SOURCE: National Notary Association

March 13, 2007 13:56 ET

North Carolina Attorneys Seek Monopoly on Closings at Consumers' Expense, According to the National Notary Association

Proposed Legislation Offers Consumers No Added Protection, Restricts Competition and Adversely Affects Borrowers' Cost and Convenience in Real Estate Closings

CHATSWORTH, CA -- (MARKET WIRE) -- March 13, 2007 -- The North Carolina Bar Association, in a move to protect attorneys' fees and monopolize real estate closings, has proposed legislation that will severely limit borrowers' choices, drive up costs and restrict commerce.

The bill, expected to be introduced this month, has been decried as a move by the Bar Association to limit consumer freedom and wipe out competition. The Federal Trade Commission has previously opposed similar efforts by the bar associations in North Carolina, Massachusetts and Georgia and by the American Bar Association.

The legislation would restrict anyone but attorneys and bank officials from presiding over routine real estate and mortgage closings, even though it is common and legal for Notaries to conduct such closings in 43 states. The evidence suggests that attorneys do not deter fraud; in fact, Georgia, an attorney-only state, has one of the highest incidences of mortgage fraud in the nation.

Timothy Reiniger, Executive Director of the National Notary Association, said the bill, if passed, would create the first state-mandated lawyer monopoly over real estate closings. He said closing costs in North Carolina -- which are low partly due to competition between lawyers and non-lawyers -- should remain low.

"North Carolina lawyers are proposing the type of monopoly that has driven up costs time and time again," Reiniger said. "Eliminating competition is a terrible move that will make lawyers more money at homeowners' expense."

The Bar has argued that attorneys are needed at closings to protect buyers and catch mistakes. But in cases of deceptive lending, misrepresentations most often occur prior to closing, according to the FTC. The FTC and the U.S. Justice Department have repeatedly said there is no credible evidence that consumers are harmed by non-attorney closings. The Kentucky Supreme Court also has issued an opinion confirming the government's findings.

Edward J. Krug, an attorney and member of the Title/Appraisal Vendor Management Association, said the proposal is about attorneys monopolizing the business.

"We don't object to attorneys being involved in closings, but we think consumers should have a choice," he said. "We want to come up with a solution that makes sense for everybody. This legislation doesn't make sense."

Reiniger said the NNA is currently mobilizing the state's 105,000 Notaries and its members to oppose the legislation, and is calling on the title industry, consumer groups, the FTC, and the U.S. Department of Justice to actively join the fight.

About the National Notary Association

Founded in 1957, the National Notary Association (NNA) is committed to the professional development of Notaries throughout the United States by providing education, support and advocacy. The NNA also educates lawmakers, businesses and state officials on best notarial practices, and leads efforts to make necessary changes in the state and federal statutory framework. The Association has more than 300,000 members and offers nationally accredited Notary education programs.

Contact Information

    Timothy Reiniger
    Executive Director
    (818) 739-4032

    Kelly Rush
    Public Affairs
    (818) 739-4000 Ext. 4150