Data privacy concerns quietly sink remote notary bill in last days of the legislative session

“The information must have finally caught up,” said Sen. Lois Court, a Democrat from Denver who voted aginst the bill. 

Data privacy concerns quietly sink remote notary bill in last days of the legislative session

A proposed law that would allow Colorado companies to notarize documents online seemed like a done deal; the bill passed the Senate with near-unanimous support and it had bipartisan sponsorship in the House.

But despite this momentum, lawmakers in the last days of the legislative session confronted a question common in the digital age: how to protect consumer privacy.

This week, lobbyists and lawmakers started sounding alarms that the bill dealing with online notary companies could lead to the sale of personally identifiable information — concerns unbeknownst to at least three senators who voted for the bill in late March.

And unable to broker an agreement between a notary company and groups advocating for greater privacy protections, the bill quietly died Tuesday afternoon at the request of a lead sponsor, Rep. Alec Garnett, a Democrat from Denver. The bill will disappear at midnight Wednesday without a final vote for or against it. It will be logged in the record as “deemed lost.”

“The information must have finally caught up,” said Sen. Lois Court, a Democrat from Denver who was the only senator to vote against the bill.

Court, who sponsored another data privacy bill, said she doesn’t blame her colleagues for not catching the potential threat to privacy until the last week of the session; lawmakers passed over 700 bills this year, she said, and sometimes it’s hard to fully digest policies within the 120-day legislative session.   

“More information surfaces, and as that happens, we may change our votes,” she said. “Things move so fast it’s sometimes difficult to be ahead of the information.”

The bill would have allowed documents like concealed handgun permits, mortgages, power of attorneys to be notarized using a webcam over the Internet. This would save consumers time that otherwise would have been spent getting a document notarized in front of an authorized person.

Allowing companies to verify these signatures online seems like a long-overdue policy change, said Rep. Dan Pabon, a Democrat from Denver who supported the bill.

“We are just now updating our statutes to reflect what, by and large, every other industry and every other company has already done,” Pabon said. “It’s time to update our notary system.”

But one company backing the proposed law, Notarize, has been pressing lawmakers to allow it to share some of this information, which they say is needed to carry out their work.

Under the bill, notaries would have access to a wide range of personally identifiable information, including a person’s Social Security number, pay stubs, address and date of birth. The bill would allow them to share this information as long as consumers checked a box agreeing to certain conditions in their privacy policy.

“That really gives us some pause,” said Elizabeth Peetz, vice president of government affairs for the Colorado Association of Realtors, a group that pushed for greater privacy protections in the bill. “They are not really making you aware that they will sell that data unless you’re a very educated consumer.”

Supporters of the bill said it would be illegal to sell this information under existing federal law.

“The technology is there and the security is there,” said Rep. Cole Wist, a Republican from Centennial, who sponsored both the remote notary bill and a data privacy bill. “I think we have protections already built in.”

Debate over the bill came when there was already heightened attention on data privacy, with some calling the proposal the “Cambridge Analytica” bill, a reference to the data firm that legally purchased Facebook users’ data without express permission in order to help President Donald Trump’s 2016 election campaign. This prompted a #DeleteFacebook trend over what some users said was a breach of trust.

Michael Chodos, senior vice president and an attorney for Notarize, points out that financial companies have to comply with laws that social media companies do not. He said it would be illegal to sell customers personally identifiable information to other companies.

“Notarize does not sell data to marketing companies,” Chodos said. “We do not sell customers’ data to third parties.”

One reason the company is concerned about prohibiting the sale of this information, he said, is because “sale” can legally mean exchange.

“If you just prohibit the sale of information, then you prevent all types of legitimate transactions from happening,” Chodos said.

But these seemingly incremental changes affecting consumer privacy can add up, said Denise Maes, public policy director for the American Civil Liberties Union.

“I always think it’s death by a thousand cuts,” Maes said. “The policy to invade your privacy has always moved at a faster pace than the laws to protect it.”

In this case, this policy came to a screeching halt, and without any fireworks on the House floor. Some lawmakers were expected to introduce about 40 amendments highlighting the issue of data privacy.

Said Rep. Pabon: “Bold bills don’t die, they just fade away.”

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About the Author

John Herrick

John is covering the 2018 legislative session. Follow him on Twitter @herrickjohnny and email him at John@coloradoindependent.com.

1 Comment

  1. PhilN on said:

    This was a bad idea, period. Just because the tech is there to do a thing doesn’t mean the thing should be done. Privacy concerns HAVE to be paramount in this weird new world!

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