ALTA, MBA Develop Model Legislation for Remote Online Notarization

December 19, 2017

ALTA and the Mortgage Bankers Association (MBA) have collaborated to prepare model legislation that provides the framework for states to adopt an online remote notarization process.

Online notarization involves the use of audio visual technology and electronic methods to conduct a notarization. ALTA does not endorse online notarization, but wants to ensure any legislation that is passed is safe for consumers, that the transaction can be insurable and is technology neutral. Several states have already started considering online notary legislation and more are expected to do so in 2018. If adopted, the model legislation would create legal certainty across the country from a uniform and consistent framework that is based on a common set of core principles.

The model law is based largely on a 2017 statute enacted in Texas that was emulated in Nevada. These laws gave remote online notarizations the same legal recognition as in-person ones. The Texas law was the result of robust debate and negotiation of various perspectives on this issue, including policy makers, state and national industry and consumer groups.

Additionally, the model bill is like the Texas and Nevada statutes in three other ways:

  • First, to protect against fraud, it requires the Secretary of State to promulgate rules to implement data standards and requirements related to credential analysis, consumer identification, data retention, privacy, security and other items. In fact, the Mortgage Standards Maintenance Organization (MISMO), has already convened a working group to produce suggested standards for Secretaries of State, to which the National Association of Secretaries of State has been invited to participate.
  • Second, the model incorporates the principle of consumer optionality. No consumer would be forced to choose to close their loan using remote online means.
  • Third, the model bill does not embrace technology standards specific to any one proprietary system. In other words, no single company would possess a monopoly on the state’s approved technology.

ALTA and MBA worked with the most informed notarization experts—staff at their member companies—to produce the model. The associations also received input from nationally recognized legal experts retained for this project, federal policy makers at the government housing programs, the National Association of Secretaries of State and the Uniform Law Commission (ULC).


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