I read in the news this morning that Minnesota will enact new notary law on January 1 allowing notaries public to notarize documents electronically, for people who aren’t right there in the notaries’ physical presence.
What? Notaries can do that?
In Minnesota, starting next Tuesday, yes. Governor Mark Dayton signed the “Revised Uniform Law on Notarial Acts” on May 20. (You can read the original bill here, and enjoy the fact that Minnesota bills come with summaries, telling us in plain English what each section of the bill does—LRC, take note!) Minnesota Statute 358.645 lays out the definitions and rules for remote online notarial acts:
- Remote online notary publics (shall we call them RONPs?) must already be regular notaries in Minnesota and apply to the Secretary of State for authorization to notarize online.
- RONPs must be in Minnesota when they apply their electronic seal, but they can notarize documents for people anywhere in the U.S.
- RONPs may notarize documents for folks overseas, but the documents need to relate to a proceeding or property in the U.S. or “a transaction substantially connected to the United States.”
- Among other documentation, RONPs must “create an audio and video copy of the performance of the notarial act” and preserve that record for at least ten years.
- To get the notary seal, signers must be personally known to the notary or must present government-issued credentials and answer at least four out of five personally identifying questions, each with at least five answer choices.
- The principals’ signatures and the notaries signatures and seals are all electronic. The software that applies the notary seal must also apply code that will signal whether any changes are made to the document after the notarial act.
Numerous vendors provide the software to make remote online notarization possible: DocVerify, DocuSign, Notarize.com…. Virginia was the first state to authorize remote online notarizing, in 2012. Montana, Texas, and Nevada followed. Minnesota was one of five states to pass legislation this year to join the RONP crowd.
South Dakota almost joined them this year. Representative Tim Johns (R-30/Lead) and Senator Craig Kennedy (D-18/Yankton), two of the sharper legal minds in the Legislative drawer, sponsored 2018 House Bill 1170 last winter. As Rep. Johns explained in House Judiciary, allowing remote online notarization would save a lot of time and legal expense for folks buying or selling property far away. Absent RONP, Rep. Johns said he has to find someone who can show up on clients’ behalf at remote sites and arrange power of attorney.
Governor Daugaard sent advisor A.J. Franken to testify against HB 1170 in House Judiciary, not because of any hazards of online notarizing itself but because of some duplicative drafting and because it would’ve cost the Secretary of State’s office $140,000 to update its software. Rep. Johns said he was already amending the bill to address cost concerns and would save consumers money. Rep. Tona Rozum (R-20/Mitchell) heartily endorsed catching up with the technology other states are adopting, and no one in House Judiciary spoke or voted contrarily.
The bill sailed through the House but then lost momentum in Senate Judiciary, even though Senator Kennedy testified that remote online notarizing would bring South Dakota into the 21st century and allow us to use our own notaries more often instead of relying on notaries in other states. Mega-lobbyists Matt McCaulley and Roger Tellinghuisen rang in with concerns from the Land Title Association and county officials about fraud and drafting; Tellinghuisen offered to help draft better legislation “in the off-season.” HB 1170 survived Senate Judiciary but was tabled (i.e., killed) in the Senate on a unanimous vote.
Alas, the off-season may have brought more delay. With Tellinghuisen in attendance, the South Dakota Electronic Recording Commission (which includes land titlers and registers of deeds) recommended in October that the Legislature hold off on remote online notary legislation until 2020, to “give enough time to research various other states’ laws and the Model Acts that have been developed as well as give the newly elected Secretary of State time.” (What? We elect a new Secretary of State, and innovation has to stop because he’s a slow study?) But keep an eye out: Rep. Johns and Sen. Kennedy will both be back in Pierre, so perhaps they can educate Secretary of State-Elect Barnett faster than local officials expected and get remote online notarization off the ground in South Dakota.
It’s about a generation past the time when SD should catch-up on e-commerce. (Wasn’t DSU’s mission supposed to help the state do that?!) It’s shocking it takes a near 70-year old to lead the way – to debunk “wet signatures”. Wet signatures, like electronic signatures are subject to forgeries. Detecting fraud via an electronic signature leaves electronic tracks that are harder to circumvent, thus easier to catch and prosecute. Since much of SD’s economy revolves around exploiting non-residents (the trust business, land transactions, etc.) there is a huge case for streamlining efficiencies to serve those so exploited. The land titlers and deed registers are guardians of the past – revoking progress at every step.
“Each progressive spirit is opposed by a thousand mediocre minds appointed to guard the past.” https://en.wikiquote.org/wiki/Maurice_Maeterlinck
South Dakota can ill-afford waiting and over-studying. Few of us write checks any more (a contract, a promissory note). The old-retired legislative folks need to learn from their grandkids and get with the times.
Disagree. After serving as a Notary in another state (and the District of Columbia), I can’t imagine administering an oath electronically. There’s nothing like looking a signer in th eye, looking at their documents of identity and swearing them.
Here comes da fraud !!
Annette Bosworth’s wet signatures were’t worth the paper they soaked. As John says, there seems to be no comparative disadvantage in potential forgery to balance the comparative advantage of convenience of remote online notarization.
Buckobear, does looking the signer in the eye via Skype, looking at the documents online, and seeing that the signer is able to answer at least four security questions not provide as much security as the in-person option?
Excellent quote, John. “Each progressive spirit is opposed by a thousand mediocre minds appointed to guard the past.”
Let me add, “If you have no faith in your ability to tweak a new process, just wait and watch what more able brains accomplish.”
…or, in this case, wait and watch more able states accomplish this technological innovation, and then watch our lawyers and real estate agents and businesspeople catch heck every time they try to make a deal with someone in Minnesota or Texas or Virginia: What, you don’t have an online notary law? We have to send someone to your Sioux Falls office just to sign a paper? Good grief—I thought South Dakota was supposed to be an easy place to do business.