E-Signatures and Remote Online Notarization:
The Uniform Electronic Transactions Act (“UETA”) proposed by the Uniform Law Commission (“ULC”) in 1999 presented ways for states to effectuate electronic signatures with the same legal validity of wet ink signatures. At the federal level, the Electronic Signatures in Global and National Commerce Act (“E-SIGN”), was passed by Congress in 2000, authorizing the use of electronic signatures and notarizations for transactions between two or more parties in all jurisdictions where federal laws apply. UETA has been adopted by the District of Columbia, Guam, Puerto Rico, and every state except Illinois and New York. While the remaining two states, New York and Illinois, have implemented their own statues addressing electronic signatures, Washington enacted UETA effective as of June 11, 20201. These two states have enacted their respective comparable electronic signature legislation in lieu of adopting UETA.
Once the legal basis for electronic signatures was established, states began addressing the need to notarize electronic documents and remote online notarization. Today, electronic notarization is legally authorized in all states by E-SIGN and/or UETA. However, as of October 2020, only 29 states have laws that enable their notaries to conduct remote notarizations. The states that have implemented Remote Online Notarization (“RON”) statutes include: Alaska, Arizona2, Colorado3, Florida, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota4, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin. On March 5, 2020, Wisconsin enacted the Revised Uniform Law on Notarial Acts and became the twenty-third state to authorize notaries to perform remote online notarizations. On October 29, 2020, Pennsylvania became the twenty-ninth state to enact remote online notarizations or House Bill No. 2370 (Act 97)5. Now Pennsylvania notaries can begin to conduct RONs once they notify the Pennsylvania Department of State (DOS)6 of their intention to do so and identify the communication technology that they intend to use (which must conform to any standards that the DOS may establish).
In the 29 states that have already adopted RON statutes, documents executed and notarized remotely and electronically are valid and binding. Among the 29 states, some states, including the two Ballard states of Nevada and Minnesota, provide that the notary need not be physically located in the state of execution of the applicable party. We have notaries certified to perform RON in our Nevada office and Minnesota office who have successfully completed RON. However, some states like Maryland and Utah require the notary is physically located for RON in the state of execution.
Besides the aforementioned 29 states, nearly every state legislature has submitted a RON bill for consideration. In response to the COVID-19 emergency, the State of New York issued an Executive Order No. 202.7 stating that “any notarial act that is required under New York State law is authorized to be performed utilizing audio-video technology” provided that certain conditions7 are met89. This directive was originally effective through June 5, 202010 and has now been extended to March 16, 2021 by Executive Oder 202.711. According to the updated guidance issued by the New York Secretary of State, New York allows signatories to sign using electronic signatures in accordance with the New York Electronic Signatures and Records Act, provided that the notary witnesses the electronic signature.
In addition, the governor of Georgia issued an Executive Order 04.09.20.01 to suspend the purported requirement under Georgia law that notarial acts and witnessing must be executed in-person until April 8, 202112. The State Bar of Georgia suggests re-executing of certain legal documents such as a will, a trust instrument, or a power of attorney after COVID-19 when feasible13.
Also, Arkansas issued Executive Order 20-1214 on March 30, 2020, suspending in-person witnessing and signature requirements for notarization. This Order automatically expires when the state of emergency is terminated15.
The State of Delaware also issued the Eleventh Modification of the Declaration of a State of Emergency, authorizing notarial acts “by utilizing audio-visual technology (remote notarization),” provided that certain conditions are met16. The Executive Order also permits the notarization performed by a licensed Delaware attorney who is in good standing with the Supreme Court of Delaware. Subsequently, the Delaware Department of State issued a guidance stating that “there is currently nothing in Delaware statutes that prohibits an individual or business from using a remote notary from states who permit remote notarization. At this time, Delaware does not permit remote notarizations by Delaware notaries,17” but it also provides that the general public can use Notarize.com, NotaryCam, or any other provider that they may research and choose. The states with temporary authorization to perform RONs or expand their existing RONs are Alabama, Colorado, Connecticut, Delaware, Georgia, Illinois, Iowa, Maryland, New Hampshire, New York, Pennsylvania, Vermont, Washington18, Wisconsin and Wyoming. For more information regarding rules for each of these states, please refer to the below links to third-party resources.
In addition, on March 18, 2020, Senator Kevin Kramer, R-N.D., and Senator Mark Warner, D-Va., introduced legislation that would allow immediate nationwide use of RON in response to the COVID-19 outbreak. The Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (“SECURE”) would authorize every notary in the United State to perform RONs, requires tamper-evident technology in electronic notarizations and provides fraud prevention through use of multifactor authentication19. Under Senate rules, the bill would most likely be referred to the Senate Banking Committee, which must approve the bill before sending it to the Senate floor. As of March 23, 2020, House Representative Guy Reschenthaler, R-PA-14, also introduced a new bill to the House, H.R. 6364, to authorize and establish minimum standards for electronic and remote notarizations. Along with these efforts, national trade associations such as American Land Title Association (“ALTA”) and Mortgage Bankers Association (“MBA”) are pushing for a federal RON provision to be attached to COVID-19 stimulus bill(s). At this time, we are monitoring the future developments of the bills closely.
In response to the current development over the RON, Fannie Mae and Freddie Mac have issued guidance to address several policy areas to support mortgage originations, including power of attorney and acceptance of RON. The guidance links are listed below20.