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Identification and Data Security: New Obligations and New Roles for the Notary in the Electronic World. Thomas J. Smedinghoff Wildman Harrold Chicago. “Can You Notarize This?” What Do Notaries Do Today?. [In the U.S.] the essential function of the notary is

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Thomas j smedinghoff wildman harrold chicago

Identification and Data Security:New Obligations and New Roles for the Notary in the Electronic World

Thomas J. Smedinghoff

Wildman Harrold

Chicago


Can you notarize this what do notaries do today

“Can You Notarize This?” What Do Notaries Do Today?

  • [In the U.S.] the essential function of the notary is

    • to attest the genuineness of writings and acts of execution and, thereby,

    • to authenticate documents for purposes of admissibility and proof in court proceedings as well as for public recording purposes

      • – Tim Reiniger, Executive Director, NNA

  • Civil-law notaries (or latin notaries) are . . . able to provide legal advice and prepare instruments with legal effect


A transition in obligations

A Transition in Obligations?

  • Historically the focus has been on “documents”

  • Today, electronic notarization requires an enhanced emphasis on –

    • Identification

    • Security

      • Contents

      • Signatures


Thomas j smedinghoff wildman harrold chicago

The Notary’s Role In

Identification


Identification is required for all notarial acts

Identification Is Required For All Notarial Acts

  • A notary shall not perform a notarial act if the principal:

    • is not in the notary’s presence at the time of notarization;

    • is not personally known to the notary or identified by the notary through satisfactory evidence;

    • shows a demeanor which causes the notary to have a compelling doubt about whether the principal knows the consequences of the transaction requiring a notarial act; or

    • in the notary’s judgment, is not acting of his or her own free will

      • Model Notary Act, Section 5-1(b)


Identification as a new priority

Identification as a New Priority

  • “Only in the 20th Century has identificationofdocumentsigners become the Notary’s overriding preoccupation and problem.

  • For most of the nearly 2000 years the office of the Notary Public has existed, identification required little effort:

    • most people were anchored in small communities, and Notaries personally knew everyone that appeared before them.

  • But today, . . . Notaries have the sobering responsibility ofvouching beyond a reasonable doubt for the identities of total strangers.”

    The ID Puzzle, The National Notary Magazine, September 1996, p. 9. quoted in Closen, Notary Law & Practice, at pp. 180-181.


Identification as a new priority 2

Identification as a New Priority (2)

  • The electronic environment has added to the concern

    • Since other indicia are missing (e.g., handwritten signatures)

  • "Prosecutors see Notaries as a new kind of cop in the electronic world, who makes sure the person signing is who he says he is, so we can trust electronic documents."

    • Jim Provenza, Los Angeles County special assistant district attorney

  • “FBI: Notaries Needed to Combat Identity Theft and Mortgage fraud”

    • Recent NNA article (2009)


The process is called identity management

The Process Is Called “Identity Management”

  • Three “roles” involved –

    • Subject – the person being identified

    • Identity Provider – the person verifying the subject’s identity

    • Relying Party – anyone who relies

  • One person may fill multiple roles

    • E.g., employer as both Identity Provider and Relying Party


The elements of the identity management process

The Elements of the Identity Management Process

  • Identity Proofing

    • Of the Subject by the Identity Provider

  • Issuing an Identity Credential

    • That Subject can use to assert his/her identity

  • Making an Identity Assertion

    • That makes a claim about a Subject’s identity

  • Authentication(by Relying Party)

    • Of the Subject named in Identity Credential or

    • Of the Person making Identity Assertion about a Subject


Identity proofing

Identity Proofing

  • Who are you?

    • Involves associating one or more attributeswith a person

    • Name alone often not sufficient – e.g., Bill Gates? John Smith?

  • Two dimensions

    • What personal information is collected and verified?

    • What is the degree of certainty with which the identifying attributes are ascertained – “Assurance Level”

  • Result of process is –

    • An “identitycredential” and/or

    • An “identity assertion”


Examples of identity credentials and identity assertions

Identity Provider

Dept. of Motor Vehicles

U.S. State Department

Public library

Employer

Employer

Bank

Certification authority

Notary

Credential / Assertion

Driver’s license

Passport

Library card

Employee ID card

User ID

ATM card

Digital certificate

Notarial Certificate

Examples of Identity Credentials and Identity Assertions


Notarial certificate identity assertion re principal

Notarial Certificate – Identity Assertion re Principal

  • Notarial Certificate: states the facts attested by the notary in a particular notarization

    • Model Notary Act, Section 2-9

  • Example: “On this _______ day of __________, 2009, before me, the undersigned notary, personally appeared [Bill Gates] , proved to me through identification documents allowed by law, which were ____________, to be the person who signed the preceding or attached document in my presence.”

    • Model Notary Act, Section 9-3 Signature Witnessing


  • Authentication

    Authentication

    • How can you prove it?

    • How do you verify that someone –

      • presenting a credential or

      • making an identity assertion

        -- is the previously identified person they claim to be?

    • For example –

      • How do we know who signed the notarial certificate?

      • How do we know that such person is a notary?

    • Performed by cross-checking a claimed identity against one or more authenticators that are associated with or linked to that identity

      • A photo? A seal? A signature? A password? A PKI certificate?


    Authenticators

    Credential / Assertion

    Driver’s license

    Passport

    Library card

    Employee ID card

    User ID

    ATM card

    Digital certificate

    Notarial Certificate

    Authenticator

    Subject / IdP

    Photo / name & hologram

    Photo / name & hologram

    Possession / name on card

    Photo / name on card

    Password / ____

    PIN / data in card

    Private key / CA signature

    ____ / Seal?, Signature?, Sec. of State? Other?

    Authenticators


    The key question for electronic notarization

    The Key Question for Electronic Notarization

    • What are the standards applicable to the notarial identity management process?

    • How are they enforced?


    Thomas j smedinghoff wildman harrold chicago

    The Notary’s Role In

    Security


    Security as a new priority

    Security as a New Priority

    • The Notary will be the front line of protection in preventing fraud and forgery of digital documents

      • Tim Reiniger, NNA Vice President and Executive Director


    The legal role of security in e transactions

    The Legal Role of Security in E-Transactions

    • Create trust

      • So parties will be willing to do business

      • Mitigate enhanced risk of electronic

    • Comply with applicable legal requirements

      • E.g., protecting privacy of personal data

    • Ensure legal / enforceable transactions i.e., level of security may determine –

      • Validity of a signature

      • Admissibility of a document

      • Validity of a transaction


    Security as a condition for enforceability

    Security as a Condition for Enforceability

    • Vinhnee case

      • Must be able to establish integrity of electronic record

    • Dillards Store case

      • Must be able to authenticate signer’s electronic identity

    • NASS notary rules

      • Must be able to detect alterations in electronic record and signatures


    What is the notary s role

    What Is the Notary’s Role?

    • What should the notary be responsible for?

    • Is notary responsible for authenticity and integrity of –

      • Signatures?

      • Notarial certificate?

      • Notarial seal?

      • Document contents? – (e.g., 10 page contract)

    • Is notary responsible for such security –

      • Before signature and notarization?

      • During signature and notarization?

      • After signature and notarization?


    Thomas j smedinghoff wildman harrold chicago

    A New Role

    for the Notary?


    Identification per se is rapidly becoming a legal requirement

    Identification Per Se Is Rapidly Becoming a Legal Requirement

    • FTC Act enforcement actions

      • U.S. v. Rental Research Services, Inc. (March 5, 2009)

    • State security laws

    • FTC Red Flag Rules

    • ACH rules

    • FFIEC rules

    • KYC rules for banks

    • HSPD 12


    Identity management is the new priority

    Identity Management Is the New Priority

    • Obama Administration "Near Term Action Plan" includes: "Build a cybersecurity-based identity management vision and strategy . . . for the Nation.“

      • "Cyberspace Policy Review" released by Obama Administration on May 20, 2009

    • "The United States should make strong identification of identity . . . a mandatory requirement for critical cyber infrastructures.“

      • Center for Strategic and International Studies report titled: “Securing Cyberspace for the 44th Presidency” (December 8, 2008)


    New roles for the notary

    New Roles for the Notary?

    • Is Identification the new Notarial Act of the future?

    • Is Security the new Notarial Service of the future?

    • The notary advantage

      • Notary is an officer of the law

      • Legal presumptions for notarial acts

    • But will the banks be the competition?


    One example notary role in ev ssl

    One Example –Notary Role in EV SSL

    • Extended Validation SSL Certificates

    • Used to identity businesses for display when browser accesses website

    • Notary role –

      • Face-to-face validation of identity of Principal Individual associated with the Business Entity

      • No “notarial act” involved


    Thomas j smedinghoff wildman harrold chicago

    The Future?

    • Electronic identity management standards?

    • Obligations re electronic record security?

    • Notary as a key player in Identity Management?


    Further information

    Further Information

    Thomas J. Smedinghoff

    Wildman Harrold

    225 West Wacker Drive

    Chicago, Illinois 60606

    312-201-2021

    [email protected]

    Wildman Harrold

    Privacy & Security Law Resource Center

    privacylaw.wildman.com


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