2019 report - maryland...- that the secretary of state should have the authority to suspend a...

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MARYLAND REVISED UNIFORM LAW

ON NOTARIAL ACTS (RULONA)

WORKGROUP

2019 REPORT

Assistant Secretary of State, Kathleen M. Smith, Chair

Division Administrator, Michael P. Schlein, Co-Chair

Submitted to the Honorable John C. Wobensmith, Secretary of State

Contact: Michael P. Schlein

410-260-3863 | [email protected]

October 28, 2019

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Table of Contents

Acknowledgements 3

Roster of Members 4

Executive Summary 7

Introduction 10

Workgroup Observations 11

Subgroups and Findings 11

Subgroup 1 11

Subgroup 2 11

Subgroup 3 12

Subgroup 4 14

Recommendations 15

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Acknowledgements This 2019 report of the Maryland Revised Uniform Law On Notarial Acts (RULONA) Workgroup

is the result of hard work, valuable input, and dedication from numerous stakeholders. Legislators,

state government representatives, industry, vendors, Information Technology experts, Notaries

Public and consumers. The Workgroup members generously shared their time and talent and

provided a thorough examination and study of the subject and provided insights and feedback.

Their participation in the RULONA Workgroup as well as their feedback, suggestions, and

recommendations were welcomed and extraordinarily valuable for the Maryland RULONA

Workgroup report. The completion, timeliness, and comprehensiveness of this report would not

have been possible without their active participation and support.

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Roster of Members The Notary Workgroup was composed of 24 members, including Legislators, state government

representatives, industry, vendors, Information Technology experts, Notaries Public and

consumers. The Chair was appointed bySecretary of State John C. Wobensmith.

Kathleen M. Smith, Assistant Secretary of State

Chair

Office of the Secretary of State

Michael Schlein, Co-Chair, Division Administrator

Charities & Legal Services Division


Lance Schine, Deputy Secretary

Department of Information Technology (DoIT )

Clerk Marilyn Bentley

Clerk of the Court

Baltimore City

Toby Musser

CEO

MNS Group

Penny Reed

SVP Strategic Engagement and Financial Reform

Wells Fargo

Denise Pope

VP Branch Administration

Tower Federal Credit Union

Kenneth Krach

Administrative VP and Senior Counsel,

M &T Bank

Cody Corcelius

Chief of Staff for Chairman Sen. Bobby Zirkin

Richard W. Metzgar

House of Delegates

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Lydia Williams

Program Manager, Guardianship, Legal Services and Elder Abuse Programs Department of Aging

M. Clare Schuller, JD

Progressive Title Corporation

Jean Quattlebaum

General Manager

Monument Sotheby's International Realty

John Nicholas (Nick) D'Ambrosia

Long and Foster

Chair: Maryland Real Estate Commission

Michael Kasnic,

Executive Director

Maryland Real Estate Commission

Richard Adams, JD

Rosenberg Martin Greenberg, LLP

Frieda M.A. McWilliams

Dir of Admin., MD Dept. of Labor, License and Regulation, Office of Financial Regulation

Katherine Connelly

Consumer, Notary Public

William A. O’Connell

First American Title Insurance Company

Vendors:

Michael Adam Chodos

General Counsel, Senior VP

Notarize:

C. Richard Triola

Founder, CEO

NotaryCam

Bob Rice

CEO

World Wide Notary:

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Office of the Attorney General

Josaphine Yuzuik

Assistant Attorney General


Marquita Lewis

Notary Officer and Notary Public

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Executive Summary

Background and Overview

The Revised Uniform Law on Notarial Acts (RULONA) Workgroup was established in response

to recommendations to review RULONA made during the 2018 Notary Workgroup. The purpose

of the RULONA Workgroup was to study, review, and make recommendations about the entire

RULONA body of work and determine its applicability, if any, for the State of Maryland. The

goal of the RULONA Workgroup was to study and determine if RULONA should be considered

for adoption, in part or in full, or rejected in the State of Maryland. It was noted that the July 2018

revisions to RULONA contained inclusion of Remote Notarizations.

Following the passage of Senate Bill 678, during the 2019 Maryland Legislative Session, which is

effective October 1, 2020, the Workgroup was advised the three (3) documents to be considered

include: the RULONA document, SB678, and the 2018 Notary Workgroup recommendations to

ensure they are aligned with recommendations from the 2018 Notary Workgroup and identify

amendments, if any, applicable to SB678. The Workgroup was assured that recommendations

would be presented to the Secretary for consideration and may be used in the next Session to

propose amendments to SB678, as appropriate.

The Workgroup was composed of a diverse group of stakeholders from a variety of industries and

State Agencies. Invited members of the Workgroup included:

Maryland Circuit Court Clerks’

Association

Maryland Dept of Information Technology

Maryland General Assembly

Maryland Office of the Attorney General

Other interested departments

Maryland Land Title Association

Maryland Circuit Court Clerks’

Association

Maryland Mortgage Bankers and Brokers

Association

Maryland Bankers Association

Maryland Association of Realtors

Maryland Real Estate Commission

Maryland State Bar Association

Consumer/Notary

Guardianship Attorney

Elder Law Attorney

Disability Rights Attorney

Estate and Trust Attorney

Remote Notary Industry Vendors

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Purpose and Goal

Purpose: The purpose of the Revised Uniform Law On Notarial Acts (RULONA) Workgroup is

as a follow up to the discussions begun during the 2018 Notary Workgroup. The purpose is to

study, review, and make recommendations about the entire body of work and determine its

applicability, if any, for the State of Maryland.

After the passage of SB678 during the 2019 Maryland General Assembly Legislative session, the

Workgroup included a review of SB678 to study, review, and make recommendations.

Goal: To study and determine if the Revised Uniform Law On Notarial Acts (RULONA) should

be considered for adoption, in part or in full, or rejected in the State of Maryland.

After the passage of SB678, the Workgroup added the goal of considering amendments to SB678.

Specific Findings:

Subgroup 1 determined:

- That Sections 1-8 of RULONA were sufficient and incorporated the suggestions of the 2018

Notary Workgroup. No changes should be made to these sections of RULONA as adopted

into Maryland law.


- That a notary should be allowed to charge up to $25 to perform a notarization; increasing it

from $4 per notarization which is allowed under current law.

- That the cost to become a notary must increase because of the increased education and testing

requirements resulting from the passage of SB678 during the 2019 General Assembly.

- That a stepped single license process before acting as a remote notary was recommended.

- That concerns exist about how to protect the public from rogue notaries.


- That the law should be amended to allow a notary to make their work address public

information instead of their home address.

- That an expressed reference to the Maryland Personal Information Protection Act should be

included in notary law.

- That a notary public should be able to successfully demonstrate the ability to conduct remote

notarizations before being authorized to do so.

- That the Secretary of State should publish a notary’s status. That Remote notary technology

vendors should be required to check the Secretary of State’s published list of a notary’s status

to determine the notary is in good standing before allowing a remote notarization to proceed.

- That the Secretary of State should have the authority to suspend a license within 10 days of a

conviction or release from incarceration.

- That the Secretary of State should provide a minimum standards document, or checklist, to

create a baseline uniformity for Senators to use when approving applications.

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- That the infrastructure of the notary division must be fully modernized, staffed, and funded to

effectively regulate SB678 when it takes effect.

- That stronger enforcement and education of notaries is necessary. SB678 contains insufficient

provisions.

- That Errors and Omissions Insurance should not be required.

- That, while recordkeeping is satisfactorily addressed, a driver’s license number or

identification number is another strong indicator of positive identification. The Secretary of

State could allow for this to be a method of recordkeeping by regulation.

- That the notary application fee is too low.

- That the Secretary of State should create materials that provide guidelines to protect notaries

from fraud and identity theft.

- That a clearer process should be created to change a notary’s name. The Notary Handbook

should be updated to include this process.

- That the fee that a notary can charge for a notarization should be increased.

- That a clearer process should be created to change a notary’s name. The Notary Handbook

should be updated to include this process.

Funding Required

The Workgroup concluded that funding is needed to modernize the infrastructure: database and

website as well as increasing the processing and investigative staff. The Workgroup concluded

that the Secretary of State should continue to use the budget process to seek additional funding.

The Workgroup expressed urgency for the Office of the Secretary of State to receive the requisite

funding to effectively and efficiently implement and administer the new notary law, as prescribed

by SB678.

SB678 requires that Notaries receive education and testing before they may apply to become a

Notary and before they apply to renew their Notary Commission. This new provision requires the

Secretary of State obtain a vendor to provide education and testing and track the results to

effectively administer the Notary Public law.

SB678 requires that Notaries notify the Secretary of State before conducting a remote notarization.

The Secretary of State must develop a process and standards for information that must be included

in the notification, including, but not limited to which remote notarization vendor and technology

the Notary Public intends to use and whether or not the Notary Public has been trained to use it.

Conclusion and Recommendation

The Office of the Secretary of State must be adequately funded and staffed to modernize its

technological infrastructure and effectively, efficiently, and correctly implement and administer

the requirements of SB678.

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Introduction The Revised Uniform Law on Notarial Acts (RULONA) was promulgated by the Uniform Law

Commission in 2010. In 2018, amendments to RULONA were approved and recommended for

enactment in all of the participating states. The amendments addressed notarial transactions

conducted using audio-visual technology in response to market forces from technology vendors

and real property stakeholders. The use of audio-visual technology in notarial transactions, known

as Remote Notarizations, became a rapidly emerging trend authorizing the remote notarizations.

Historically, an individual was required to physically appear before a Notary Public. However,

technology and commercially available identification services have made it possible to perform

notarial acts for persons who are not in the physical presence of a Notary Public1. The 2018

RULONA amendments all address the use of remote notary technology.

Remote Notarization is being promoted by the vendors as well as the Mortgage and Title

industries. The impact of Notarial Acts is far more reaching than these industries. Notarial Acts

include other critical documents such as Guardianships, Wills, Medical Powers of Attorney,

HealthCare Proxies, etc. When considering the impact of RULONA and Remote Notarizations, it

is critical to consider vulnerable populations who are easy prey for scam artists, including but not

limited to the frail elderly and developmentally disabled adults.

Topics that were considered by the Workgroup included:

Comprehensive review of RULONA

2018 Notary Workgroup recommendations

Comprehensive review of SB678

We are keenly aware of the weight and impact of the Public Trust balanced with the interest of

emerging technologies in a global marketplace. We are obligated to protect the citizens of

Maryland and take this responsibility to heart in carefully and comprehensively studying

RULONA, and ultimately SB678, each of which include Remote Notarizations. Remote

Notarization is a new concept, while the scope is yet unknown because it’s neither been

adequately vetted, tested, nor adjudicated, we fully anticipate residual liabilities will be placed

upon the Office of the Secretary of State. This movement has been spearheaded by private-sector

stakeholders who are not entrusted with the Public Trust of the citizens of Maryland, as we are.

Prior to the RULONA Workgroup, discussions and recommendations made by the 2018 Notary

Workgroup were based on a review of the current law. The current law will cease on October 1,

2020, when SB678 becomes effective.

In short, for the reasons cited above, the RULONA Workgroup was convened and representatives

from a variety of stakeholders sectors were invited to participate in the study. With the passage of

SB678, the study was expanded to include a study of SB678.

1 Uniform Law Commission: National Conference of Commissioners on Uniform State Laws- 2018 RULONA

Summary

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Workgroup Observations The Workgroup met monthly from March to September 2019 for a total of seven meetings over a

seven month period. Subgroups were established and met monthly between each regularly

scheduled meeting and reported their findings, an opportunity for an in-depth discussion followed

each monthly report.

The Workgroup carefully considered the findings and discussions prior to making proposed

recommendations. Each meeting was open to the public to allow community members to provide

expertise and offer suggestions.

Subgroups and Findings Subgroups

Subgroup 1: RULONA Sections 1-8



Subgroup 4: RULONA Sections 25-33.

Subgroup Findings

SUBGROUP 1

The Subgroup 1 was established to study sections 1-8 of RULONA and determine if they

sufficiently addressed the recommendations of the 2018 Notary Workgroup. These sections

contained definitions, applicability, authority to perform notarial acts, requirements for certain

notarial acts, personal appearance requirements, identification of individuals, and the authority to

refuse to perform a notarial act. For reasons previously explained, the Subgroup was tasked with

studying the related sections of SB678.

The Subgroup determined that the sections of RULONA were adopted almost word for word in

SB678. The Subgroup determined that RULONA and SB678 sufficiently addressed the

recommendations made by the 2018 Notary Workgroup. No changes were recommended to

either Sections 1-8 of RULONA, nor the related sections of SB678.

SUBGROUP 2

The Subgroup 2 was established to study sections 9-16 of RULONA and determine if they


contained how to authorize a signature if an individual is unable to sign, notarial acts in this state,

notarial acts in another state, notarial acts under the authority of federally recognized Indian

tribes, notarial acts under federal authority, foreign notarial acts, notarial acts performed for

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remotely located individuals, certificate of notarial acts, and short form certificates. For reasons

previously explained, the Subgroup was tasked with studying the related sections of SB678.

The Subgroup determined that the 2018 Notary Workgroup recommendations related to observing

cybersecurity best practices, identification of a signer, and recordkeeping requirements were

sufficiently addressed in RULONA and SB678.

The Subgroup focused attention to the funding needed by the Office of the Secretary of State to

implement the new law. The Subgroup recommended that the Secretary of State should seek

funding using the budget process.

The Subgroup addressed a question regarding increasing the fee to become a Notary Public. The

Subgroup understood that an increase to the application fee is not practical in the near term.

Further discussion focused around the 2018 Notary Workgroup recommendations related to the

fee a notary can charge for a notarial act whether a supplemental application should be required to

perform remote notarizations, and how to establish requirements to protect the public by

mitigating the harm caused by likely rogue notaries.

Subgroup 2 concurred that a Notary Public should be allowed to charge a fee up to $25 per

notarization. This recommendation corresponds to the original text of SB678, but not the enacted

version. The Subgroup did not differentiate between a fee up to $25 that may be charged by a

traditional notary and remote notary

Subgroup 2 concluded that a notary applicant should not be required to apply for an additional

license to perform remote notarizations. A “stepped single license” was recommended, wherein

the Office of the Secretary of State will track Notaries who are eligible to perform remote

notarizations.

The Subgroup was unable to recommend how to safeguard the public from rogue notaries abusing

remote notary technology. The Subgroup concluded that neither RULONA nor SB678 provides

guidance to protect the public but is concerned that abuse may occur. The Subgroup concluded

that training related to remote notaries needs to clearly convey that notaries can refuse to perform

notarial services if they have concerns. This conclusion implies that eligible notaries intending to

perform remote notarizations should receive training to perform remote notarizations.

SUBGROUP 3

The Subgroup 3 was established to study sections 17-24 of RULONA to determine if they


contained topics related to the notary’s official stamp, stamping device, recordkeeping

requirements, notification regarding performance of a notarial act on electronic records, selection

of technology, acceptance of tangible copies of electronic records, commission as a Notary Public,

qualifications, examination of a Notary Public, grounds to deny/refuse to renew/revoke/suspend/

condition the commission of a Notary Public, and a database of Notaries Public. For reasons

previously explained, the Subgroup was tasked with studying the related sections of SB678.

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The Subgroup determined that the 2018 Notary Workgroup recommendations related to allowing

the Office of the Secretary of State to post enforcement activities regarding education and testing

requirements of all notaries to take a class and pass a test were addressed in RULONA and

SB678. The Subgroup also determined that a recommendation to identify a Notary’s seal as a

public seal as defined in the 8-607 in the Criminal Law Article was sufficiently addressed in

SB678.

The Subgroup determined that the 2018 Notary Workgroup recommendation to allow a Notary

Public to use their primary business address as the publicly available address to limit public

access to a notary’s home address was not included in SB678. The Subgroup recommended that

if the Notary Public does not provide a business address, the home address would become the

publicly available address.

Subgroup 3 recommended that SB678 should be amended to include an express reference to the

Maryland Personal Information Protection Act. The Personal Information Protection Act (PIPA)

was enacted to ensure that Maryland consumers’ personal identifying information is reasonably

protected, and if it is compromised, they are notified so that they can take steps to protect

themselves2.

This Subgroup determined that a separate Commission should not be required to perform remote

notarizations. However, the Office of the Secretary of State should create a mechanism to

distinguish a notary authorized to perform remote notarizations from a traditional notary.

Subgroup 3 urged the Office of the Secretary of State to publish notaries’ statuses i.e. in good

standing, suspended, revoked, etc. Remote notarization technology providers should be required

to check the status list prior to allowing a remote notarial act to occur to confirm that a Notary

Public is in good standing with the Office of the Secretary of State. It was asserted that this could

be accomplished by the remote technology vendor writing code to check the published list of the

Office of the Secretary of State on their website before a remote notarial act is allowed to proceed,

assuring that the Notary Public performing the remote notarial act is in good standing.

The Subgroup also made two recommendations regarding enforcement measures:

1. The Office of the Secretary of State should have the power to order the suspension of a

license within 10 days after the conviction or within 10 days following release from

incarceration as a result of conviction; and

2. The Office of the Secretary of State should create and provide a minimum standards

document, or checklist, for use by Senators to provide a uniform standard used when

evaluating and making a determination about a Notary Public Applicant’s application.

SUBGROUP 4

2 Office of the Attorney General: http://www.marylandattorneygeneral.gov/Pages/IdentityTheft/businessGL.aspx.

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Subgroup 4 was established to study sections 25-33 of RULONA and determine if they


contained prohibited acts, validity of notarial acts, rules, notary public commissions in effect,

savings clause, uniformity of application and construction, relation to electronic signatures in

global and national commerce act, repeals, and effective date. In addition to these sections of

RULONA, this Subgroup was tasked with reviewing related 2018 Notary Workgroup

recommendations not addressed in RULONA. For reasons previously explained, the Subgroup

was tasked with studying the related sections of SB678.

The Subgroup worked separately from the other subgroups. They endorsed other

recommendations including that the Notary Public application fee is too low. Subgroup 4 further

recommended that the cost for the education and examination should be assumed by the applicant.

Subgroup 4 agreed that the allowable fee charged by Notaries Public should be increased, but did

not propose a fee amount. Subgroup 4 agreed that RULONA and SB678 satisfactorily addressed

record keeping. The Subgroup asserted that a driver license or other identification number is a

strong indicator of positive identification and that the Office of the Secretary of State could

authorize the aforementioned as a method of recordkeeping.

Subgroup 4 affirmed that the 2018 Notary Workgroup recommendation regarding stronger

enforcement and education is mostly met by RULONA and SB678. No recommendations were

offered to bolster education and enforcement concerns.

Subgroup 4 recommended not requiring Errors and Omissions Insurance be required for a Notary

Public. Errors and Omissions Insurance would protect a Notary Public from the full cost of

defending against a claim of negligence.

Subgroup 4 believes that RULONA and SB678 help to better protect credible notaries but that the

Office of the Secretary of State should create materials which provide safeguards for notaries

from fraud and identity theft.

This Subgroup also reaffirmed two 2018 recommendations:

The Office of the Secretary of State should create a clearer process to change a notary’s

name. The Notary Handbook should be updated to include this process.

The infrastructure of the notary division must be fully modernized, staffed, and funded to

effectively, efficiently, correctly implement, administer, and regulate SB678.

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Recommendations

1. Amend General Provisions Article 4-332 to include an allowance for multiple addresses

and specification of primary physical address for business, furthermore, limiting publicly

available address information to this specified address. In the absence of a secondary

business address, the home address on record would be public.

2. SB678 authorizes a notary public to perform notarial acts using audio-visual

communication technology under the condition that the notary notifies the Office of the

Secretary of State prior to performing those acts and informs the Office of the of the

technology the notary intends to use. The Office of the Secretary of State should determine

specific documentation the notary will be required to provide when informing the Office

of the notary’s intention to perform remote notarizations. A separate Commission would

not be needed. However, the notary must provide the requisite documentation to indicate

their competency to conduct remote notarizations.

3. 8-108(a) The Office of the Secretary of State should publish the status of notaries public.

Remote notary technology vendors should be required to check the Secretary of State’s

published list of a notary’s status to determine if the notary is in good standing before

allowing a remote notarization to proceed

4. Authorize the Office of the Secretary of State to summarily suspend the Commission of a

Notary Public: (text similar to Real Estate code 17-328.a.4), "within 10 days after the

conviction or within 10 days following release from incarceration as a result of conviction,

whichever is later, fails to disclose to the Office of the Secretary of State that the notary

has been convicted of a felony under the laws of the United States, or any state."

5. The Office of the Secretary of State should create and provide a minimum standards

document or a checklist for use by Senators to provide a uniform standard to be used when

evaluating and making a determination about a Notary Public Applicant’s application.

6. The technological infrastructure of the Notary division must be fully modernized,

adequately staffed with permanent positions and fully funded so that when Remote

Notarizations becomes effective October 1, 2020 the Office of the Secretary of State has

the ability to effectively, efficiently, correctly implement, administer, and regulate SB678

and process applicants as well as address any issues pertaining to the same.

7. Notary laws and regulations must be updated to include stronger enforcement, education,

etc. A majority of this recommendation is covered in SB678

8. Improve Recordkeeping: RULONA and SB678 sufficiently address record keeping. In

addition to recording the signer’s name and address, a notary sometimes chooses to record

the signer's driver's license number. The driver's license number (or other ID number) is a

strong indicator that someone was properly identified. Create specific requirements that

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could be implemented by regulation or policy/guidance. This recommendation is addressed

in both RULONA and SB678; regulations may define it more clearly, if necessary.

9. Increase the notary application fee: SB678 does not include an increase to the application

fee to apply to become a notary. The Workgroup recommended an increase in the notary

application fee, the fees are too low for the amount of work that needs to be done to

process an application.

10. Protect credible notaries: The Secretary of State should create materials that provide

guidelines to protect notaries from fraud and identity theft.

11. Name change: The Office of the Secretary of State should create a clear process for a

notary to change one's name. The Notary Handbook should give clearer instruction

regarding how a notary should change their name.

12. Fees charged by the Notary: Recommendation: SB678 should be amended to allow a

remote notary charge a higher fee to offset the cost of technology to perform remote

notarizations.

13. Education & Testing: The cost to deliver Education and Testing must be borne by the

notary applicant. SB678, authorizes the Office of the Secretary of State to regulate fee

changes. The recommendation is that that a portion of each education and testing fee is

returned to the Office of the Secretary of State by the vendor.

14. Fully fund the modernization of the Office of the Secretary of State’s Notary Division’s

database and infrastructure and fully fund required staffing with permanent positions. To

the extent that the Secretary of State needs additional funding, they can request additional

resources through the annual budget process.

15. Recommend that the original text of the bill that identified a cap of $25 for Notary

Services be proposed. Notaries would be able to charge fees less than that amount, but

could not exceed it.

16. The Notary Public should comply with existing law regarding data breaches and should

observe cybersecurity best practices: This was well covered in the final version of the bill

§18-222.a.4.III and §18-222.b.

17. Update the law or regulation to better define how a notary public can satisfactorily identify

a signer: This was well covered in the final version-§18-206 and §18-223.

18. The law should require that a notary public keep required information in their register:

This was very well covered in the final version-§18-219.

19. Recommend adjusting the fee to become a notary public, it is one of, if not the lowest, fee

in the country: The fees charged to apply and obtain a notary commission are in the current

code and were not changed by SB678.

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20. A remote notary applicant should have to apply for an additional Commission in addition

to being Commissioned as a traditional notary: Notaries conducting remote notarizations

must notify the Office of the Secretary of State. The Office of the Secretary of State will

note in the notary’s file that the notary is authorized to perform remote notarizations

(Stepped single license). §18-214.E

21. Establish requirements to prevent rogue notaries from abusing remote notarization

technology. While the law established clear measures to safeguard against rogue notaries

in §18-223.B, §18-223.C and §18-223.D, concerns remain. Training related to remote

notaries needs to clearly convey that notaries can refuse to perform notarial services if they

have concerns §18-206.B.1. “Rogue” notaries exist in paper notarial acts and have existed

since the first notary was appointed in the U.S. (he was removed for malfeasance of

office). Remote notarization has the ability to verify notarial acts since they will be

captured on audio visual recording which will be retained for 10 years. In additional a

multi factor identification protocol is specified in SB678.

2019 report - maryland...- that the secretary of state should have the authority to suspend a...

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