NC Administrative Rule (eNotarization) | NNA
Rule

NC Administrative Rule (eNotarization)

Notary Law Update: NC Administrative Rule (eNotarization)

State: North Carolina

Summary:

North Carolina publishes administrative rules for electronic notarization and service providers that provide electronic notarization systems.

Signed:  September 01, 2006

Effective:  January 01, 2007

Chapter: N/A

Affects:

Implements North Carolina General Statutes 10B, Article 2 – “Electronic Notary Act” – and G.S. 47-16.1

Changes:

Electronic Notary Registration

  1. Stipulates that the registration form to register as an electronic Notary shall be completed online, printed, notarized and submitted to the Secretary of State’s office via U.S. mail, courier service or in person delivery. (Note: G.S. 10B-106(e) also requires this registration to be submitted electronically to the Secretary.)
  2. Authorizes the Secretary of State to administer the training course on electronic notarization required of all registrants and, if need dictates, to train additional certified Notary Public instructors who are also registered as electronic Notaries to teach this course.
  3. Requires registrants to present evidence of identity to the registrar of deeds and take an oath within 45 days of issuance of the electronic Notary oath notification letter.
  4. Stipulates that an electronic Notary registration is not effective until the oath is taken.
  5. Clarifies that the process for re-registration as an electronic Notary is the same as the initial registration.

Electronic Signature and Seal

  1. Requires a Notary’s electronic signature and seal to be unique to the Notary, retained under the Notary’s sole control and “independently verifiable” – defined as capable of government or third-party authentication of a notarial act, a Notary’s identity and a Notary’s authority.
  2. Stipulates that the Notary’s electronic signature and seal must be accessible by and attributable solely to the Notary to the exclusion of all other persons.
  3. Requires an image of the Notary’s handwritten signature and a printed representation of the Notary’s official seal with a border to appear on each electronically notarized document irrespective of the technology used to affix the Notary’s electronic signature or seal.
  4. Defines “biometric,” “password” and “token” authentication and requires access to the electronic Notary signature and seal to be protected by one of these technologies or a technology approved by the Secretary.
  5. Requires that the Notary’s electronic signature and seal must be capable of rendering all subsequent changes to the document and Notary certificate visually observable after the signature is added to the document.
  6. Provides that the electronic Notary seal belonging to a Notary is subject to laws governing private property.
  7. Prohibits an employer or an employer’s agent or employee from using or permitting the use of an electronic seal or signature belonging to a Notary to whom they are registered.
  8. Requires an employer upon cessation of an employee-Notary’s employment to relinquish control of the electronic Notary seal, transfer possession of the electronic seal to the Notary or eliminate the ability of any other person from using the former employee’s electronic seal if the electronic notarization system used by the employer does not permit transfer of the seal.

Electronic Notarization Standards

  1. Prohibits any electronic notarization that utilizes an electronic device, video camera, telephone or fax machine to substitute for a signer’s physical presence before the Notary.
  2. Requires a signer to individually affix and acknowledge each signature on an electronic document calling for acknowledgment except when: (a) The notarized document is executed on behalf of the United States and any state or foreign government, and any domestic or foreign corporation, nonprofit or professional corporation, limited liability company, and profit and nonprofit unincorporated association; and (b) The notarized document does not adversely affect the claim, right or obligation of another.

Electronic Notary Solution Providers

  1. Defines “approved electronic Notary solution provider” as a person or entity approved by the Secretary of State to provide an “electronic notarization system” – a set of applications, programs, hardware, software or technology that enables a Notary to perform electronic notarizations.
  2. Requires an application for designation as an approved electronic Notary solution provider tobe submitted before issuing any electronic signatures or seals to North Carolina Notaries and shall include: (a) Hardware and software specifications and requirements for the provider’s electronic notarization system; (b) A description of the type(s) of technologies used in the provider’s electronic notarization system; and (c) A demonstration of how the technology is used to perform an electronic notarization.
  3. Requires approved solution providers to provide a free and readily available viewer/ reader so that any electronically notarized document executed with the provider’s system may be viewed.
  4. Requires such of the provider’s principals or employees to take the mandatory educational course online and pass the required examination as is necessary to ensure that the provider possesses sufficient familiarity with all electronic Notary laws and requirements.
  5. Requires providers to obtain an electronic Notary’s Electronic Notary Certificate to Perform Electronic Notary Acts prior to issuing an electronic signature and seal to the Notary.
  6. Requires providers to verify that a Notary has been authorized to perform electronic notarizations by logging on to the Secretary of State’s Web site and comparing the online information about the Notary to the information included on the Notary’s Electronic Notary Certificate to Perform Electronic Notary Acts prior to issuing an electronic signature and seal.
  7. Requires providers to prorate fees for usage of the provider’s electronic notarization system or solution according to the commission term of the Notary purchasing an electronic signature and seal.
  8. Requires providers to suspend the use of any electronic notarization solution for any Notary whose commission has been revoked or suspended by the Secretary of State.
  9. Requires providers to submit an exemplar of the electronic Notary’s signature and seal to the Secretary of State for each Notary who subscribes to the provider’s electronic notarization solution.
  10. Requires providers to notify the Secretary of State of any modifications to information previously submitted to the Secretary within 45 days of the change and to obtain approval from the Secretary for any updates or subsequent versions of the provider’s electronic notarization system before making the update or new version of the system available to North Carolina Notaries.
Analysis:

In December, 2005, North Carolina enacted historic electronic notarization laws based upon Article III of the Model Notary Act. The law tasked the Secretary of State with developing rules in a number of important areas, including the mandatory educational course and examination, the Notary’s electronic signature and seal, and the security of electronic notarizations. The law also authorized the Secretary to issue rules concerning keeping a record of each electronic notarial act, but the rules summarized in this New Law Alert do not provide rules for journal-keeping.

North Carolina’s electronic notarization rules reflect the National Electronic Notarization Standards adopted by the National Association of Secretaries of State in July, 2006. North Carolina Secretary of State Elaine Marshall chaired the commission that wrote the national standards and former NNA employee Ozie Stallworth, now with the Secretary of State’s office, provided leadership in bringing the rules to adoption.

Read the text of the administrative rule.

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