The ESRA Public Policy committee has a full agenda of important topics to tackle this year, including eNotarization, blockchain, eMortgage, and new legal challenges. Ken Moyle leads the effort as the Director of Public Policy for the organization, and discussed it in depth recently for ESRA.
Moyle led off by talking about his background. “A lot of my background is actually from ESRA of yesteryear. I’ve been in involved since 2006, and in that time we’ve put together coalitions to change policy at the IRS, the FHA, and many other state and federal agencies, as well as occasionally working on state and federal legislation. It’s been with one aim in mind: to remove barriers to electronic signatures and records.”
What is the ESRA mission as it relates to public policy?
“Our mission is a paperless future,” Moyle said. “Anything we can do to encourage electronic records and signatures and remove barriers to adoption of them is in our wheelhouse. That’s a wide undertaking and we are rising to the challenge. We usually poll our members to understand how best to address those in the most resource-effective way.”
What does the public policy committee look like right now and how does it function?
“It’s open to any ESRA member and we have a large number of people involved,” Moyle replied. “Multiple members of the committee represent the companies they work for that are members of ESRA. It’s about 60 people. We meet once or twice a month, but the real meat of it is we are a member-run and member-focused organization, which means we have multiple sub-committees that take important issues to those members and let them run with them. They decide the outcome we’re looking for on an issue and can move forward with the blessing of the committee. We have several projects like that right now.”
What are some past public policy case studies or programs that you’ve been involved with?
Moyle said: “One that was fun was back in 2010 when we put together a coalition and lobbied Congress to put together a national ESIGN Day. It was a good example in bringing together people with disparate interests and pulling all oars in the same direction. More recently, we advised the IRS in an educational capacity to ensure outcomes that were consistent with the ESRA mission.”
He added: “At the FHA (Federal Housing Administration), we were twice influential in guiding them through the proper way to approach some of these issues and create a coherent policy.”
Moyle also said: “The way competitors come together through ESRA is an interesting and productive dynamic. The camaraderie is very strong, because a rising tide lifts all boats. We have good relationships within ESRA to get our mutual objectives taken care of. It’s a very pronounced part of ESRA and makes it an organization that people want to be part of.”
What’s the process for determining ESRA’s top public policy priorities?
“It’s a very interactive and well-documented process,” Moyle said. “We poll the membership for issues of importance and urgency to them. We gather up a bundle of opportunities to improve every six months to one year. We break them down into weaknesses in the current state and opportunities and threats in the future state, which means there could be some pending legislation that could hurt the organization in the current state, or there’s legislation that presents a chance to advance or mission or is a threat to it. It’s important to put those in the right buckets.
“We then assign a priority to each item. We look at what’s the most urgent and what’s the most long-term important, which aren’t necessarily the same. We give the most urgent ones some weight.”
He concluded: “We create a project mechanism where we determine the outcomes and the audiences we’re addressing. Audiences can be decision-makers or influencers, for example, and outcomes can be anything from education all the way to getting action taken care of. We matrix that out and assign a project based on those outcomes and audiences. The project is approved by the committee and then the people most affected and most eager to work on it can make decisions and communications that are already approved by ESRA.”
What’s at the top of the public policy agenda right now?
Moyle said: “We have a tiger by the tail with remote notarization. It actually is at its core the basis for many of the obstacles that we see in the world in terms of adoption, such as mortgage or land title or leasing. We tend to have an obstacle with those with the notarization requirement.
“We have a chance to go straight to remote notary and we’re seeing traction in a lot of states that are coming up with policies and laws that acknowledge a notarial act being conducted through a webcam or other remote means.”
He continues: “Closely aligned with that are electronic wills. The model state law that we base most of our policies on excludes wills and codicils, and that’s now changing. We’re behind an effort in many states to amend their laws to acknowledge their ability to create electronic wills. That will help remove some barriers too.”
What are the areas of conflict in the remote notarization and electronic wills spaces?
Moyle replied: “A lot of what we deal with every day, especially in policy with agencies, is a fear of change and an unwillingness to view the world through a modern lens. In these two issues, though, it’s a law change that’s needed to accommodate it. In the case of electronic notary, we’ve long argued that the current law supports it, but we haven’t argued that it supports remote notarization because many state laws are clear about physical presence. So state laws need to be changed.
“With electronic wills, there’s some resistance from the old guard, but the most important factor is that there’s no basis for this in law, aside from common law. So because there are laws on the state books for these, we have to acknowledge them through amended or new laws so people can do this.
“The question as to whether something is legal or not, such as e-signature, is in the rearview mirror, so this is about certain statutorily-imposed practices covered by state law and whether the state law supports it. We would argue that in some cases, it’s questionable whether it does.”
He continued: “We tend to be very skeptical of new laws coming out to cover new technologies, so when we support changes to laws, it’s because we don’t believe the current law is adequate. So in these two cases, we see them as opportunities. A remote notarization statute and an electronic will statute can help with the adoption of e-signatures.
“On the other side, we’re saying that if you are going to pass a new law that tends to threaten the current state, or the future state, we’d rather you not do so, because new laws tend to create confusion about what current laws already allow.
Thoughts on blockchain and smart contracts
Moyle continued: “We’ve been very busy trying to put out some brush fires with regard to changes to the Electronic Transactions Act that include blockchain in the definition. Some states have passed laws or are trying to do that with regard to blockchain and smart contracts.
“So why are we against that? It’s because the current laws, ESIGN and UETA, are technology-neutral in their overlay statutes, so they don’t need amendments. Blockchain and smart contracts are already covered under the current law, but unfortunately, when we try to add blockchain or smart contracts to UETA, we’re just creating redundancy and confusion, and it will only cause further problems down the road. If you mention blockchain but not something that will come out in the future, is that new thing now not covered?
“We’ve worked closely with the Chamber of Digital Commerce and the original drafters of UETA to come out against some of these bills that are attempting to amend UETA in that regard.”
What’s your perspective on blockchain right now and where it’s going?
Moyle said: “We’re already getting to the top of the hype cycle and we’ll be in the disillusionment trough shortly. What I think blockchain will accomplish is to decentralize a lot of privately maintained records that enable a group solution. You can’t really implement blockchain as a business – it has to be a network or an ecosystem. We have to grab everyone and stack hands on how you’ll do the consensus mechanism, how you’ll handle the distributed ledger, and so forth.
“It will require people to cede control of their records and rely on a sole source of truth that isn’t under their control, which will require winning a lot of hearts and minds to manage an entire ecosystem. That’s a long time in coming. It’s the biggest benefit and the biggest barrier.”
What other topics are happening with ESRA public policy these days?
Moyle said: “We’re planning a day in DC later this year, where we’ll be doing a fly-in with various agencies. We’ll visit various agencies. We’re dealing right now with the federal home loan and reserve banks, in terms of having the court coordinate and unify their positions on accepting electronic chattel paper and electronically pledged loans.
“We have a group working on e-titling, such as e-odometer for automobiles, and e-power of attorney. They’re working with various groups to get a coherent policy at the state and federal levels.”
He added: “We have a group working on California’s non-UETA-conforming act, as well as a group working on e-closing and e-mortgage. That latter group is always busy dealing with an ecosystem problem there because we have people that are relying on each other and relying on standards, so it’s hard to get them to agree on something. ESRA is working with various groups to ease that burden a bit.
“In 2018, for the second half, we’ll be streamlining the projects we’re working on to focus on goals that will be more heavily measured toward the end of the year. We’ll be doing calibration surveys with our members soon. We’ll be testing for importance and urgency among our members with those issues.”
Fill in the blank: “2018 will be a great year for ESRA public policy if [blank] happens.”
Moyle said: “If we are able to stop more blockchain laws from being passed and a UETA amendment being passed, and if we’re able to get more remote notary and e-will legislation passed. It’s hard to measure stopping something, such as killing bills. I think it would be good if California’s blockchain bill doesn’t pass, and it would be good if we get two more states to pass e-will and remote notarization legislation.”
How can people get involved with the ESRA public policy committee?
Moyle said: “The first thing they need to do is join ESRA, which has a very low cost of membership. They can go to esignrecords.org and click the button to join. Once they join, they get an email from me inviting them to join the public policy committee and can move themselves into any group they want. They’ll also be able to participate in deciding what our second half objectives will be.”