-- [ From: amp * EMC.Ver #2.3 ] -- 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 * *