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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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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

    • 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?

  • Historically the focus has been on “documents”

  • Today, electronic notarization requires an enhanced emphasis on –

    • Identification

    • Security

      • Contents

      • Signatures


The Notary’s Role In

Identification


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

  • “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)

  • 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”

  • 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

  • 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

  • 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”


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: 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

    • 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?


    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

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

    • How are they enforced?


    The Notary’s Role In

    Security


    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

    • 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

    • 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 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?


    A New Role

    for the Notary?


    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

    • 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?

    • 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

    • 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


    The Future?

    • Electronic identity management standards?

    • Obligations re electronic record security?

    • Notary as a key player in Identity Management?


    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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