Senate committee adopts amendment to SB 406 to tighten deed-recording identification; some advocates say measure doesn't go far enough

A Senate committee on an unspecified date voted to adopt an amendment and pass SB 406, a bill aimed at deterring property deed fraud by requiring identification for a person listed as the grantor when a deed is recorded.

The amendment, presented by Senator Clark, clarifies that the person listed as grantor includes trustees of a trust, a member of an LLC, a president of a corporation, or an attorney-in-fact acting under a power of attorney. The amendment also removed a requirement to record a copy of the grantor's driver's license in the public deed record; instead, the driver's license would be kept by the circuit clerk under seal and would not be part of the public recording.

The committee also amended the bill to exempt certain public actors from the identification requirement, including the commissioner of state lands and individuals representing the state, municipalities, counties and political subdivisions when those entities deal in real property.

Senator Clark said the bill addresses a growing problem of "seller impersonation fraud," in which bad actors forge deeds or otherwise impersonate property owners to transfer title. "This is about title security, and helping prevent titles from being stolen," Clark said. He told the committee the issue disproportionately affects elderly homeowners and can cost victims tens of thousands of dollars to reverse.

Micah Bono, identified in testimony as a Celine County circuit clerk representing the Circuit Clerk Association, described the circuit clerks' support for measures that create a searchable, nonpublic way to identify who submitted a deed in the event of a suspected fraud. "We're working even to notice if there's a fraudulent notary," Bono said, describing pilot software some clerks are testing to flag suspect filings.

Kyle Sylvester, Washington County circuit clerk and legislative chair for the Arkansas Circuit Clerk Association, told the committee the requirement to maintain identification on file gives clerks a starting point for investigations: "This particular bill will give us a head start on trying to identify those bad actors with requiring the identification that we'll keep on file of the person that filed this particular deed if it is fraudulent in itself."

Not all testifiers supported the amended bill. Paul Hayes, a citizen who said he is not representing an organization, urged the committee to restore language from an earlier draft that he said would have permitted property owners to place a protective freeze on their title at the clerk's office. Hayes described a proposal that would let an owner pay a fee and sign a form so that any transfer would have to be executed in the clerk's presence; he argued the change would more effectively prevent fraud than retaining identification under seal. "Making a copy of a driver's license and stick it in the file may give you a warm fuzzy feeling, but it doesn't prevent diddly squat," Hayes said, urging a return to the original, stronger approach.

Senate members and other testifiers described this amended bill as a first step and said further refinements likely will be needed in future sessions. After discussion, the committee adopted the amendment and then voted to pass SB 406 as amended. The transcript records the committee adopting the amendment and approving the bill in committee, but it does not list a roll-call vote or numerical tally in the record provided.

The bill references a prior filing, SB 69, which committee members said was an earlier version and remains on a deferred list. Committee members and testifiers also noted ongoing coordination with the Uniform Law Commission and national study groups tracking similar property-fraud measures in other states.

The committee's action sends SB 406, as amended, forward from committee. Committee members and several testifiers said the work is likely to continue in subsequent sessions to add protections such as owner freeze options or additional safeguards against forged notaries.