August 19, 2024 - OAKLAND — California Attorney General Rob Bonta today sent a letter to Congress expressing his strong concerns with the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act, which would preempt state notarization laws. In the letter, Attorney General Bonta argues that any federal law providing for remote online notarization should allow states to monitor and prevent data breaches, fraud, and other abuses, by allowing coexistence with more robust and protective state notarization laws that states may have in place now or in the future.

“As more of our lives move online, we must be diligent about safeguarding consumer privacy and preventing fraud,” said Attorney General Bonta. “States are the front lines of consumer protection, any federal legislation should embrace, rather than preempt, state notarization laws. As the People’s Attorney, I'm committed to protecting vulnerable Californians from fraud and other abuses. That will be much more difficult for many of our most sensitive transactions — from buying a house to signing a will — if California's online notarization laws are preempted.”

The main purpose of notarization is to verify the identities of the individuals whose signatures are used to formalize important transactions. This includes creating advance healthcare directives, granting powers of attorney, and conducting real estate sales and purchases. The events requiring notarization are infrequent in most people's lives, but the consequences of related fraud can be significant.

The rules regarding notarizations have long been governed by the states. California, for example, has an extensive body of state law governing notaries and notarial acts, including the registration, eligibility, and duties of notaries; the identity authentication process; the preservation of private California information related to the notarial act; and regulatory oversight by the California Secretary of State. In 2023, the California Legislature enacted SB 696, the Online Notarization Act, with broad bipartisan support, after failing to pass similar legislation on three separate occasions that did not achieve the same levels of consumer protections. SB 696 provides many safeguards for Californians, including prohibitions on sharing consumers’ personal information, and requirements for data security.

The SECURE Notarization Act would deprive Californians of most of these protections by broadly preempting state notarization law in the emerging area of remote online notarization. If signed into law, the SECURE Notarization Act would also require states to recognize out-of-state online notarizations that meet minimum standards, with forced reciprocity that would inevitably result in a race to the bottom regarding consumer protections. The SECURE Notarization Act lacks guidance relating to the preservation of electronic recordings and other sensitive personal information, which could be subject to data breaches or other misuse. This data — likely to be retained by notaries as a result of remote online notarizations — had not previously been collected during the traditional notarization process.

A copy of the letter can be found here.
Source: CA. DOJ