It’s a question Notary Signing Agents often ask: “Why do I need a separate background check if the state ran one when I became a Notary?”
Simply put, companies that use the services of NSAs don’t have access to the results of state background checks; state screenings aren’t rigorous enough; and the mortgage industry needs more frequent background checks.
State background check results are only available to state officials.
In California, for example, NSAs undergo a state background check every four years as part of their commissioning process. But only state officials see the results. They are not available to lenders, title companies and other businesses in the mortgage industry that use the services of NSAs.
Yet federal regulators, including the Consumer Financial Protection Bureau (CFPB), require lenders to be able to prove that they have properly vetted third party contractors — including NSAs — who handle the non-public personal information of borrowers. Without having access to the results of NSAs’ background screening, lenders won’t be able to comply with federal requirements.
State background checks are not rigorous enough for the mortgage industry.
State Notary background checks usually only screen for convictions that would disqualify the applicant from receiving a commission. However, NSAs are unique in that they have unsupervised access to borrowers’ non-public personal information, they travel by car to the signing location and they meet with borrowers in their homes. So, lenders and title companies apply stricter standards. Consequently, their background screening requirements for Signing Agents include screening for misdemeanor crimes and infractions as well as felonies.
Lenders need more frequent background checks.
State Notary background checks are typically only made when someone applies for or renews their commission — every four years in California and Oregon, for example. If a Notary is convicted of a serious crime before then, lenders need to know in order to comply with federal regulations. In addition, a conviction does not automatically cause the Notary to lose their commission. That process can take months or longer.
But companies must be able to show that any NSAs they work with comply with federal privacy and data security regulations, so many require NSAs to have a screening that is no more than 12 months old.
A Final Note: Most states do not run background checks for Notary applicants.
Many people assume that every Notary goes through a background check as part of their commission application process. That is not true. Only a few states check the backgrounds of all their Notary applicants. Several other states only run a background check if an individual acknowledges on their application that they have a criminal record.
David Thun is an Associate Editor at the National Notary Association.
Additional Resources:
Signing Agent Background Screening Process
Background Screening Quick Facts
Signing Agent Certification