Thoughts on New York Senate Bill S4352B
Finally, online notarizations are here! In fact, electronic notarizations have been here for some time but our experience has been rarely used. We’re very excited to see where this technology is going to take us. Online notarizations have been legal for some time in a few other states and can be vital during states of emergency like the current pandemic. But there are some issues that this bill doesn’t address.
1. Are the fees new or updated for online notarization? With new software required and more time demanded for preparing clients to use the technology, the notarization fee should be increased. Right now, for an in-person notarization in the state of New York, a notary is only able to charge $2. Connecticut permits a $5 fee; in California, the fee is $15. Considering the increased responsibility and new requirements, a notary should be able to meet their increased costs with an increased fee. Other states have instituted greater fees for online notarizations: $25 in Texas, for example. The new demands on a notary agent’s time and resources include uploading documents, verifying identities and identification documents, and recording information in addition to administering oaths, executing documents, and executing the notarization: this can make a simple notarization take thirty minutes or more. And that doesn’t include time spent helping clients prepare their devices and applications. Online notarizations create a greater margin for error, making errors and omissions insurance more necessary and thereby increasing operations costs for notaries. Online notarizations create a number of new or increased costs for notaries, and the bill fails to mitigate those costs by permitting fee increases.
2. Each state has its own requirements for a notarization. Will the New York bill require the signer to be in the same state as the notary? Texas and Virginia do not require that the signer is in the same state. In fact, a signer can be outside of the U.S. and still complete an online notarization, which is fantastic for anyone working abroad during COVID-19. Will New York’s bill keep pace with those enacted in other states?
3. Is Knowledge-based authentication discriminatory? Knowledge-based authentication (KBA) is a fairly new technology that uses a signer’s credit history to confirm their identity. As users will need to have a state-issued identification card, be at least 18 years of age, and have a credit history, it may disqualify many Americans trying to complete an online notarization. In addition, users completing a KBA will be required to answer five identity-verifying questions in two minutes. Is that enough time for older adults and people with certain disabilities? In the rare event that a KBA is proven to have been fraudulently completed, will notary agents be liable?
4. Mandatory digital stamps or certificates are problematic. Many of the companies distributing online notarization software require a digital certificate or digital stamp to verify notary agents’ qualifications. These verifications can cost between $100 and $500 and are necessary before a notary can use the platform. Other states are approaching this verification differently. Florida has instituted a state-administered certification process, for example, with applications, tests, and certifications completed online. And what steps are being taken to protect the privacy of notaries completing these certifications? Stamps can include not only dates and times, but also such information as a notary’s internet protocol (IP) address, name, county, and commission number.
5. Will there be different record-keeping requirements for online notarizations?In New York State, a notary is not required by law to keep a journal or take thumbprints relative to completed notarizations. Will this be the same for electronic notarizations or online notarizations? There are certainly privacy and confidentiality issues related to increased record-keeping, as well as questions regarding the state’s authority to maintain these kinds of records. If records of online notarizations are kept, will they include:
Users’ IP addresses
Users’ email addresses
Users’ physical addresses
Users’ Identification documents
6. Will there be new insurance requirements?
In some states, notaries public are required to have a bond for their license; New York State does not (many companies consider it good practice to have this additional insurance, anyway). Will it be the same with online notarizations, which carry very different security issues?
7. How will new software requirements work?
There are only a handful of software companies that have the ability to host online notarizations, especially when a KBA is required. These companies require costly licenses. This is an opportunity for blurred lines between business and state law. Will the state require notaries to use a particular software?
8. Will video records be required?
While most states completing online notarizations require a video recording of the execution, all that is required for in-person notarizations is that the signer(s) and the notary be physically in the same location. Will the state require notaries to keep a recording of online notarizations, and if so for how long? If or when a notary’s commission expires or they retire, what happens to archived recordings? Will these records be stored with the county clerk or another agency?
9. Will notarial certificate language change?
As of right now, the notarial certificate language is very clear per the county clerk's office. Will there be specific language required for online or electronic notarizations? In states such as Florida, the notary needs to select if the notarization is in person or online.
While we are in support of remote online notarizations and their clear health and safety benefits during the pandemic, there is an abundance of unknowns. If these issues aren’t addressed now, a window could remain open for confusion and delay at best, and fraud and corruption at worst. We eagerly await the state’s response to the many unanswered questions about online notarizations.