DEPARMENT OF FINANCIAL INSTITUTIONS
The Department of Financial Institutions by this order creates ch. DFI-CCS 25 related to notaries public and notarial acts. This order is issued pursuant to section 80 of 2019 Wisconsin Act 125, which authorizes the Department to promulgate these rules as emergency rules and eliminates several steps from the normal emergency-rule promulgation process under s. 227.24, Stats., as described in paragraph 3 of the analysis below. ______________________________________________________________________________
ANALYSIS
1. Statutes interpreted: Chapter 140, Stats. 3. Explanation of agency authority: The Department of Financial Institutions commissions and regulates notaries public of this state under Chapter 140, Stats. Section 140.27 authorizes the Department to promulgate administrative rules to implement Chapter 140, including rules establishing maximum fees for performing notarial acts for remotely located individuals; ensuring the integrity of notarial acts for remotely located individuals and preventing fraud or mistake; and prescribing the process for granting and restricting commissions. Section 140.145(8) further authorizes the Department to promulgate administrative rules relating to the performance of notarial acts for remotely located individuals. Section 80 of 2019 Wisconsin Act 125 authorizes the Department to promulgate these rules as emergency rules under s. 227.24, Stats., and further eliminates several steps from the normal emergency-rule promulgation process, as follows: Notwithstanding s. 227.24 (1) (a), (2) (b), and (3), the department is not required to provide evidence that promulgating a rule under this subsection as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated under this subsection. Notwithstanding s. 227.24 (1) (e) 1d., the department of financial institutions is not required to prepare a statement of scope of the rules promulgated under this subsection. Notwithstanding s. 227.24 (1) (e) 1g., the department of financial institutions is not required to present the rules promulgated under this subsection to the governor for approval. 4. Related statutes or rules: Notaries public and notarial acts are governed by Chapter 140, Stats. 5. Plain language analysis:
These administrative rules implement 2019 Wisconsin Act 125, which revises state law governing notaries and notarial acts and authorizes notaries public to perform notarial acts for remotely located individuals using approved communication technologies. They are intended to provide clarity to notaries public and enable the flexibility of remote notarization while ensuring the integrity of the notarial process. They also take advantage of the expertise of the newly created remote notary council, a body unique to Wisconsin, to evaluate remote online notarization platforms and providers and ensure that Wisconsin notaries are using providers that implement state-of-the-art safeguards to minimize the risk of fraud or mistake. The rules do the following:
--Create procedures to ensure that Wisconsin notaries utilize communication technologies that meet national and state standards for remote online notarizations. Under the rules, remote online notarization providers can apply for approval of their systems, processes, training programs, and safeguards. Providers that have been reviewed and approved may be utilized by Wisconsin notaries to perform notarial acts for remotely located individuals.
This is similar to the approach in place in Michigan and the emergency remote notarization procedures implemented in Iowa, as well as other states. Unlike Michigan and Iowa, however, Wisconsin can draw upon the expertise of a remote notary council newly created by 2019 Wisconsin Act 125. The rules call for the remote notary council to review a provider’s application for approval and to require the provider to appear for questions and provide any information requested by council members to aid in their evaluations. --Set a maximum fee of $25 for performing a notarial act for a remotely located individual, which is the prevailing maximum fee among those states (like Wisconsin) that have enacted statutes distinguishing between the maximum fees for in-person and remote notarizations. Locally, Minnesota and Ohio each impose a $25 maximum fee.
--Codify certain processes for granting and restricting notary commissions, including the process for making complaints against a notary public, the department’s authority to investigate those complaints, and the grounds for restricting or revoking a notary commission. The rules also clarify the types of prior offenses that are disqualifying when applying for a notary commission and authorize the department to use email as the primary means of providing notices to notaries and notary applicants.
6. Summary of, and comparison with, existing or proposed federal regulation:
Not applicable. The commissioning and regulation of notaries public is a matter of state law.
7. Comparison with rules in adjacent states:
Michigan has had a remote online notarization statute in effect since early 2019. Its Secretary of State is required to review whether communication technology providers meet the state’s standards for identity proofing, credential verification, records retention, training for notaries public, and other safeguards that overlap those set forth in 2019 Wisconsin Act 125. State notaries public are permitted to perform remote online notarizations using communication technology providers. Michigan has not adopted separate administrative rules for remote online notarization, though its Secretary of State has issued official guidance to notaries. It has not set a distinct maximum fee for a remote notarization; all notarizations in that state are subject to a $10 maximum.
Minnesota also has not adopted separate administrative rules, though its remote online notarization statute largely mirrors the standards and requirements of 2019 Wisconsin Act 125. Minnesota sets a $25 maximum fee for a remote notarization. Iowa’s remote online notarization statute (SF 475) has not yet taken effect, and it has not yet promulgated administrative rules. The statute is silent on maximum fees for a remote notarization but contains substantially similar requirements for notarial acts as 2019 Wisconsin Act 125. Illinois does not yet have a remote online notarization statute, but it has adopted emergency guidelines that permit remote online notarizations via live audio and video feed without extensive or standardized procedures for identity-proofing and credential verification. Illinois has not set a distinct maximum fee for a remote notarization.
8. Summary of factual data and analytical methodologies:
The proposed changes are based on staff input on practices and procedures in administering the commissioning and regulation of notaries public in this state, as well legal counsel’s review of 2019 Wisconsin Act 125 and substantially similar statutes and administrative rules governing remote online notarization in all states that have permitted it. 9. Analysis and supporting documents used to determine effect on small business:
Small businesses are not affected by these rules.
10. Anticipated costs incurred by private sector:
No additional costs are anticipated to be incurred by the private sector as a result of these rules.
11. Effect on small business:
Small businesses are not affected by these rules.
12. Agency contact person:
Jennifer Booker
Director, Bureau of Uniform Commercial Code, Notary and Trademarks
Division of Corporate and Consumer Services
Department of Financial Institutions
13. Place where comments are to be submitted and deadline for submission:
Comments may be submitted to the contact person shown below no later than the date on which the public hearing on this proposed rule order is conducted. Information as to the place, date and time of the public hearing will be published in the Wisconsin Administrative Register.
By mail: Matthew Lynch, Chief Legal Counsel, Department of Financial Institutions, PO Box 8861, Madison, WI 53708-8861.
By delivery: Matthew Lynch, Chief Legal Counsel, Department of Financial Institutions, 4822 Madison Yards Way, North Tower, Madison, WI 53703.
NOTARIES PUBLIC AND NOTARIAL ACTS
DFI-CCS 25.01. Definitions. This chapter adopts and incorporates the defined terms and definitions set forth in ch. 140, Stats. DFI-CCS 25.02. Notices from the department. (1) Any notices or other communications from the department may be provided to a notary public by email.
(2) A notary public must provide the department with written notice of any change of address (including primary email address) within 10 days of the change.
DFI-CCS 25.03. Arrest and conviction record. (1) For purposes of applying s. 140.02(1)(b), Stats., “an arrest or conviction record” relevant to service as a notary public is a record that includes one or more felonies or other offenses that would be admissible for purposes of impeaching the applicant’s character for truthfulness in a judicial proceeding governed by the rules of evidence of this state or the federal courts. (2) Offenses that have been expunged or pardoned are not considered to be part of a person’s arrest or conviction record for purposes of applying s. 140.02(1)(b). (3) A notary public or applicant must comply with any requests of the department to provide official records, reports, or other information regarding any arrests or convictions.
DFI-CCS 25.04. Providers of communication technology. (1) Remote notary council approval required. (a) Except as provided in sub. (1) (b) of this section, a provider of communication technology used to perform notarial acts for remotely located individuals must obtain the approval of the remote notary council before allowing its platform to be used by a notary public of this state to perform a notarial act for a remotely located individual.
(b) A provider that was provisionally approved by the department prior to the effective date of these rules must submit the application materials described in sub. (2) of this section no later than August 1, 2020. Such provider’s approval remains effective until such time as the remote notary council denies the application under sub. (3) of this section, in whole or in part, or the approval is restricted or terminated under sub. (5) of this section.
(2) Requests for approval; contents. A provider of communication technology may request approval of the remote notary council by submitting to the department verified documentation or other evidence sufficient to detail:
(a) how the provider will ensure that notarial acts for remotely located individuals performed on the provider’s platform by a notary public of this state comply the requirements of ss. 140.145 and 140.20, Stats., and this chapter; (b) the proposed methods of performing a notarial act involving a remotely located individual using the provider’s communication technology;
(c) the process or service used to verify the identity of a remotely located individual by a review of personal information from public or private data sources (“identity proofing”);
