In October the White House Press Office announced that President Obama would “pocket veto” H.R. 3808 (the Interstate Recognition of Notarizations Act of 2010), commonly known as the “IRON Act.” The Bill, first introduced by Rep. Robert Aderholt in 2005, had passed the House of Representatives in April and Senate in September. In his veto message, the President expressed concerns about possible unintended consequences for consumers, including foreclosure victims.
Consumer groups had expressed concerns that the bill would remove mortgage foreclosure victims’ ability to challenge unlawfully notarized documents, including the use of electronic signatures.
However well intentioned, these concerns were misguided. In reality, the IRON Act would not change the legal standing of the notarization. The irony is that the IRON Act would actually have strengthened consumer protections by requiring, for the first time, that authentications of electronic documents in interstate commerce be rendered tamper resistant.
The veto also was a set back to the National Strategy for Trusted Identities in Cyberspace (NSTIC). The “trustmark,” a key consumer trust component of the contemplated identity ecosystem, shares the same requirements for forgery protection and interstate court recognition as the notary’s electronic seal. Like the property title system, the identity assurance ecosystem requires the existence of a legal foundation for document authenticity.
During 2006 hearings before a subcommittee of the House Judiciary Committee, the IRON Act was promoted by trial lawyers, court reporters, and notaries. There was no opposition from the courts, consumer groups, banking industry or trade organizations.
What the IRON Act does
The IRON Act reduces uncertainty and error in interstate commerce, reduces costs associated with unnecessary document rejection by courts, spurs technological innovation, and promises greater security for properly performed notarizations.
Because courts are not currently required to honor notarizations, properly notarized paper documents are often rejected by courts in sister-states because of varying or unrecognized seal practices. The IRON Act remedies this problem by establishing a minimum reliability standard for all notarized documents–whether paper or electronic–and obligating state and federal courts to recognize lawful notarizations.
The IRON Act doesn’t prevent a foreclosure victim or any other relying party from challenging the validity of an affidavit or other notarization. In our legal system, every notarization can be challenged by evidence of fraud, duress or other unlawful conduct. Opponents have misinterpreted the IRON Act as somehow converting the notarization into a type of judicial act that cannot be challenged.
Additionally, the IRON Act doesn’t remove the universal requirement that signers appear in person before the notary. In fact, except for the mandate that a seal of office be affixed to a paper document, the IRON Act in no way affects any current state regulation overseeing the credentialing and administration of notaries. By addressing the notarized document itself and not the requirements that govern commissioning and practices, the IRON Act introduces no new federal regulations over notaries.
Trustmarks link identity assurance to electronic records and signatures
The IRON Act is based on the fact that the notary ‘s seal–or trustmark–performs a critically important function for courts in determining the admissibility of evidence. Unfortunately, only seven states currently have a tamper resistance requirement for electronic notarizations. The IRON Act, therefore, for the first time sets a national baseline for security and fraud-protection for all notarized electronic authentications.
It specifies that the notary’s electronic seal information must be “securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.” The bill further defines “logically associated with” to mean that “the seal information is securely bound to the electronic record in such a manner as to make it impracticable to falsify or alter, without detection, either the record or the seal information.”
The IRON Act intentionally builds on existing non-notary federal security requirements for electronic records found. Its method for issuing electronic public documents is consistent with the international guidelines of the Hague Conference on Private International Law. Those guidelines also require tamper-resistant technology for documents bearing the official seal of a state or federal government authority in order for that document to be recognized internationally.
Relation to the National Strategy for Trusted Identities in Cyberspace
Both public and private sector participants view trust in online access to networks, the secure exchange of authentic information and the overall identity ecosystem as essential to enable greater citizen use of government data and participation in the digital economy.
In particular, for electronic documents to be reliable over time, a mechanism in the form of a protective electronic seal or trustmark is necessary. NSTIC specifies that “to maintain trustmark integrity, the trustmark itself must be resistant to tampering and forgery; participants should be able to both visually and electronically validate its authenticity.”
Although not originally conceived with the NSTIC in mind, the IRON Act would greatly enhance the objectives of the national strategy by requiring notaries to affix electronic seals in such a way as to prevent forgery to the seal and the document itself. In its current form, the IRON Act’s tamper resistant approach to the notary’s seal mirrors NSTIC’s security requirement for the trustmark.
In vetoing the IRON Act, President Obama expressed a desire to work with the Congress to pass the bill. This will provide an ideal opportunity to enable consumer confidence in both electronic document authentications and in the trustmark component of the NSTIC identity ecosystem.
There remains an important need for the IRON Act and, above all, for mandated interstate recognition of document and identity trust frameworks based on tamper resistant official seals and trustmarks.
About the author
Timothy Reiniger testified on the IRON Act in March 2006 and helped draft the electronic provision of the Act while executive director of the National Notary Association. He specializes in digital trust law and policy, including document authentication, and currently serves as Director of the Digital Services Group of FutureLaw in Richmond, Va.