title Association (ALTA)
     » www.alta.org
  • Mortgage Bankers Association (MBA)
     » www.mbaa.org
  • Mortgage Industry Service Maintenance
    Organization (MISMO)
     » www.mismo.org
  • Secure Identity Services Accreditation
    Corporation (SISAC)
     » www.sisac.org
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 • National Electronic Commerce Coordinating Council
   (NECCC)
    » www.ec3.org
 • Standards and Procedures for Electronic Records and
   Signatures (SPeRS)
    » www.spers.org
 • Organization for the Advancement of Structured
   Information Standards (OASIS)
    » www.oasis-open.org
 • Property Records Industry Association (PRIA)
    » www.pria.us
 • ABA’s eTrust Subcommittee-- eNotary Work Group
    » www.ermunro.com/enw
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         • Authentication

         • Repudiation

         • Standards

         • Interoperability

         • Security

         • Archiving
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• ABA’s eTrust Subcommittee-- eNotary
 Work Group
  » Notaries-General
  » Signature and Seals
  » Authenticity of Notarial Acts
  » Laws and Regulations
  » Technology and Security
  » Identification
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 • Arizona
    » Passed eNotarization law in 2001. Passed rules and
       regulations in June 2003
 • Colorado
    » Passed eNotary bill [H.B. 1300]
    » Passed rules six months later
 • Florida
    » Permits electronic notarization under UETA; has not
       passed or adopted any additional laws or regulations
 • Pennsylvania
    » Passed UETA in 1999, Passed eNotary bill in 2002. First
       eNotarization November 13, 2006
 • Texas
    » Title 1, Part 10 Department of Information Resources
    » Chapter 203, Management of Electronic Transactions and
       Signed Records
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Traditional Notarial Roles …
• Identity verification (not validation)
• Observation of willingness and awareness
• Ensuring absence of duress
• Taking acknowledgments; administering oaths and
  affirmations; certifying copies
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An electronic document ...

• Could be a paper document scanned into an
  image format

• Could be a document originally created on a
  computer
  »   Microsoft Word documents
  »   HTML (web pages)
  »   E-mail messages
  »   PDF
  »   TIFF
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An electronic signature …

• A sound, symbol or process used to imply
  consent
  » Text-based: a typed name at the bottom of
    an E-mail message
  » Digitized: an image of a handwritten
    signature attached to a document
  » Digital: a series of characters used in
    conjunction with a digital certificate
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     • Adobe
        » Not Internet based
        » Multi-step process
     • World Wide Notary/DigaSign
        » Internet based
        » Wizards to lead you through the process
        » Auto creation of electronic journal entry
     • DocuSign
        » Internet based
        » Proprietary
     • Simplifile
        » Proprietary
     • EDL
        » Proprietary
        » PKI free
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  • Hippocrates’ Rule
    » First, Do No Harm
  • Follow E-SIGN/UETA spirit
  • Preserve sanctity of contract law
  • Permit private-public partnerships to set rules
    of engagement
  • Most interested in transactional/document
    integrity
  • Don’t burden emergence of eTransactions
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Excessive regulation …
• Often involves a level of prescription not seen
  for ink/paper transactions
• Erodes E-SIGN & UETA uniformity and
  neutrality
• Creates legal uncertainty, which in turn leads to
  transactional friction & inefficiencies and higher
  costs
• Ultimately impedes adoption
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   Concerns for the Notary?
   • Notaries authenticate identities, NOT documents
   • No physical seals needed
   • Responsibility for the integrity of the transaction
      » Notary law
      » Notary bond
      » Errors and Omissions Insurance
   • Responsibility for the integrity of the document
      » Permanence
      » Accessibility
      » Security
   • A notary is a notary is a notary!
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   • Liability?
      » The Participants in the transaction?
      » The Notary?
      » The Notary’s technology vendor?
      » The Certification Authority?
      » The Registration Authority?
      » The Recorder?
      » The Recorder’s technology vendor?
      » Title companies an closing attorneys?
      » Who else?
      » What will the court(s) say?
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eNotarization
        One Gateway Center - Suite 401
         420 Fort Duquesne Boulevard
          Pittsburgh, PA 15222-1498
    Telephone/Fax on Demand: 412-281-0678
              Fax: 412-281-0321
            Orders: 1-800-944-8790

            Web: www.notary.org

       E-mail: maronson@notary.org