Important Note to Notaries: The new Colorado fee itemization rules may be subject to differing interpretations as they are implemented. Please check back regularly for the latest updates to ensure that you are in compliance with the rules.
Effective April 30, 2024, new administrative rules adopted by the Colorado Secretary of State affect every Colorado Notary who charges a fee for providing general or retail Notary work, or for Notary Signing Agent (NSA) services. Colorado Notaries who charge customers for notarizations and other services related to those notarizations must disclose and provide a document itemizing their fees to the customer, and Notary Signing Agents who are paid by title companies and other third parties to perform signing services do not.
The National Notary Association recommends several standards of practice that will help Colorado Notaries comply with the new rules.
What the new Colorado Notary fee itemization rules require
The Colorado Secretary of State recently adopted administrative rules that take effect April 30, 2024, creating new requirements that apply to all Notaries who charge fees for their services, including Notaries who perform general Notary work or who work in retail establishments such as postal stores, and independent contractors who are NSAs.
The new rules have two parts. First, the rules require Notaries to inform a customer verbally or in writing of all fees to be charged before they perform the notarial act.
Second, the rules require Notaries to provide a written document to the customer listing the fee or fees charged. Notaries must indicate a zero charge ($0.00) if no fee is to be collected for the performance of the notarial act, and include any other fees, such as document preparation or travel fees. This document may be a closing statement, itemized invoice, receipt, transaction summary, or any similar document.
Failing to follow the new rules could jeopardize the Notary’s commission. If a Notary fails to provide a document itemizing the specific charge for any notarial act they perform and any ancillary fees related to the notarial act, the amount charged will be presumed to exceed the statutory fee allowed in CRS 24-21-529. As a result, the Notary could face administrative action against their commission for failure to comply with the Notary Public fee statute.
Why the new rules were needed
The Colorado Secretary of State said in the basis for final rulemaking it “has received various complaints related to whether a notary public has charged more than the statutorily authorized amount for a notarial act” and that the rules were adopted to “address the ambiguity in the practices of some notaries public.”
The public record of the rulemaking proceedings dealt almost exclusively with the issue of how fees for Notary Signing Agent (NSA) services are disclosed to consumers. In oral testimony at the public hearing and in written comments sent to the Secretary of State, Notaries and title insurance representatives described the longstanding industry practice of third parties paying NSAs a flat fee for all services, including notarizations, that they perform at a mortgage loan closing.
Testimony also explained the fee disclosed to the borrower for settlement services on the mandatory federal Closing Disclosure and closing statement also is a lump sum and buried in it is the fee for scheduling and paying the NSA. Concern was voiced that if the NSA provided an itemized invoice of notarial and non-notarial fees to the borrower after the Closing Disclosure is issued, any discrepancy between the two documents would automatically trigger the federal mandatory 3-day delay in the closing of the loan.
In adopting the final rules, a key goal of the Secretary of State was to give customers of notarial services greater transparency into the fees they are charged. At least for general and retail Notary work, the new rules should provide needed clarity. For mortgage loan transactions involving NSAs, the NNA believes the settlement services industry must help consumers better understand the fees they are paying for signing agent services in connection with their loan and ensure the NSAs they hire meet their compliance obligations to the Colorado fee itemization rules. (See a word to NSA contracting companies and closing agents, below).
The new rules and Notary signing agents
The best practices for complying with the new fee itemization rules that apply to Notary Signing Agents differ from the practices that apply to Notaries who do general or retail Notary work. (See general or retail Notary best practices for complying with the new Colorado Notary rules, below.)
This is so for at least a couple of reasons. The first is that title companies and signing services the NNA has spoken with have expressed strong concerns with an NSA discussing fees with or providing an invoice of fees to their customers. They contend the borrower in a loan transaction is not the NSA’s customer. The NSA is paid by a third party to the transaction and that third party is the NSA’s customer, not the borrower. Then there is the issue that should the NSA discuss fees with and provide a written itemization of fees to the borrower, the borrower would be confused and think they must pay the NSA directly when the NSA’s fee is paid by a third party that contracts with the NSA. Finally, any written itemization of fees an NSA provides to the borrower could trigger the federal mandatory 3-day holding period while the figures appearing on the NSA’s written itemization of fees and the borrower’s Closing Disclosure are reconciled, delaying the closing.
Second, while the carve out given to employees of title companies in the rules does not apply to independent contractor NSAs, the Colorado Secretary of State’s office informed the NNA that Notary Signing Agents may be exempt from the new rules if there is no charge attributed to a notarization and the NSA is only paid a flat fee for all services they render.
The Secretary’s interpretation, which has been confirmed to the NNA by others, is consistent with how the NNA views Notary Signing Agent fees.
Therefore, the NNA recommends the following best NSA practices to Notaries who want to be exempt from complying with the new fee itemization rules.
- Change the way you view your Notary Signing Agent fee. It is critical that you view the fee you are paid by your contracting companies as a signing services fee and not a Notary fee. NSAs are paid a single fee by their contracting companies for providing signing services in a loan transaction, and most of these services are non-notarial services. And you are paid by a third party under a written contract with them and not directly by the customer as would be the case if you were performing general or retail Notary services and directly charging customers for those notarial acts.
- Do not discuss your fee with nor provide a written document itemizing your fee to a borrower. The borrower in a loan signing transaction is the title company’s or closing agent’s customer. They are responsible for discussing fees with their customer, not you. Most importantly, if you do not charge a Notary fee, the Secretary of State has said you are exempt from disclosing and providing a written itemization of your fee.
- Indicate zero ($0.00) for the Notary fee in your journal. Since you are not directly charging a Notary fee to a customer for notarial services like you would if you were performing general Notary work, there is no requirement to document the signing services fee you are paid by your contracting company in your journal. If you do, that evidence could be used by the Secretary of State to prove that you did in fact charge for the notarial act and were obligated to comply with the fee itemization rules.
- Only invoice your contracting company for your signing services fee. Your customer in a loan signing assignment is the third-party company that hired you. You are being paid under a contract you signed with them. You can label your fee on your invoice as a fee for “signing services” or “courtesy closer services.” Do not label it as a “Notary” fee or a fee for “notarial services.”
One important caveat: These best practices apply when you are hired and paid by a third-party company. The NNA has learned there are isolated cases when an NSA may be scheduled through a third-party company but paid directly by the borrower through closing. An example might be a borrower requesting a mobile loan signing with an NSA because they live in a remote area of the state and cannot make it into a local title office for the closing. In these cases, you should:
- Confirm with your hiring company that the borrower, and not the hiring company, is paying you for your signing services directly through closing.
- Inform the customer of your signing services fee verbally or in writing in advance of the loan signing appointment, preferably before you travel to the appointment.
- Provide a written invoice to the borrower at the signing appointment stating zero ($0.00) for the notarization fee and the amount of your signing services fee. You should use the term “signing services fee,” “courtesy closing fee” or the like and not “Notary fee” or “Notary Signing Agent fee.”
- Do not record any amount of your signing services fee in the Notary fee space in your journal, as recommended above.
A word to NSA contracting companies and closing agents
The new Colorado Notary fee rules were shaped by the fee disclosure practices in the real estate settlement services industry. However, the new rules directly affect the Notaries who provide signing services in your transactions because the Colorado Secretary of State regulates them and not you.
The NNA has provided the recommended practices to Notaries in this article because these practices:
- Are consistent with the Colorado Secretary of State’s interpretation of the new fee rules.
- Will enable NSAs to comply with the new fee rules.
- Will enable you to comply with your obligations under the federal Truth in Lending and Real Estate Settlement Procedures Acts.
- Are consistent with industry practices for compensating NSAs.
It is the NNA’s position that while contracting companies and closing agents are not directly regulated by this rule, every company and closing agent who utilizes the services of NSAs has an obligation to ensure that NSAs comply with the new rules.
To help NSAs do this, the NNA urges you to do two things. First, in general, be more transparent with your customers about the services NSAs perform in your transactions and the fees you pay them. Second, more specifically, change the way you label the fees you pay NSAs on your closing statements. We urge you to use descriptors such as “signing services fee” or “courtesy closer fee” or the like and not label it as a “Notary fee” or “Notary Signing Agent fee.” Those descriptors could confuse your customers into thinking they were overcharged for “Notary” services, especially if that fee contains the lump sum for compensating the NSA and any third-party scheduling the NSA. The NSA also could possibly be called to account for why they did not follow the fee itemization rules and their Notary commission could be endangered.
In labeling the fee in this way, it is also the NNA’s position that NSAs should be paid the same fee even though they will be invoicing you for signing services and not for performing notarial acts.
General or retail Notary best practices for complying with the new Colorado Notary rules
The NNA recommends the following best practices for complying with the new rules to Notaries who perform general Notary work or provide retail Notary services. Note: These practices do not apply to Notary Signing Agents who perform loan signing services. (See the new rules and Notary signing agents above.)
Before the notarization:
- Prepare a written document that itemizes the fees you will be charging. Even though the rule allows Notaries to communicate verbally with the customer about this, providing a written document to the customer will enable you to retain evidence that you complied with the rule.
- Itemize EVERY fee you will be charging. Be sure to itemize every notarial and ancillary fee you intend to charge the customer because if you forget to notify the customer of a particular fee in advance of performing the notarial act, you can’t add it later. If in the transaction you are not charging a fee for the notarization but are charging fees for non-notarial services, indicate zero ($0.00) as the fee for the notarization and itemize the charges for the non-notarial services.
- Email the written document to and obtain confirmation from the customer before you travel. If you must travel to perform the notarial act, we recommend sending the written document ahead of time and obtaining confirmation from the customer that they received it before you commence travel.
- Bring two hard copies of the written document to the notarization. This step is advisable if you verbally discuss your itemized fees with the customer over the phone and is a backup if the customer does not respond to your email requesting confirmation of having received the written document itemizing your fees.
At the notarization:
- Ask the signer to initial or sign both copies of the written document you provided before the notarization. Give one copy to the customer and keep the other for your records as evidence that you complied with the fee itemization rules.
- Provide an itemized receipt to the customer before leaving the notarization. The itemized receipt is in addition to and differs from the written document described previously in that the receipt lists the actual charges the customer paid to you, whereas the written document lists the itemized fees you intend to charge. We recommend using a receipt or invoice that provides a duplicate copy, such as the NNA® Notary Receipt Book or Basic Journal with Receipts. Ask the customer to initial or sign the receipt. If you are using a receipt or invoice pad that uses carbon or NCR (carbonless) copy paper, do this before removing the “original” (top) page of the receipt.
- Document the evidence you provided to the customer in your journal. If you are using an NNA Notary Journal, note in the Fee space the amount of the fee you charged the customer for the notarization and in the Additional Information space any non-notarial fees related to the notarization you have itemized in the written document and charged to the customer. Also note in the Additional Information space that you provided the written document itemizing your fees and, if applicable, a receipt (with the receipt number noted) to the customer.By following these best practices, you will ensure your customers understand the fees they are charged, and you will retain valuable evidence that could be used if your compliance with the rules is ever questioned.
This article will be updated with new information as the NNA receives it. Check back regularly for updates.
