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Nevada Regulatory Update

NEVADA TEMPORARY RULES CHAPTER 240   The Nevada Secretary of State recently issued temporary rules governing electronic notarizations, effective January 8, 2019.  The regulations relate to the legislation enacted in 2017 (Assembly Bill 413) providing for electronic notarizations.  See our memorandum dated June 7, 2018 for a discussion of the legislation.   "Principal" means the […]

NEVADA TEMPORARY RULES CHAPTER 240

 

The Nevada Secretary of State recently issued temporary rules governing electronic notarizations, effective January 8, 2019.  The regulations relate to the legislation enacted in 2017 (Assembly Bill 413) providing for electronic notarizations.  See our memorandum dated June 7, 2018 for a discussion of the legislation.

 

"Principal" means the natural person whose signature is notarized in a traditional or electronic notarization.

 

"Electronic notarial certificate" means the portion of an electronically notarized electronic document that is completed by an electronic notary public and that bears the notary public's electronic signature, electronic seal and certification language as provided by Nevada law.

 

"Electronic notarization solution" means a set of applications, programs, hardware, software or technology designed to enable the performance of an electronic notarial act.

 

"Identity proofing" means a process or a service through which a third person or party affirms the identity of the principal through a review of personal information from public or proprietary data sources.

 

"Solution provider" means a third-party vendor providing a software solution or other service enabling a Nevada electronic notary public to perform his or her duties or complete an electronic notarial act.

 

Upon an applicant's meeting the qualifications for registration as an electronic notary public, the Secretary of State will update the registration to allow the applicant to perform electronic notarial acts.

 

An electronic notarization, including notarization using audio-video communication may only be performed by an electronic notary public registered with and approved by the Secretary of State of Nevada to perform such notarization.  A notary public providing electronic notary services without Secretary of State approval is subject to suspension or termination of his or her notary commission and other penalties.  A Nevada electronic notary public performing an electronic notarial act using audio-video communication must be able to:

  • Identify the principal using multi-factor identification; and
  • Identify the document as the same document in which the principal executed the signature.

 

A Nevada electronic notary public must take reasonable steps to:

  • Ensure the integrity, security and authenticity of electronic notarizations;
  • Maintain a secure backup of the electronic journal;
  • Maintain a secure backup of the recording, if the electronic notarial act is performed using audio-video communication; and
  • Ensure that any audio-video communication for the purpose of an electronic notarial act using audio-video communication is secure from unauthorized access or interception.

 

An electronic notary public must identify a principal by one of the following methods:

  • The electronic notary public personally knows the principal; or
  • The principal is introduced by oath of a credible witness who personally knows the principal and the electronic notary public; or
  • Multi-factor identification.

 

Credential analysis must be provided by a reputable third-party vendor or software tool that can demonstrate proven credential analysis processes and must employ at a minimum technology that provides the following:

  • The credential must pass an authenticity test, consistent with sound commercial practices that:
    • Use appropriate technologies to confirm the integrity of visual, physical or cryptographic security features;
    • Use appropriate technologies to confirm that the credential is not fraudulent or inappropriately modified;
    • Use information held or published by the issuing source or authoritative source(s), as available, to confirm the validity of credential details; and
  • Provide the output of the authenticity test to the electronic notary public. The credential analysis procedure must enable the electronic notary public to visually compare the following for consistency:
    • The information and photograph on the presented credential image; and
    • The principal as viewed by the electronic notary public in real-time through audio-video communication.

 

If the electronic notary public is unable to validate a presented credential of the principal, or to match the principal's physical features with the credential, the electronic notary public may not complete the electronic notarial act. No further attempt may be made by that notary or solution provider to complete the notarial act using audio-video communication using that credential.

 

Dynamic knowledge-based authentication procedure must meet the following requirements:

  • Each principal must answer questions and achieve a passing score. The procedure must include:
    • Five questions, drawn from public or private data sources;
    • A minimum of five possible answer choices per question; and
    • Require that 80% of the questions are correctly answered within two minutes by the principal;
  • Require that if the principal does not correctly answer 80% of the questions that:
    • The principal may make an additional two attempts with the same electronic notary public within a 48-hour period; and
    • If the principal retakes the quiz an additional time within the 48-hour period, 40% (two) of the prior questions must be replaced.
  • Confirm affirmatively that that the principal has or has not correctly answered the questions; and
  • Keep the questions asked and responses of the knowledge-based authentication confidential.

 

The electronic seal used by an electronic notary public affixed to an electronic document during an electronic notarial act must include required information and must generally conform to the size and other requirements of a seal used by a traditional notary except:

  • That once the electronic seal, electronic signature and electronic notarial certificate are affixed and the electronic notarial act is complete, the document is rendered tamper-evident; and
  • If the electronic notarial act is performed by audio-video communication, a statement that the electronic notarial act was performed by means of audio-video communication and substantially conforming to ''Notarial act performed by audio-video communication" must appear adjacent to the stamp or in the notarial certificate.

 

An electronic notary public may not:

  • Perform an electronic notarial act using audio-video communication while the electronic notary public is outside Nevada;
  • Fail to record and/or properly store the recording of the electronic notarial act performed using audio-video communication;
  • Use an invalid electronic seal or digital certificate in the performance of an electronic notarial act;
  • Fail to report a change in electronic seal or digital certificate;
  • Use the electronic notary public's electronic signature and electronic seal together, or the electronic seal, except in the performance of an electronic notarial act;
  • Allow unauthorized access to the electronic notary journal, electronic signature, digital certificate or to the solution used to perform electronic notarial acts; or
  • Violate any other requirement pertaining to the performance of an electronic notarial act.

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Diane Jenkins

Director, National Mortgage Compliance Practice Group, AsurityDocs Of Counsel, Sandler Law Group

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