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Digital Closings Using RON Puts ‘Consumers in the Driver’s Seat’

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ALTA member Michael O’Neal, vice president of corporate underwriting
at First American Title Insurance Co.

Remote online notarization benefits and protects consumers by offering them safe and convenient options for executing legal documents online, ALTA member Michael O’Neal said during a virtual legislative hearing May 26 before the U.S. House Energy and Commerce Subcommittee on Consumer Protection and Commerce.

The subcommittee is considering the ALTA-supported Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2021 (SECURE Notarization Act), which 95 bipartisan cosponsors in the House and Senate. In the House, Reps. Madeleine Dean (D-Pa.) Kelly Armstrong (R-N.D.) have introduced H.R. 3962. Sens. Mark Warner (D-Va.) and Kevin Cramer (R-N.D.) have introduced S. 1625 in the Senate.

The SECURE Notarization Act would authorize every notary in the U.S. to perform RON and create national standards requiring use of tamper-evident technology, multifactor authentication of a signer and retention of an audio-visual recording of the notarial act. The bill would allow signers outside the U.S., such as military personnel and their families, to easily and securely notarize documents. The Secure Notarization Act complements existing state laws, while allowing states the flexibility and freedom to implement their own RON standards. It also follows a similar structure of complementary state/federal legislation, such as the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA).

There are 40 states that have enacted permanent statutes that approve the use of RON. However, the lack of national authority makes it harder to provide this valuable flexibility to those that need it the most, like servicemembers, overseas Americans, and underserved communities. O’Neal told the subcommittee that now is the perfect time for Congress to expand this closing option for consumers and bring additional certainty to the law of RON.

“We have the chance to give consumers greater freedom and choice in how to close on their next home sale or purchase, or when they refinance their home mortgage, while enshrining common sense safety and soundness into the closing process,” said O’Neal, who is vice president of corporate underwriting at First American Title Insurance Company, in written testimony submitted to the subcommittee. “When title companies and other financial service providers offer customers a digital closing option using RON, it puts the consumer in the driver’s seat, allowing them flexibility to execute documents based on their schedules without the need to take time off work or find a babysitter.”

Even before the pandemic, the title and lending industries began undergoing a digital transformation to provide consumers with convenient options when buying a home.

"One of these new tools is remote online notarization," O'Neal wrote. "The SECURE Notarization Act is a bipartisan bill that increases access to RON for consumers. Just like it sounds, remote online notarization takes the traditional notarial process and moves it online—allowing a signer to get a document securely notarized over a webcam or smart phone. Americans sign documents and engage in countless e-commerce transactions every day using electronic signatures thanks to Congress’s adoption of E-SIGN in 2000. Now is the time to do the same for notarizations."

Rep. Armstrong added, “The pandemic showed us that this is really something more than advancing technology, but can help people in a real way while still protecting notaries.”

Rep. Armstrong asked O’Neal what groups would benefit from nationwide use of RON. O’Neal said all consumers would benefit, especially those with health issues or need to social distance, anyone travelling and overseas service members.”

"RON saves Americans lost wages, time and travel costs. RON eliminates the need to make appointments, take leave from work, find a babysitter, or drive for miles to find a notary to conduct a real estate closing," O'Neal said. "This flexibility helps improve the closing experience for homebuyers. RON benefits members of the military who are deployed overseas. RON permits servicemembers to finalize important financial documents directly instead of having to rely on finding a military notary or executing a power of attorney before deployment. This lets their families more easily take advantage of favorable refinance or other transactions while deployed."

O’Neal informed the subcommittee that the SECURE Notarization Act would not:

  • Impede consumer choice.
  • Infringe upon state data privacy laws.
  • Impact state law on testamentary wills and trusts or the practice of law.
  • Favor specific technology or restrict the use of new and emerging advancements

The national minimum standards mirror Uniform Law Commission’s Revised Uniform Law on Notarial Acts and has three fundamental requirements:

  1. Remote notarizations would require the use of tamper-evident technology, so that third modified since the time of the notarization.
  2. The remotely located individual must be identified by the notary through personal knowledge, use of a credible witness, or multifactor authentication.
  3. The notary must create and retain an audio-video recording for 10 years unless another time frame (not falling below five years) is stipulated under state law.

O’Neal said these minimum standards make RON safer than traditional paper notarizations and endow them with superior evidentiary value.

He also touched on how the legislation would modernize notarial law ensure that notaries will continue to play their crucial anti-fraud role for future generations

“Notarization is a bedrock of our legal system, and has been for nearly all of American history,” O’Neal said. “The SECURE Notarization Act will help to ensure that this continues to be the case in the 21st century.”

O’Neal closed his oral testimony by sharing a story of how RON helped a service member close his transaction:

  • “I am stationed overseas in South Korea. My closing happened nearly 7,000 air miles away and 13 time zones different. Closing on the house would have been impossible without this option. Our dream house would have slipped away from us had we not been able to execute the buy remotely.”

ALTA CEO Diane Tomb said the association is grateful the subcommittee invited ALTA to testify about the importance of the SECURE Notarization Act. She also thanked O’Neal, one of the country’s leading experts on notarial law and practice, for appearing before the subcommittee.

“As the COVID-19 pandemic demonstrated, so much of what we previously thought had to be done in-person can be done safely and efficiently online—and the closing process is no exception,” Tomb said. “We are encouraged that the subcommittee is considering this important piece of legislation that will allow for immediate nationwide use of remote online notarization technology while also establishing robust minimum standards to ensure consumers are protected.”


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