The White House announces President Obama is refusing to sign H.B. 3808: Today, the White House announced that President Obama will not sign H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, and will return the bill to the House
October 7, 2010

The White House announces President Obama is refusing to sign H.B. 3808:

Today, the White House announced that President Obama will not sign H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, and will return the bill to the House of Representatives. The Interstate Recognition of Notarizations Act of 2010 was designed to remove impediments to interstate commerce. While we share this goal, we believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized.

Notarizations are important for a large range of documents, including financial documents. As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act. That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.

The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.

This is the bill that had econobloggers up in arms, since it would essentially cover the butts of the many companies using illegal mortgage foreclosure. Score one for the citizens!

UPDATE from Huffington Post:

The legislation, titled the "Interstate Recognition of Notarizations Act," would "require any Federal or State court to recognize any notarization made by a notary public licensed by a State other than the State where the court is located when such notarization occurs in or affects interstate commerce." The bill would also require courts to recognize electronic notarizations.

"The thing that concerns me about the bill is that the provisions in it that allow for digital notarization by electronic means," said Gardner, "which implies that anyone with the appropriate software could notarize a digital document or image of a document, which would allow someone to notarize a document without seeing someone execute the document or doing the things a notary is supposed to do. In my mind that would lead a broad exception for more fraudulent practices."

Ira Rheingold, director of the National Association of Consumer Advocates, told HuffPost he wasn't sure he agreed the bill was so problematic. "Just because you get a lawful notarization of a bunch of lies doesn't change your ability to challenge an affidavit as a bunch of lies."

The legislation passed the Senate without debate on Sept. 27 following a "unanimous consent" request from Sen. Robert Casey (D-Pa.). Casey's office told HuffPost that the senator made the request on party leadership's behalf. "He had nothing to do with the bill himself," a spokesman said.

Reuters reported that, with the help of Sen. Jeff Sessions (R-Ala.), "Judiciary Committee Chairman Patrick Leahy pressed to have the bill rushed through the special procedure, after Leahy 'constituents' called him and pressed for passage." Previous versions of the bill have died in the Judiciary Committee after being passed by the House.

Ohio Secretary of State Jennifer Brunner, who has blogged about notarization problems, told HuffPost she also considered the timing of the legislation suspicious, coming in the midst of a series of announcements by banks that foreclosure procedures are under review. "It's almost like H.R. 3808 was a trap door."

The bill's sponsor in the House, Rep. Robert Aderholt (R-Ala.), was surprised by the speedy passage of the bill and the intensely negative reaction it's gotten. "There is absolutely no connection whatsoever between Congressman Aderholt's legislation and the recent foreclosure documentation problem," said a spokesman in an email to HuffPost. "Congressman Aderholt has been pushing this bill since April of 2005 when he first introduced it in Congress. Obviously, there was no controversy regarding foreclosure documents at that time.

"The Interstate Recognition of Notarizations Act will improve interstate commerce by requiring that lawfully notarized documents be recognized across state lines. The law, once enacted, will strengthen consumer protections by requiring identification of notaries by means of seal and in rendering electronic documents tamper resistant."

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