House Panel to Hold Hearing on Remote Notarization Bill

An online notarization bill with strong support from financial services groups may be moving ahead in Congress.

An arm of the House Energy and Commerce Committee, the Consumer Protection and Commerce Subcommittee, has put H.R. 3962, the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2021, on the agenda for a hearing set for noon Thursday.

The bill would let notaries in one state notarize signatures in another state online, if the notarizations “occur in or affect interstate commerce.”

What It Means

The bill could help an agent or advisor who wants to help a client complete a transmission minimize use of in-person office visits, paper documents, wet signatures and postal mail.

The bill could do the same for any out-of-state firms that wanted to do business with an agent or advisor’s clients. Distant advisors could become more formidable competitors for any brick-and-mortar firms that have used an on-site notary to win clients’ hearts.

H.R. 3962 Provisions

Under H.R. 3962, a notary who wanted to notarize a signature remotely could verify an individual’s identity using one of two strategies.

The notary could use at least two distinct types of processes or services to verify the individual’s identity.

They could also take an oath or affirmation from a credible witness who was either with the individual or who had personal knowledge of the identity of the individual.

The bill would preempt most state notarization rules.

The bill could allow states to set some local rules, if they continued to let out-of-state notaries operate in their states, and if they avoided favoring the use of any specific technology or any specific technical specifications.

The Supporters

Rep. Madeleine Dean, D-Pa., and Rep. Kelly Armstrong, R-N.D., introduced H.R. 3962 in June 2021.

The House bill has 47 Republican co-sponsors and 44 Democratic co-sponsors.

Dean is a member of the House Financial Services Committee, but the House Energy and Commerce Committee and the House Judiciary Committee have jurisdiction over H.R. 3962.

The consumer protection subcommittee is the first House panel to hold a hearing on the bill, according to Congress.gov.

Sen. Kevin Cramer, R-N.D., has introduced a companion bill, S. 1625, in the Senate.

S. 1625 has three Democratic co-sponsors and four Republican co-sponsors.

The Senate Judiciary Committee has jurisdiction over S. 1625. That committee has not yet held a hearing on the bill.

Many financial services groups wrote in support of H.R. 3962 when Dean and Rep. Kelly Armstrong introduced the bill in June 2021.

The list of supporting organizations includes the American Council of Life Insurers, the American Financial Services Association, the Financial Services Institute, the Insured Retirement Institute, the National Association for Fixed Annuities, the National Association of Insurance and Financial Advisors, CUNA Mutual and TIAA.

The Hearing

The Consumer Protection and Commerce Subcommittee, is preparing to consider H.R. 3962 along with eight other unrelated bills that could affect businesses.

One, for example, is H.R. 5313, a bill that would require consumer devices that use button cell batteries or coin batteries to have child-resistant closures. Another, H.R. 4081, would require manufacturers of consumer devices to warn consumers if the devices contain cameras or microphones.

Rep. Madeleine Dean, D-Pa. (Photo: Dean)