A Diamond Anniversary A Persistent Evolution: Reinventing the American Notary

THE NATIONAL NOTARY
FEBRUARY 2017
Our lives and businesses will be purely digital. Our identities will be validated using advanced technological means.
And the world will get even smaller as we will communicate and interact with each other in unique new ways across borders and boundaries.
While it’s impossible to predict how technology will drastically alter our lives and commerce, it’s a fait accompli that
identities will become more verifiable using methods like
retinal scans, real-time DNA screening and knowledge-
based authentication. There will also be vast new forms of
personal appearance, as signers might appear for notarization’s via camera, hologram or virtual reality.
But as we forge ahead toward a paperless future in which
identity technology becomes more virtual and verifiable,
the fraud and imposture risks to every man, woman and
child will surge. The more our life, finances and health
exists in the cloud, the more emboldened criminals become
to steal and exploit who we are — on a massive scale.
That’s why notarization is so important. No combination
of technology today can replace the nuanced judgment of
an honest, impartial human being
to authenticate our most important transactions and render
them trustworthy.
As the decades roll on there will
likely be several levels of notarization for different transaction
types and risk levels, along with
varying methods of authenticating identity, intent, and consumer
confidence in the transaction.
Some of those methods might
involve the use of camera equipped drones to quickly
transport paper documents (in the rare occasions they
are needed) or operate as a secure method of independent
observation or verification.
Many industries and/or relying parties will expect you to
understand and evaluate the details of the documents you
notarize, which will give rise to a new variety of notarial
acts including verification’s of fact, authenticating signer
credentials and establishing a person’s representative
capacity, among others.
And as the demand for specialized U.S. Notaries increases,
all indications point to a future in which they become a
professional class analogous to their civil law counterparts. Like attorneys, risk managers and cyber security experts, Notaries will need to be highly educated, trained
and credentialed; and they will earn six-figure salaries
or more as they become the ubiquitous protectors of our
identities, rights and property.
Along with their elevated responsibilities, authority and
authentication expertise, Notaries will surely be called

upon more to testify in court proceedings when a transaction is challenged. But not as a defendant. They’ll be expert
witnesses who testify to the forensics of the identification
and the documents as an advocate for the transaction.
The Past is Prologue
As the NNA celebrates its diamond anniversary, we are
amid an unprecedented paradigm shift that is driving
the persistent evolution of Notaries into a new class of
professionals.
To forecast where the future is going, we only need to
examine the recent past. Just a generation ago, in the late
70s, Notaries in California were prohibited from using a
driver’s license or other identity documents to identify a
signer. They had to rely on personal knowledge or credible identifying witnesses. Physical IDs are now a national-norm and, when they were sanctioned as valid forms of
satisfactory evidence, Notaries had to relearn their craft.
And even that’s changing.
Today some states are evaluating the possibility of using
digital identity credentials on smart phones in lieu of
physical cards. In fact, it is within
the realm of plausibility that your
smartphone will serve as your
wallet, ID, car keys and house
keys, among other functions.
Examples like that are every
where. And while there’s still
much we don’t know about the
future, one thing rings true:
The demand for quality, trusted
Notary services is at an all-time
high, evidenced by the rapid
proliferation of national corporate compliance programs
and the growing public imperative to protect their
transactions.
And the growing expectations for the evolution of today’s
Notaries — in the form of better training, verifiable
credentials, strong ethics and diligent compliance — looms
no matter what industry you work in, who you work for, or
what clients you serve.
In the next several years, the stakes will rise. As the
world becomes ever more interconnected, the threat to
commerce will surge. Consumers will insist that more be
done to ensure the security and trust of transactions. At
the same time cultural and commerce-driven advancements in digital services will continue to disrupt — and
redefine — the very nature of business and how Notaries
perform their duties.
The Evolution of the ‘New’ Notary
One of the most sweeping trends affecting large numbers
of Notaries is the increasing demand for training, trusted
credentials and background screening. For nearly a

decade, a combination of government regulations, business needs
and consumer expectations has been
pushing Notaries to become better
educated and carry out their duties
with a higher standard of care.
That trend shows no sign of slowing
down.
Notary Signing Agents certainly
have felt this trend keenly. As
lenders worked to meet the requirements of the CFPB and other regulators, they began to insist that NSAs
maintain verifiable qualifications,
in the form of regular background
screenings, certifications and proof
of compliance with consumer
protection laws.
The most recent example of that
came last October when the American Land Title Association updated

its Title Insurance and Settlement Company Best Practices to
include recommended provisions for
vetting and overseeing NSAs (see
the December 2016 edition of
The
National Notary
).
ALTA officials expect a growing
number of title insurance and settlement service companies to implement
specific Best Practices, including a
requirement for regular renewals
and ongoing training.
The education expectations of the
mortgage industry now extend well
beyond knowing how to perform a
notarization properly. NSAs today
are expected to understand the
documents in a loan package, master
the legal and contractual requirements for protecting consumers’

personal and financial information
and much more.
But NSAs are not the only ones being
asked to become more qualified and
maintain a higher standard of care.
To improve customer service and
reduce potential liabilities, a growing
number of companies are creating
in-house programs to train and
oversee their staff Notaries.
One example is JPMorgan Chase &
Co., which created a company-wide
program to insure a consistent level
of on-going training and best practices for its 24,000 Notary employees.
The Auto Club of Southern California
took a similar step when it started
offering Notaries services as an
additional benefit to its customers,
and eventually created a centralized corporate
program to
coordinate the
commissioning
and education
requirements.
In the coming
years, more
companies will
implement
programs of
their own as
the value of their staff Notaries
grows, and state legislators might
become more amenable to enacting
education requirements because
of the growing demands of the
marketplace.
Notaries, driven by a constant need
to maintain consumer confidence ,
will need to evolve into something
very different than they are today.
Technology and Notaries
The most profound phenomena
pushing the industry forward is
the revolution in digital document
technology and online services. This
includes the growth of electronic
notarization and the emergence
of webcam notarization, which is
changing the way people view the
actual notarial act.

Electronic notarization a decade ago
was in its infancy, but with a culture
that now embraces paperless, electronic transactions, they are beginning to become more commonplace.
Most consumers enjoy the convenience of electronic transactions
because it allows the exchange of
information more quickly, easily, and
dependably than ever before. Electronic transactions also reduce costs,
create efficiencies, promote flexibility
and are more secure than paper-
based dealings.
The U.S. Consumer Financial Protection Bureau gave electronic notarizations a boost recently when it
endorsed fully electronic mortgage
closings to improve customer service,
efficiency, accuracy and to reduce
costs. That move has already spurred
wider usage of electronic notarization in loan closings.
Potentially the greatest change
maker for Notaries is the rise of
webcam notarization’s (see the June
2016 edition of
The National Notary
).
Even though only three states —
Virginia, Montana and Florida —
currently allow webcam notarization in any form, the potential
exists for it to leapfrog the adoption
of traditional electronic notarization, which still requires the face-to-
face, in-person meeting between the
signer and Notary. In addition, most
states still lack rules for eNotarization, inhibiting its widespread use in
interstate commerce.
On the other hand, webcam Notaries
in Virginia are allowed to notarize
documents for anyone anywhere in
the world.
In the mortgage industry alone,
Fannie Mae and Freddie Mac have
endorsed the technology along with
Quicken Loans and the Consumer
Financial Protection Bureau. Does
that mean it will come into widespread use within the next few
years? Time will tell. And as successive generations raised on mobile,
on-demand technology become
Notaries will need to evolve
into something very different than
they are today.

policymakers, they are likely to
see webcam notarization as the
preferred method, paving the way for
its universal adoption.
What The Future Holds
One prediction that came as early
as the 1970s read that, soon enough,
technological advances would bring
about the demise of Notaries and
notarization. But like all those hyped
doomsday prophecies that never
come to pass, what we’ve experienced
is exactly the opposite: Notaries and
demand for quality notarial services

has reached an all-time high.
The irony is that demand is being
driven by technology and all of the
vulnerabilities that come with it
for businesses, corporations and
consumers alike.
Still, there remains considerable friction between the Notary office as it
exists today and the realities of interstate and international commerce.
We live in a world where there are
56 separate Notary systems in the
U.S. and it territories. Businesses and

consumers alike chaff at the barriers
this reality poses to creating efficient,
cross-border transactions. But technology, demographics and market
place demand are combining to break
down the barriers brick by brick.
In the next few decades, Gen Xers,
millennials and even Gen Zers will
lead our country. We have already seen
the willingness of each successive
general to rethink and re imagine how
the world works. It’s more than likely
that they will rethink and reshape the
Notary’s place in society.
We are amid a
paradigm shift that is
driving the persistent
evolution of Notaries.
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