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Life Health > Running Your Business > Selling

House-Passed H.R. 3962 Would Ease Online Notarizations

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What You Need to Know

  • H.R. 3962,which passed 323-92, would set minimum national standards for online notarizations.
  • The California attorney general says the bill could weaken state consumer protection standards.
  • The House has also passed a statistics education support bill and a Medicare telehealth benefits bill.

The House has passed a bill that could help clients complete more financial services transactions online.

Lawmakers voted 323-92 Wednesday to pass a bundle of legislation that included H.R. 3962, the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2022 bill.

The bill would set minimum national standards for online notarizations and let a consumer in one state use an online notary in any state, if the transaction involved relates to interstate commerce.

The House has also approved a number of other bills of interest to agents and advisors this week, including H.R. 4040, a Medicare telehealth benefits bill; H.R. 4586, a credit rating organization bill; and H.R. 3588, a math education support bill.

What It Means

Some states already make using online notarizations, including interstate online notarizations, easy. Others don’t.

If H.R. 3962 becomes law and works as expected, you may have an easier time completing transactions online and doing business with clients online.

The downside is that agents and advisors in distant places might have an easier time doing business with your clients.

The Bill

H.R. 3962 would require a notary notarizing a signature remotely to use at least two different types of processes or services to check the signer’s identity.

A notary could also rely on an oath from a credible witness who was with the signer or who had personal knowledge of the signer’s identity.

The bill would preempt state rules that shut out out-of-state notaries or favor specific types of notarization technology or notarization technical guidelines.

The Arguments

California Attorney General Rob Bonta sent the leaders of the House Energy and Commerce Committee — the committee with the jurisdiction over the bill — a letter opposing it.

“Laws governing notaries and notarial acts have long been the province of state regulation,” Bonta wrote. “Notarial acts — in California and in sister states — are a matter of traditional state concern, relating to individuals’ important life transactions and involving sensitive private information.”

Bonta argued that H.R. 3962 state-law preemption would weaken state consumer protection efforts.

But Rep. Madeleine Dean, D-Pa., who introduced the bill together with Rep. Kelly Armstrong, R-N.D., defended the bill in debate on the House floor.

“States will be able to regulate further protections,” Dean said.

She noted that, when she served in the Pennsylvania state legislature, most of the people she worked with were notaries, and she saw that many people struggled to come to notarization appointments because of lack of transportation.

Other House Bills

The House also has been holding votes on many other measures this week.

House members:

• Voted 416-12 for H.R. 4040, the Advancing Telehealth Beyond COVID-19 Act of 2021, which would extend the current Medicare telehealth coverage rules. In the past, the traditional Medicare program sharply limited coverage for telehealth services, but it temporarily expanded telehealth coverage to help enrollees cope with the COVID-19 pandemic.

• Voted 323-92 for H.R. 3588, the Mathematical and Statistical Modeling Education Act, which would create a $10 million grant program to support efforts to improve statistical modeling education programs.

• Approved H.R. 4586, Risk-Based Credit Examination Act, by a voice vote. The bill would give securities regulators more flexibility when deciding whether a credit rating organization could serve as a “nationally recognized statistical rating organization.” In the past, new credit rating organizations have argued that the current rules shut out new players.

(Image: Prostock-studio/Adobe Stock)


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