Right before it recessed last week, the Senate passed a bill — the Interstate Recognition of Notarizations Act of 2010 — that could have made it more difficult for foreclosure victims to challenge banks that may have improperly approved their foreclosure. The legislation would have forced states to accept documents that were notarized in other states, under potentially different sets of notary standards, without verifying any of the documentation. The Senate passed the bill without debate and despite widespread reports of foreclosures across the country being approved by bank “robo-signers” (employees who weren’t verifying the necessary documentation to legally okay a foreclosure). This morning, The Wonk Room called on President Obama to veto the legislation. This afternoon, the White House announced that Obama will not sign the bill:
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.