That was a great read. Some of the author's enthusiasm comes across a bit campy at points, but in general, they seem justified in casting themselves as pariahs.
The whole scenario is a collission of off-color concerns. On one hand, you have notaries and the notary establishment (yeah, I made that up) fighting to save their place in the market. Then you have lawmakers who see it, fail to understand it, and are then lobbied by the aforementioned establishment. Then you've got consumers like PG who are (rightfully) on edge about the legality and scam-factor associated with the idea. Everyone is watching this out of the corner of their eye, defaulting to the position that something is fishy.
Notarization is something business people are trained to treat with some reverence. The entire concept of a signature as an agent of identification is a bit bizzare when you think about it. Your signature is not a secret, but it remains a critical security element. Notarization is a hack. It's another layer of the same thing varnishing over the whole "signature means agreement" show. Yet it's so simple, and so engrained in our way of conducting business that any attempt to change it freaks everyone out. Fascinating.
Based on comments here, multi-factor (non-wallet) authentication is used to identify the parties. This method of ID verification is a technique that I helped pioneer at Equifax many years ago, and I've been disappointed that it hasn't ever really seemed to take off before. I occasionally see it in use here and there, but now really expect it to be recognized for its value. Not perfect for every case, but a useful tool nonetheless.
I was disturbed to see that pg killed an earlier thread on this company, on a rather flimsy basis. The financial industry is obviously ripe for disruption, but if those being disrupted can kick up enough dust to have HN erase all memory of a new idea, we have a bigger problem.
It was not a flimsy basis. The site was specifically claiming online notarization was legal in all states, if I recall correctly[1].
It is NOT legal in California.
They now appear to have modified their claims. As far as I can see, they only say online signing is legal, not online notarization.
[1] The Internet Archive has not crawled them since 2009, when the domain appears to have been used for something completely different, so I can't check to be sure exactly what they said and what has changed.
You're not understanding the facts, online notarization IS legal in California... the notaries themselves can't be in California, but the signers can.
Signers can notarize from anywhere in the world, including California, since the notaries follow Virginia law. It's like how lenders and credit companies often use Utah law (but can lend elsewhere) or corporations incorporate in Delaware.
The California Secretary of State says: "California law requires a person to appear personally before a notary public to obtain notarial acts like acknowledgments or jurats".
Yes, if you are a CALIFORNIA NOTARY than you must follow their requirements. NOT if you are a Virginia Notary, then you follow Virginia Law, and your clients, wherever they are in the world, adhere to your Virginia requirements.
There have been many cases of state courts rejecting out of state notarizations that did not comply with the requirements of the state in which the court sits.
There was a bill a few years ago in Congress that tried to make it so that states would have to honor out of state notarizations, but this bill was vetoed. Until such a bill is signed into law, or either the 9th Circuit or the Supreme Court rules that states must accept out of state notarizations that do not meet the in-state notary requirements, then any notarization in which you are not present is questionable in California.
No, online notarization is not legal anywhere in the world, except Virgnia.
This is not at all similar to how lenders can use Utah law but incorporate in Delaware. Choice of legal forum is a contractual issue between private parties.
Notorization is a legal issue involving the government. Notaries act as government agents when they notarize, so each legal jurisdiction gets to set the standards for legal notarization within their jurisdiction. States are not required to honor notarizations performed in another state under the Full Faith and Credit Clause because notarization is not considered a "public act" but most states will accept notarizations from other states if the standards in the other state are the same or stricter than the first state.
Hence, while signers can notarize from anywhere in the world using SignNow, they can't use this notarization for anything except for transactions governed by Virginia law and subject to the jurisdiction of Virginia courts. This makes the service effectively useless for anyone who does not live in Virginia, since other state courts do not have to accept the notarization.
At the very least, the question of whether out-of-state notarization must be accepted is disputed. Here’s a document on the FTC website by the National Notary Assocation, which states that “[b]ecause of the Full Faith and Credit clause of the U.S. Constitution, notarial acts performed by a Notary in one state have the same force and effect as if performed by a Notary in the respective state.”
I couldn’t find any federal or other court decisions that state that a notarial act is not considered a “public act” under the Full Faith and Credit clause. Can you provide a citation?
Here’s testimony before a House of Representatives committee which states that out-of-state notarizations are often rejected, but usually for formalistic and not substantive reasons:
It's tricky. A notarial act is not a "public act" under the Full Faith and Credit clause because Congress has not defined it as a public act for purposes of the Clause, nor has it set forth rules for proving the public act. (A public act for Constitutional purposes generally means an official act performed by an elected or appointed official, but this definition is expanded by statute to include actions performed by other persons acting in the capacity of the state.) Nonetheless, despite Congressional authorization, it is generally treated as a public act by most state and federal rules of evidence.
States still can and do reject out-of-state notarizations if it fails to satisfy procedural requirements for notarization in that state. Notarization is a formal process--it has very little actual substance--so this effectively swallows up the impact of the Full Faith and Credit Clause.
The National Association of Secretaries of State disagree with you, including in the following public report "Issues and Trends in State Notary Regulation: NASS Report on State Notarization Policies and Practice" found here:
http://www.nass.org/index.php?option=com_content&view=ar...
Key Quotes
Regarding electronic notarization:
“New state and federal laws, such as the 2000 Electronic Signatures in Global and National Commerce Act (E-SIGN), authorize every state-commissioned notary in the nation to use electronic signatures in performing official acts.”
Regarding Out Of State Acceptance
“State laws...already recognize the validity of out-of-state notarizations, the state and federal evidence rules that recognize notarial acts as self-authenticating, and the Full Faith and Credit Clause of the U.S. Constitution.”
States would have to pass legislation against online notarization to prevent its acceptance.
Several states have put out warnings, including the state of California. This notice was published prior to the legal change and has apparently not been reviewed by state counsel. We have received clarification, consistent with all communication from other states, that they are only concerned with online notarization conducted by their notaries.
> The National Association of Secretaries of State disagree with you, including in the following public report "Issues and Trends in State Notary Regulation: NASS Report on State Notarization Policies and Practice" found here: http://www.nass.org/index.php?option=com_content&view=ar....
> Key Quotes Regarding electronic notarization: “New state and federal laws, such as the 2000 Electronic Signatures in Global and National Commerce Act (E-SIGN), authorize every state-commissioned notary in the nation to use electronic signatures in performing official acts.”
You are misunderstanding the issue California and other states have with electronic notarization. As the document you cite notes, but you appear to have overlooked:
As previously mentioned, all states require that an individual seeking
to have a document electronically notarized appear in person before the
notary at the time of notarization. Colorado’s law specifically emphasizes
that electronic notarization is not remote notarization–the signer must
appear in the presence of the notary and swear, affirm, or acknowledge
the electronic document being notarized.
The laws that have made electronic signatures valid in many contexts, including notarization, just deal with using electronic signatures to replace paper signatures and other physical records. For instance, again from the document you cited:
Therefore, UETA permits a notary public and other authorized officers
to act electronically, effectively removing the stamp/seal requirements.
However, it does not eliminate any of the other requirements of notarial
laws. The process of notarization remains the same under UETA. Only the
technology used to make a signature is different.
More:
Under the NASS electronic notarization standards, RULONA, and the most
recent version of the Model Notary Act, an electronic notarization must
meet the same basic standards as a paper-based notarization. The traditional
components remain present, including the notary certificate, the notary
signature and the notary seal information. In most states, the signer must
still appear before the notary public face to face in the same room.
Requiring personal appearance allows a notary to interact with and affirm
the identity of the signer, ensuring that he or she is authorized to sign
and is not doing so under duress.
The National Tobacco Association claims that cigarretes aren't cancerous. The secretaries of state license notaries, so this is no different than an interested trade group pushing the economic interests of its members.
Despite the NASS stance on out-of-state notarization, the states themselves, and the courts, actually get to decide whether an out-of-state notarization can be used in the jurisdiction. Many routinely reject out-of-state notarizations which fail to satisfy the standards for notarizations within that state. (Federal courts are different--they will accept notarizations if the notarization would be valid under the laws of the forum state.)
The exact legal details of is so/is not is hardly to be decided on Hacker News. I am disturbed that one side gets its opinion heard and -- poof! -- down the memory hole that topic goes. It's really just a small version of SOPA in our community. PayPal, when it launched, was illegal in all fifty states. Would Hacker News have suppressed discussions of PayPal's business model?
Good point. Virginia certainly seems to think that it is legal for notaries to notarize across state lines. Perhaps CA disagrees, but they have never really stated as such.
I flagged this before and I am going to flag this again: this service is not legal in any state except Virginia and will not satisfy the in-person verification requirements of any state (except Virginia, which does not require in-person verification of identity). This does not mean the service is illegal; it simply means that this service cannot be used for any legal purposes in any state or federal jurisdiction (except Virginia).
There is a reason this service is not, nor will it ever be disruptive--it does not address the core underpinnings of the notary system: verification of documents and identities. Online identify verification using inaccurate third party verification databases is not sufficient to prove identity for any purposes. Holding up a document or id card to a webcam does not allow for sufficient examination by the notary of the document or card showed to prove that the document or id card is what it is alleged to be.
Indeed, this system would actually aggravate the notarization scam problem it claims to address.
Going digital does not solve every problem. Most people at HN may not realize this, but there are a lot of situations where things cannot be done through a computer.
You are factually incorrect, and you are a big part of the problem here.
If you are a signer, you can go online now to signnow.com, sitting at Paul Graham's desk IN CALIFORNIA and legally notarize your document. It will be legally notarized by a Virginia Notary, and your notarization is 100% legal everywhere in the US.
"The service is not legal in any state except Virginia" just means the NOTARIES must be sitting in Virginia, again, the clients can be anywhere. Interstate commerce, and the National Association of Secretaries of State have proven support for accepting other state's notarizations.
Regarding identification, you should read the law, and try signnow's service since it does NOT rely on holding up an ID card for identity. The law requires, and signnow uses, out of wallet verification questions from a third party provider to verify identity. Anything else done is above and beyond the law, and is FAR ABOVE what currently occurs with the inconsistency of pen and paper notarizations.
I must be missing something in your comment. Because something may have legal errors in its statement, you make some wild blanket statements about what computers can do. Wow. Just wow. I could probably find thousands of similar statements before the Federal e-sign law took effect.
"there are a lot of situations where things cannot be done through a computer"
I hope you meant a huge "yet" in front of your ridiculous blanket statement. Or were you working in the patent office last century and thought all the inventions were finished?
Something about a little post from a new company has people flagging an entrepreneur's story. This story is of interest to me as a hacker (I have a good friend in the notary business, and he wanted me to do some integration for him with the state) and I'm sure it's interesting to many other hackers. I met another guy at Microconf doing notary services online. But because you have some universal grasp of the complex and changing legal situation, and must take it upon yourself to protect consumers from actually learning about a new way to notarize documents, the entire topic should be flagged for removal. Heaven help us all if this is what Hacker News has become...
Perhaps you don't understant how bad the existing notary system is. In many states you don't need to keep even a record of the notarization (in a journal). Video evidence, multi-factor authentication, and other tools are all vastly superior.
The whole scenario is a collission of off-color concerns. On one hand, you have notaries and the notary establishment (yeah, I made that up) fighting to save their place in the market. Then you have lawmakers who see it, fail to understand it, and are then lobbied by the aforementioned establishment. Then you've got consumers like PG who are (rightfully) on edge about the legality and scam-factor associated with the idea. Everyone is watching this out of the corner of their eye, defaulting to the position that something is fishy.
Notarization is something business people are trained to treat with some reverence. The entire concept of a signature as an agent of identification is a bit bizzare when you think about it. Your signature is not a secret, but it remains a critical security element. Notarization is a hack. It's another layer of the same thing varnishing over the whole "signature means agreement" show. Yet it's so simple, and so engrained in our way of conducting business that any attempt to change it freaks everyone out. Fascinating.