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Date: Thu, 14 Mar 1996 11:09:05 +0800
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Subject: WSJ on E-Notaries
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THE WALL STREET JOURNAL. 
(c) 1996 Dow Jones & Company, Inc. 
------------- 
TUESDAY, MARCH 12, 1996 
 
Legal Beat: Will Notaries Still Reign Over Red Tape When Documents
Move Electronically? 

By Margaret A. Jacobs Staff Reporter of The Wall Street Journal 

When Jack Gillis recently refinanced his home mortgage, he was
dismayed by the number of documents that had to be signed by a notary
public.
 
"I never could figure out why I had to have half of them notarized,"
says Mr. Gillis, a Washington, D.C., public relations consultant.
"Who are notaries anyway?" he asks. "What purpose do they serve?"
 
To anyone who has endured the hassle of trying to find a notary in a
hurry, such questions probably have a familiar ring. And these days
they have an extra edge: The digital age notwithstanding, notaries
toil on -- improbably -- in a sea of paper. Their quaint ledger books
and embossed seals are meant to deter fraud, but are hardly a match
for the unscrupulous. And amid accumulating evidence of sloppy
practices, some government officials are suggesting that notaries may
be obsolete.
 
There is even a move afoot to push notaries into the 21st century: A
committee of the American Bar Association has recommended creating a
new legal subspecialty of "cybernotary." These attorneys would 
combine legal and computer expertise, and would verify the
authenticity of electronic documents produced in global business
transactions. Part of their job would be to assure that a document's
"digital signature," or unique computer code, is genuine. Though use
of digital signatures is limited today, most people familiar with the
technology predict it will be commonplace within a few years.
 
Charles Faerber of the National Association of Notaries in Canoga
Park, Calif., stoutly defends notaries as effective bulwarks against
fraud; without them, he adds, the courts would be awash in cases
challenging the authenticity of documents.
 
The notary's duties have changed little over the centuries. The first
notaries were the scribes of ancient Rome who wrote official
documents. Today, they exist all over the world, virtually wherever
there is paperwork. In the U.S., some 4.5 million notaries are
licensed by state governments to verify the identities of people who
sign documents, such as realestate deeds and court affidavits. Lawyers
make copious use of notaries.
 
To cut red tape, Congress in recent years has dropped notarization
requirements for some documents filed with the federal government,
including trademark applications and certain court papers. Instead,
signers can declare under penalty of perjury that their information
is "true and correct."
 
At least one federal judge has also expressed doubts about the need
for notaries. "It may be questioned whether notarization is actually
an improvement upon the mere signature," U.S. District Judge John F. 
Grady of Chicago wrote in a 1990 opinion concerning proper procedures
for serving a lawsuit.
 
To ensure that people who sign documents are who they say they are,
notaries are supposed to ask for identification if they don't
personally know the signer. Then they are required to sign the
document themselves, affixing their stamp or seal. They typically
charge a fee of $2 or less.
 
But almost anyone over 18 who pays the $25 or $30 license fee is
eligible to notarize documents. In some states notary seals are
available by mail order, without any required proof -- or
notarization, for that matter -- that the recipient is authorized to
use it.
 
The absence of oversight has led to lax practices, critics complain.
Janice Shields, director of the corporate accountability project at
the Center for the Study of Responsive Law in Washington, D.C., says
that when she sold her car and had the bill of sale notarized, "the
notary didn't have a clue who I was. I could have stolen the car, for
all the notary knew."
 
In a 1990 survey by New York's notary trade group, only one of 217
randomly selected notaries there properly dealt with a simple
affidavit. More than 82% failed to check identification, for example.
 
Four years ago, Florida officials threatened to do away with notaries
entirely if slipshod practices persisted. It tightened up on rules
that are often flouted, insisting that documents be signed in a
notary's presence, for example. The crackdown arose after notaries
had failed to detect a rash of fraudulent boat sales, among other
complaints.
 
Earlier this year, California began requiring notaries to take
signers' thumbprints before notarizing real estate deeds. Besides
trying to prevent fraud, the state acted to impress upon low-income
and elderly people the significance of signing away their homes, says
Mr. Faerber of the national notary association.
 
Mr. Faerber, whose 125,000-member group advocates entrance tests and
training to professionalize the field, says notaries can prevent the
ailing elderly from being coerced into changing their wills or making
large gifts. "Nursing homes and hospitals are notary battlegrounds,"
he says. "They're where lots of wrongdoing is attempted."
 
Yet for people in need of a notary, simply tracking one down in a
hurry can be a challenge. Few notaries advertise; usually they
perform their service as a sideline to another full-time job.
 
Dan Holly, who works on Capitol Hill, recalls searching in vain for a
notary several years ago while he was working as a newspaper
reporter. He later found out that the managing editor's secretary was
a notary. "I would never have known," he says.
 
Even some notaries find notarization a nuisance. In New York, where
notaries must renew their licenses every two years, real-estate
broker Jane Tjian has found herself in need of notarization just as
her own notary license had expired. "You count on another
broker-notary being around and they're not," she says. "Then you have
to scramble to find someone or run to the bank" to track one down.
 
But Mr. Faerber of the national association says it's too soon to
write his profession's obituary. If notaries were eliminated, he
says, "the courts would be flooded with challenges that signatures
were coerced or forged."
 
He adds: "It may seem minor, but looking someone in the eye does
impress upon people the importance of telling the truth."
 

* * END OF DOCUMENT * *