Chairmans Welcome Dan Puterbaugh Adobe ESRA 2017 Legal
Chairman’s Welcome Dan Puterbaugh, Adobe © ESRA 2017
Legal Update and Regulatory Review Margo Tank, Partner, Buckley Sandler © ESRA 2017
Vendor Management – OCC Update Original 2013 Bulletin: 2013 -29 • Requires financial institutions to provide comprehensive oversight of third-party vendors • Outlined a “life cycle” approach, including five stages of evaluation 2 Supplemental Bulletins in 2017 © ESRA 2017
Vendor Management – OCC Update Bulletin 2017 -7 • Sets out clearer, stricter examination procedures • OCC expects financial institutions to have an in-depth and strategic approach to evaluating third-party relationships Bulletin 2017 -21 • • © ESRA 2017 Confirmed the broad reach of Bulletin 2013 -29, including to marketplace lenders and online platforms that partner with financial institutions Emphasis on technology vendors, especially as those vendors are more frequently performing “critical activities” Acknowledged the difficulty of evaluating fintech vendors, especially new or startup vendors Expects certain minimum vendor evaluation standards
Vendor Management – CFPB Update April 2017 Supervisory Highlights • Move from reviewing vendor oversight process to direct review of vendors • Specifically calls out technology vendors, emphasizing the: • “potential risks to consumers posed by large service providers, which provide technological support to facilitate compliance with Federal consumer financial law, including software packages, electronic system platforms, and other types of technological tools. ” • Bottom line: vendors can expect direct oversight, including communications from the CFPB, as opposed to merely receiving audit requests from clients © ESRA 2017
• • United Nations Commission on International Trade Law – Model Law on Electronic Transferable Records Addresses standards and guidance for • Establishing control of an electronic record as the equivalent of possession of a paper instrument • Establishing the reliability of systems and methods used for the generation and transfer of such records Technology-neutral Works within the existing framework of transferable records laws On July 13 the United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Electronic Transferable Records (MLETR). If broadly enacted by nations, the MLETR would provide uniform legal framework for the use of electronic records in connection with transferable records—including bills of lading, bills of exchange, promissory notes and warehouse receipts. By establishing uniform standards under which electronic records of such documents may be the equivalent to paper, the MLETR has the potential to streamline international commerce and provide a higher level of security over paper documents. The model law, among other things, addresses standards for establishing control of an electronic record as the equivalent of possession of a paper instrument, as well as guidance for establishing the reliability of systems and methods used for the generation and transfer of such records. Like the UETA and ESIGN in the United States, the MLETR is meant to be technology-neutral and is designed to work within the framework of existing laws governing transferable records. The full text of the final MLETR and an accompanying Explanatory Note (akin to official comments) will be available here. © ESRA 2017
Case Law Update Email From: Line Can Be a Valid Signature • Khoury v. Tomlinson, No. 01 -16 -00006 -CV, 518 S. W. 3 d 568 (Tex. App. Ct. March 30, 2017). • Email outlined terms of agreement, response email stated “We are in agreement” and did not contain a signature block or typed name • The appellate court held: • • © ESRA 2017 The emails constituted an electronic record under UETA The From: line constituted an electronic signature because it served the same “authenticating function” as a signature block
Smart Contract Alliance Whitepaper The purpose of the whitepaper is to provide a plain language explanation of smart contracts and where they fit within existing law. Important takeaways will be: • What is a smart contract? • To the extent that smart contract technology is embedded with the terms of a legal contract, existing law and traditional legal analysis still apply and ensure efficacy. • Specifically, the Electronic Signatures in Global and National Commerce Act (“ESIGN Act”) and the Uniform Electronic Transactions Act (“UETA”) provide sufficient legal basis to guarantee that a smart contract embedded with the terms of a legal contract will be granted efficacy. • Because existent laws already provide a sufficient legal foundation for the enforcement of these types of agreements, we believe additional legislation will only serve to confuse the marketplace and potentially hinder innovation. © ESRA 2017
State Activity on Virtual Currency and Blockchain AL, AK, CA, FL, NH, NJ, ND, VT, WA, WV • Adding virtual currency to definition of money transmission; otherwise regulating virtual currency; or study it. AZ • Defines “blockchain technology” – means DTL that uses a distributed, decentralized shared and replicated ledger, which may be public or private, permissioned or pemissionless, or driven by tokenized crypto economics or tokenless. The data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth. • Defines “ smart contract” – means an event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on that ledger. • Recognizes signatures secured through blockchain as an electronic signature • Recognizes records on the blockchain as an electronic record • Permits smart contracts in commerce and may not be invalidated solely on the basis that it contains a smart contract term • Grants rights of ownership of information on a blockchain (Enacted) HI • Establishes a working group to study uses of and best practices regarding © ESRA 2017
ESRA Standards Update Bill Brice, CEO, Alpha. Trust © ESRA 2017
ESRA Standards Committee Update Our Group: This committee’s objective is to create a set of ESRA Standards that define trustworthy electronic records that can be relied on, especially by third parties who did not participate in their creation. Status: Initial drafting activities by the Drafting sub-committee have been completed. An initial draft is now ready for the first review cycle. Next Steps: Drafting and review cycles will continue until a Version 1 candidate is ready. This candidate standard will be reviewed and approved by the ESRA Board. © ESRA 2017
ESRA Standards Committee Roles and Membership Drafter Reviewer Advisor Bill Brice, Alpha. Trust John Levy, IMM Rahim Kaba, e. Sign. Live Pem Guerry, Signix Tom Rauscher, Topaz Systems Matt Kallman, Compliance Systems Michael Chodos, Notarize Tom Smedinghoff, Locke Lord Harry Gardner, Docutech Marc Aronson, PAN Whitney Bouck, Hello. Sign Mark Ladd, Simplifile Nish Shah, IMM Grady Mc. Nett, Prestige Financial Teresa Garcia, Wells Fargo Raj Penugonda, Freddie Mac Melanie Feliciano, Doc. Magic Joel Hardi, Equifax © ESRA 2017 Danny Zollman, Docu. Sign
DRAFT ESRA Baseline Standard 1 (ESRA-1) Sections: • Purpose • Introduction • Notation and Conventions • Definitions and Abbreviations • Risk Assessment • Document Processing Model © ESRA 2017
DRAFT ESRA Baseline Standard 1 (ESRA-1) Sections (cont’d): • Identity and Authentication • Electronic Record Formats • Electronic Record Workflow • Audit Data and Metadata • Electronic Record Processing Requirements • Appendix A - References © ESRA 2017
DRAFT ESRA Baseline Standard 1 (ESRA-1) Types of Standards: • Baseline Standards – contain core requirements common to all operating standards • Operating Standards – defines the requirements for a specific class of use cases © ESRA 2017
DRAFT ESRA Baseline Standard 1 (ESRA-1) Informative Sections: • Informative sections are indented to educate the reader on the particular issues related to electronic records and sigantures to guide them in selecting the best Operating Standard to rely on. • Includes: Risk Assessment, Document Processing Model, and Identity and Authentication © ESRA 2017
DRAFT ESRA Operating Standards Example Operating Standards (not fully defined): • ESRA Operating Standard 101 (ESRA-101): Electronic Record: Basic • ESRA Operating Standard 102 (ESRA-102): Electronic Record: Assurance Level 1 • ESRA Operating Standard 103 (ESRA-103): Electronic Record: Assurance Level 2 • ESRA Operating Standard 104 (ESRA-104): Electronic Record: Assurance Level 3 © ESRA 2017
DRAFT ESRA Operating Standards All Operating Standards will all reference the Baseline Standard. The differences between Operating Standards will be related to additional needs for specific classes of use cases, such as: • Authentication Requirements • Disclosure Requirements • Compliance Requirements © ESRA 2017
DRAFT ESRA Baseline Standard 1 (ESRA-1) Electronic Record Formats Section: • Discusses the importance of permanence in the electronic record – not subject to alteration without detection • Reviews common document formats and how to achieve this quality © ESRA 2017
DRAFT ESRA Baseline Standard 1 (ESRA-1) Electronic Record Processing Requirements: • This is the normative section that compliance will be measured against • Includes requirements for: • • • © ESRA 2017 Source documents User Authentication User Disclosures User Data Collection / Data Addition User Presentation of Records Final Form Requirements
e. Sign. Records 2017 – Annual Conference Update Michael Laurie, e. Sign. Live by VASCO © ESRA 2017
e. Sign. Records 2017 Annual Conference San Francisco, CA November 14 -15, 2017 © ESRA 2017
e. Sign. Records 2017 Parc 55, San Francisco, CA November 14 - 15, 2017 Networking Opportunities: Breakfast, Lunch & Reception Exhibits and Speakers… © ESRA 2017 New This Year! Quick Demos
e. Sign. Records 2017 Speakers: Day 1 Title Speaker(s) Session A 1 - Keynote The Future of Digital Brian David Johnson Session A 2 ICYMI David Whitaker & Margo Tank Session A 3 Life Insurance Transformed Rich Grisham Session A 4 e-Sign of Australian Mortgage Tim Roberts Session - Quick Demos 1 Adobe; 2 VASCO; 3 ___ Session B 1 The Future of Mobile Signatures Dan Puterbaugh Session B 3 ESRA Public Policy and Standards Update Ken Moyle & Bill Brice Session - Quick Demos 1 Alpha. Trust; 2 e. Original; 3 ___ Session B 4 Panel: The Digital Identity Revolution Kaba Rahim Session B 5 Mobile Contracting Customer Research Jacob Williams Session B 2 © ESRA 2017
e. Sign. Records 2017 Speakers: Day 2 Title Session C 1 - Keynote Blockchain & Distributed Ledgers Session C 2 e. Sign Basics Session C 3 Panel: E-Notarization and E-Recording: Present and Future Pat Frye & Marc Aronson Session C 4 Beyond e. Signatures, The Future of Digital Lies in Workflow Whitney Bouck Automation Session - Quick Demos 1 Wacom; 2 ___; 3 ___ Session D 1 Panel: Digital Mortgage: What is Real in a World Of Hype Session D 2 Session D 3 Session - Quick Demos Session D 4 Session D 5 © ESRA 2017 1 ___; 2 ___; 3 ___ Speaker(s) David Whitaker & Margo Tank Scott Shepherd
e. Sign. Records 2017 Sponsors (2) Platinum Adobe Tuesday Night Reception $12, 000 e. Sign. Live by VASCO (8) Gold $9, 000 Lunch Tuesday WACOM Lunch Wednesday Breakfast Tuesday Breakfast Wednesday AM Break Tuesday PM Break Tuesday AM Break Wednesday PM Break Wednesday Conference Lanyards Conference Notepads Conference Pens Registration Desk Wi-Fi (6) Silver $6, 000 e. Original Conference Bags Key Note Speaker Day One Alpha. Trust (2) Bronze $3, 000 USAA Supporter $1, 500 i. Pipeline © ESRA 2017
Break © ESRA 2017
e. Notary Research Update Jacob Williams, SVP, Wells Fargo Penny Reed, Strategy Consultant, Wells Fargo © ESRA 2017
Disclosure The views expressed during these presentations are directional and informative only and participants are urged to complete further research. © ESRA 2017
e. Notary Vernacular There are several governing artifacts to consider © ESRA 2017 § ESIGN – Electronic Signatures in Global and National Commerce Act § UETA – Uniform Electronic Transactions Act § RULONA – Revised Uniform Law of Notarial Acts § ULONA - Uniform Law of Notarial Acts § URAA – Uniform Recognition of Acknowledgements Act § UAA – Uniform Acknowledgements Act § URPERA – Uniform Real Property Electronic Recording Act § ULC – Uniform Law Commission § PRIA – Property Records Industry Association
e. Notary Research Findings e. Notary essentially controlled at the State Level • © ESRA 2017 Under ESIGN, UETA and/or URPERA, e. Notary should be an authorized act for most document types. • However, various state laws controlling real estate transactions complicate the adoption of e. Notary and therefore remote notary • Additional witness requirements • Recording requirements • Nexus for real estate transactions
Results of Research – Notary Law Research done from a real estate perspective included all 50 states and the District of Columbia All jurisdictions have some form of reciprocity from state to state but not all are standardized to include all notarial acts. © ESRA 2017
Results of Research - e. Notary • e. Notary confronts diverse progress in rule set adoption by states • e. Notary adoption is complicated by laws governing Real estate transactions • Advancing e. Notary may advance e. Recording at state and county levels © ESRA 2017
Results of Research - e. Recording • e. Recording is available in 1, 625 of 3, 312 recording jurisdictions in the country. – Three models of e. Recording: • I. Digitized document • II. Digitized document with XML • III. e. Doc – Not all jurisdictions accept all models © ESRA 2017
e. Notary Research - Recommendations for “Go Forward” Long Term Short Term Encourage e. Notary and remote e. Notary stakeholders to adopt a common strategy including: Encourage all stakeholders in the lending space to: 1. Coordinate efforts to pass RULONA, UETA and URPERA in remaining states. 2. Develop “sample rules” for Secretaries of State to facilitate implementation of e. Notary. Sample would also include recommendations for remote notary rules. 2. Develop a set of “core principles” for remote notarization legislation accommodating rule changes for future technology changes. 3. © ESRA 2017 Support ULC model language for e. Notary and Remote notary to harmonize/override language hidden or buried in artifacts governing real estate. Survey non-e. Recording jurisdictions to identify reasons for non-adoption. a) b) Can user base can assist with adoption? Continue PRIA efforts Commission PRIA tracking mechanism to identify e. Notary and remote e. Notary recording requirements (electronically or papered out) in all 3, 312 recording jurisdictions
Mobile Contracting Research Jacob Williams, SVP, Wells Fargo © ESRA 2017
The Mobile Contracting Landscape FACT Over three-quarters of Americans are now smartphone owners, and for many, these devices are a key entry point to the online world. — Pew Research Center, Mobile Fact Sheet, 2017 © ESRA 2017 Reality § 2016 NCLC - Paper statements: An important consumer protection § Small Device e. Sign Adoption § Little to no case-law § Chasing… “Clear and Conspicuous”
Understanding the customer takes time and the right approach. Wells Fargo partnered with IBM and VERSTA on customer research. Qualitative Approach Quantitative Approach § 35 patrons at a local Starbucks § 2007 respondents § Simulated mobile e-sign of a financial contract § Demographics aligned with current estimates of mobile device ownership based on Pew Research Center data § Participants chose from three device sizes: – i. Phone 5 (4”) – i. Phone 6 (4. 7”) – i. Phone 6+ (5. 5”) § Asked to review and sign a document. § Participants covered a range of demographic characteristics. © ESRA 2017 § The survey was 15 minutes in length and was implemented from December 7– 16, 2016 § The following data is from the quantitative
Among smartphone users, >90% do any type of online banking, and 2/3 rds use a mobile device. © ESRA 2017
Customers want to use smartphones, but reading industry-standard contract documents is a struggle © ESRA 2017
As they look into the future, nearly two-thirds say they would likely do the whole process from the mobile device if possible (>25% very likely) © ESRA 2017
Implications and Recommendations 1 Meet the customer where they wish to be met 2 Offer multiple options and pathways © ESRA 2017 3 User technology as the means, but not the end – People+ 4 Simplify, surprise and delight
[Working Group Name] Update © ESRA 2017
Lunch Speaker: Michael Zeldin © ESRA 2017
Voice of the Membership Topic: ESRA’s Role in e. Notary Policy © ESRA 2017
Working Group Huddle © ESRA 2017
Working Group “ 4 -Minute Updates” © ESRA 2017
e. Notarization (including Remote): Changing in Real-Time Michael Chodos, GC, SVP, Notarize © ESRA 2017
e. Notarization/Remote Working Group Our Group: Michael Chodos, Alec Cheung, Ann Gunning, Ashley Sadler, Curt Moy, Daniel Zollman, Darcy Mayer, Donna Leaman, Elizabeth Mc. Clure, Harry Gardner, Justin Ailes, Kelly Purcell, Ken Moyle, Kevin Park, Larry Torry, Mark Ladd, Marc Aronson, Nancy Pratt, Nga Nguyen, Penny Reed, Pem Guerry, Rahim Kaba, Raymond Janicko, Renee Alberty, Rick Triola, Tamara Strickland, Terry VB Status: Policy Drafted, Engagement Requested, Initial Projects Next Steps: Project Focus Required for full Impact © ESRA 2017
Projects Underway and Completed Pending Projects: • Leg and Reg Updates • AG Opinion re UETA • Standards, Recognition: • NASS-NPA, MBA, PRIA • ULC and Reg Engagement • Day in DC: Hill & Agencies • Identity & NIST 800 -63 -3 © ESRA 2017 Completed Projects: • Remote Policy Posted • Collaboration Letters Sent
Legislation and Standards © ESRA 2017 • Remote Legislation in 2017 Session • Enacted: TX, NV, OH • Pending and Carried Over: PA, NE, OK, MI, MO • Introduced: MD, CO, WA, IN, KY, NH (e. Will), FL (e. Will) • RULONA and e. Will Legislation Enacted: NV, CO, ID, WA • Model Legislation • ULC, MENA, [MBA? ] • Regulatory Efforts • TX, NV and OH • Standards Setting Efforts • NASS/NPAs, MBA/MISMO
California e-Recording Paul E. Flores, V-P and Underwriting Counsel, Fidelity National Title Group © ESRA 2017
CA e-Recording = CA e-Closings AB 2143 • 100% Digital e-Closings not possible before AB 2143 • AB 2143 signed into law in 2016 • Removes e-Recording barrier re recording digital instruments for real estate transactions • Subject to amending existing Electronic Recording Delivery Regulations ( 11 CCR 999. 100 et seq. ) • AG Advisory ERDS Committee has drafted numerous amendments • OAL process & publication of amended regulations to commence and be completed in 2018 © ESRA 2017
CA e-Recording Barriers Update Our Group: Works with CA Attorney General Advisory Committee in amending ERDS regs per AB 2143 Status: Drafting of amendments to Articles 2, 5, 6 and 9 of 11 CCR 999. 100 et seq. completed das of 7 -12 -17 Next Steps: Monitor OAL process to completion in 2018 © ESRA 2017
California UETA Non-Conforming Exceptions By Paul E. Flores, V-P and Underwriting Counsel, Fidelity National Title Group © ESRA 2017
Elimination of Non-Conforming UETA Exceptions Update Our Group: Advocates adoption of UETA statute as approved by NCCUSL in 1999 without non-conforming exceptions (CA Civ. Code 1633. 3(c)) Status: Waiting on finalization of Report on Consumer Benefits of Electronic Records Next Steps: Schedule meeting(s) in Sept. and Oct. 2018 with key CA legislators to discuss one or more plans to amend CA Civ. Code 1633. 3(c) © ESRA 2017
CA Non-Conforming UETA Exceptions CA Civil Code § 1633. 3 (c) • Removal of legal obstacles to e. Commerce • One Tactic Adoption of Consent ESIGN 101(c) in lieu of Civ. Code § 1633. 3 (c) © ESRA 2017 • ESRA approve Report on Consumer Benefits of e-Records • Schedule meeting with Pro-Tech Legislators
e. Mortgage Workgroup Harry Gardner, EVP of e. Strategies, Docutech © ESRA 2017
e. Mortgage Workgroup Overview Members Goal Promote / support e. Mortgage adoption How? Identify, help clear roadblocks Develop promotional materials Develop educational materials © ESRA 2017 Alec Cheung, BKFS Carmen Bramante, CDB Consultancy Danny Zollman, Docu. Sign Harry Gardner, Docutech Jacob Williams, Wells Fargo Jennifer Parker, Notarize Justin Ailes, ALTA Kelly Purcell, e. Relevant Ken Moyle, K 6 Partners Liz Mc. Clure, e. Original Marc Aronson, PA Assn of Notaries Margo Tank, Buckley Kolar Mark Fierro, e. Doc. Logic Mark Ladd, Simplifile Melanie Feliciano, Doc. Magic Paul Flores, FNF Rahim Kaba, Silanis/e. Sign. Live Raj Penugonda, Freddie Mac Rick Triola, Notary. Cam Susan Filanowicz, Fannie Mae Teresa Garcia, Wells Fargo Terry Van Bibber, Safe. Docs Tim Anderson, Doc. Magic
Issues Under Discussion Investor Acceptance • FHLBs • Private-Label • Warehouse Title Underwriters • Major concern over online e. Notary re: elimination of business risk ROI Proposition e. Notarization Patchwork • Not seen as a big obstacle; lenders • State laws vary widely are enthusiastic today • Some prevent practical use • Fannie Mae is developing a web • Broad lack of understanding based tool, will preview to us in among legislators August • Online e. Notarization could solve © ESRA 2017
Issues – Status Investor Acceptance • ESRA Workgroup exists e. Notarization Patchwork • ESRA Workgroup exists ROI Proposition • Awaiting preview of Fannie Mae tool Title Underwriters • Actively engaged in amending state laws to eliminate/minimize risks • TX, NV, FL, OH, CA, CO, and more • ESRA may assist in collaborative tasks as advocates Next Steps: Continue to monitor developments; look for areas of workgroup effort that don’t overlap © ESRA 2017
White Paper: Consumer Benefits of Electronic Statements Ken Moyle, President, K 6 Partners © ESRA 2017
White Paper Project Update Our Group: Ken Moyle, Donna Leaman, Kelli Messer Status: PPC review draft being prepared by Donna L Next Steps: PPC to review/approve Leaman draft next month © ESRA 2017
Electronic Wills Ken Friedman Ken Moyle © ESRA 2017
FHLB / FRB Mark Fiero, e. Doc. Innovations Also Ken Moyle! © ESRA 2017
FHLB Update Our Group: Donna Leaman, Dan Puterbaugh, John Jacobs, Kelly Purcell, Ken Moyle, Larry Torri, Mark Ladd, Mark Fierro Status: Ø Team education on current status at 3 FHLB affiliates. Ø Determine barriers to acceptance Ø FHLB surveying and educating members, many esigned documents accepted such as applications and disclosures Ø FHLBanks actively commenting on National Mortgage Note Repository Act Next Steps: Monitor progress and assist as requested. © ESRA 2017
FHLBank – Education to Members https: //vimeo. com/207695646/d 66 dae 48 e 2 © ESRA 2017
Barriers to Acceptance Member Banks Ø Use of Non-MISMO Compliant Systems Ø Platforms that do not create a single authoritative copy Ø Lack of understanding of what constitutes an e. Note FHLBanks Ø Lack of case law on enforcement of security interest on e. Notes Ø Determinizing the valuation of e. Notes due to lack of active purchasing market for non-secondary market compliant e. Notes © ESRA 2017
ADA Team John Levy, EVP, IMM © ESRA 2017
Americans with Disability Act Prohibits discrimination against people on the basis of them having a disability. 20% of Americans live with a disability © ESRA 2017
ADA Team Update Our Group: Renee Alberty, Alec Chung, Mark Fierro, Harry Gardner, Dan Puterbaugh, Michael Chodos, Marc Aronson, Margo Tank, Ken Moyle Status: Team Education, Knowledge Transfer, Warn of Impact Ahead (litigation risk) Next Steps: Create data sheet for ESRA website Meet with DOJ • Understand expectations • DOJ Timeline Final Rule • Day in DC/ADA talking points • e. Sign. Records 2017 speaker © ESRA 2017
Many Challenges Website Accessibility • Includes “other” digital platforms • Department of Justice (DOJ) • No technical standards for website accessibility • 2018 ETA Final Rule • What is needed to comply? © ESRA 2017
Existing Guidelines Website Accessibility • Web Content Accessibility Guidelines (WCAG 2. 0) • Level A, AAA • Four Keys • Perceivable • Operable • Understandable • Robust © ESRA 2017
Many Challenges Preemptive, Aggressive Demand Letters • Juan Carlos Gil, Plaintiff v. Winn-Dixie Stores, Inc. , Defendant • Robles v. Domino’s, Kidwell v. Sea World, National Assoc. of the Deaf v. Netflix, National Federation of the Blind v. Target • Economic Impact • Losers forced to WCAG 2. 0 AA • Plus attorneys fees © ESRA 2017
© ESRA 2017
https: //www. natlawreview. com/article/cautionary-ruling-website-accessibility-gil-v-winn-dixie-stores https: //www. natlawreview. com/article/federal-court-los-angeles-dismisses-website-accessibility-claims https: //www. natlawreview. com/article/defending-against-website-accessibility-claims-recent-decisions-suggest-prima http: //accessdefense. com/? p=3388 77
Blockchain Working Group David Brinkman, President & CEO, Assure. Sign © ESRA 2017
Blockchain Update Our Group: The Blockchain WG consists of industry, technology and policy leaders who have a stake in understanding and influencing the policy/regulatory environment providing guidance both industry and government. Status: Draft Public Policy Completed Next Steps: Increase visibility of ESRA’s “First Do No Harm” position on ESIGN and UETA once policy is adopted. © ESRA 2017
What is Blockchain? Record of Transactions • • • © ESRA 2017 Distributed Immutable Electronic Record Represents a new way to record transaction Nothing inherent in Blockchain exempts the technology from conforming with ESIGN, UETA or other similar definition.
What Blockchain is NOT? • Cold Fusion • A Process in need of Regulation • An Electronic Signature While Blockchain has gained enormous attention of industry and government, there are still considerable obstacles to overcome for meaningful adoption. © ESRA 2017
Blockchain Public Policy Working Group Marc Aronson David Brinkman Michael Chodos Brian Casey Michael Laurie Curt Moy Rahim Kaba Harry Gardner Dan Puterbaugh Margo Tank Larry Torri © ESRA 2017
IRS e-Signature Bill Ken Moyle, President, K 6 Partners © ESRA 2017
IRS Senate Bill Project Update Our Group: Ken Moyle Status: Electronic Signature Standards Act of 2017. Bill has not been sent to a committee; ESRA sent letter to sponsors offering help Next Steps: Poll ESRA membership regarding support or opposition to the bill © ESRA 2017
S. 1074 Bill Text “(3) PUBLISHED GUIDANCE. — “(A) IN GENERAL. —The Secretary shall publish guidance as appropriate to define and implement any waiver of the signature requirements or any method adopted under paragraph (1) [of section 6061(b) of the Internal Revenue Code]. “(B) ELECTRONIC SIGNATURES FOR THIRD-PARTY DISCLOSURE AUTHORIZATIONS. —Not later than 6 months after the date of the enactment of this subparagraph, the Secretary shall publish guidance to establish uniform standards and procedures for the acceptance of practitioner signatures of digital or other electronic form for purposes of— “(i) any request for disclosure of a taxpayer's return or return information under section 6103(c), and “(ii) any power of attorney executed by the taxpayer. © ESRA 2017
Support / Opposition points Support - Quick solution to esignature adoption issues - May motivate IRS to adopt wider set of standards © ESRA 2017 Oppose - Unnecessary - May cloud applicability of ESIGN - Limited to practitioners
e. Titling Work Group Ann Gunning, CIO, Decision Dynamics, Inc. © ESRA 2017
e. Titling Work Group Purpose Support and encourage the adoption of interstate and intrastate electronic processes for automating the public document processing involved with vehicle financing and sales, specifically registration and titling. © ESRA 2017
e. Titling Work Group Our Group: Brian Casey, Curt Moy, Dean Polsfut, Donna Leaman, Donna Ragsdale, Ann Gunning, Jonathan Means, Ken Moyle, Kevin Park, Marc Aronson, Michael Chodos, Michael Laurie, Mike Batchelor, Rick Triola, Scott Trainor, Terry Bibber Status: • • • Meetings with AAMVA (Feb, May) Interactions with states regarding e. Titling programs: AL, AZ, CO, GA, IA, OR, SC, TX Working on systematic outreach to state DMVs regarding e. Sig, e. POA, e. Title © ESRA 2017
No recent changes. Multiple states implementing new programs or enhancing existing ones. © ESRA 2017
e. Titling Workgroup Update Next Steps: • Continue AAMVA involvement • NMVTIS, e. Odometer, NHTSA • Expand state DMV outreach • Educate on esignature, NIST • Best practices between states © ESRA 2017
Break © ESRA 2017
The Rise of Video ID Dan Puterbaugh | Adobe © ESRA 2017
Video is everywhere It’s how we communicate ideas. It’s how we talk. It’s how we share data. It’s how we transact. © ESRA 2017
[Slide Title] KYC/Anti. Money Laundering © ESRA 2017 Certificate Authenticatio n
Know Your Customer/AML Laws Know Your Customer (KYC) Collection and analysis of basic identity information Name matching against lists of known parties Assessment of risk on money laundering, terrorism, or ID theft Anti-Money Laundering Laws Require FSIs to prevent, detect, and report money laundering activities. An effective program requires FSIs to ID customers, establish risk controls, keep records, and report suspicious activities. © ESRA 2017
Certificate Authentication EU Pain Point § Increasing emphasis on AES and QES driving demand Current Process § Walk down to their local drug store § Meet with someone face-to-face § Time-consuming /hassle. § Not secure © ESRA 2017
Let’s watch a video about video © ESRA 2017
The Federal Financial Supervisory Authority of Germany issued new guidance on requirements for the use of video identification procedures effective June 15, 2017 © ESRA 2017
Requirements - Training § Must be carried out by trained employees § Must have knowledge of test methods and forgery techniques of IDs § All training materials must be s updated at regular intervals (at least once a year) or if the law changes © ESRA 2017
Requirements - Consent § Must have their explicit consent to the fact that the entire identification process, as well as photographs or screenshots of the person and their ID are recorded. © ESRA 2017 § The consent is to be explicitly recorded. § Must be carried out in real-time and without interruption.
Requirements - Security § © ESRA 2017 Audiovisual communication must be adequately secured - only end-to-end encrypted video chat is permitted.
Requirements - ID © ESRA 2017 § photos / screenshots of person and ID § Identify holograms, kinegrams, on ID § Manipulation, “the dance” manipulation of parts or elements of ID; obscure ID with hand, cover face, § verify that the identity card safety features do not reveal any artifacts which indicate a corresponding manipulation.
Requirements: Audit and Verification § Video must be available to auditors § Many require “ 2 Factor (Person) Authentication” A second individual watches the video. § ID is only final once both agree. © ESRA 2017
? © ESRA 2017
Thank you for participating in the Summer Members Meeting Register today for e. Sign. Records 2017 November 14 -15 in San Francisco © ESRA 2017
- Slides: 106