Linda Lacewell, Department of Financial Services.

The state Department of Financial Services has revised a set of proposed regulations for the state's bail bond industry to curb harmful practices after extensive input from the public and stakeholders on the issue, the agency said Tuesday.

The changes were first proposed last year to improve transparency in the bail bond industry for consumers and remove fees that go above the allowed costs under state law. 

The agency has now tacked on a few additional sections to the regulation to further cut back on practices that criminal justice advocates have said disenfranchise defendants who rely on bail bonds to stay out of jail before trial.

DFS Superintendent Linda Lacewell said the revised proposed regulation would build on the reforms approved earlier this year by the state Legislature to change the state's laws on cash bail. Starting next year, most defendants charged with low-level crimes will be released without bail before trial.

“DFS's top priority is to protect New Yorkers from unjust practices in the bail industry to ensure everyone receives fair and equal treatment under the arc of justice,” Lacewell said. “With community input, the revised proposed regulation reduces burdensome out-of-pocket costs for New Yorkers who are at their most vulnerable and demands that bail agents exercise their duties promptly.”

The proposed regulation, with the new amendments, will now undergo a 45-day public comment period before it's finalized, according to DFS.

The new changes would further limit what costs can be charged to consumers by bail agents. It would also clarify that the duty of a bail agent is explicitly to obtain the prompt release of a defendant. 

Under the proposed regulation, bail agents would be required to return premiums to individuals within 14 days, where appropriate. If someone's case lasts long enough that their bond has to be renewed, bail agents would be barred from charging renewal premiums to the individual, DFS said.

The circumstances in which an indemnitor, like a family member or friend, would face any out-of-pocket costs, themselves, would also be limited by the regulation. Collateral would be deemed reasonable by the regulation if it's 10% or less of the total bail amount, according to the agency.

Michelle Esquenazi, president of the New York State Bail Bondsman Association, said they're largely unopposed to the regulation, which they helped develop with DFS over the past year. There are a few, small provisions they would tweak, Esquenazi said, but they're fine with most of it.

“We worked in conjunction with the department as a state association to achieve good regulatory goals for our industry in terms of how we interact with consumers,” Esquenazi said. “I think that, for the most part, the regulations proffered by the department are in line with our association's thinking.”

Those changes build on the initial regulation first proposed by DFS last year to address what Gov. Andrew Cuomo, at the time, called “unscrupulous behavior” by some in the bail bond industry.

The regulation would limit extra fees that a bond agent can charge in addition to the premiums set by statute and any costs of special bail conditions imposed by a court. Agents would not be allowed to seek any additional payment.

Much of the remaining provisions of the proposed regulation address transparency and accountability in the bail bond industry.

Any bail bond contracts used by agents would first have to be approved by DFS, for example. Agents would have closer supervision from surety companies under the regulation, and would have to improve their record-keeping and reporting. They'll also have to give consumers receipts and copies of any documents used during a transaction.

Bail agents would also be required to post their licenses and display signs on how to report a complaint against them. Individuals seeking a bond would have to be given information on the rights and responsibilities of the bail agent.

If a situation arises where a bail agent surrenders a defendant to the court and asks to cancel a bond, they would have to explain their reasons to the court and the defendant in writing. The regulation would also mandate a timely return of any collateral where appropriate.

The regulation would also apply to charitable bail organizations, which are set to expand in New York after state lawmakers approved legislation in June to broaden both the reach and capacity of those funds. The bill has yet to be sent to Cuomo for approval.

The proposed changes were sparked by an investigation from DFS into the bail bond industry and a series of listening sessions held by state officials last year. They found that, while many bail bond agents follow the state's laws and regulations, others have been known to abuse the system.

That's part of why New York City created its own rules for bail bond agents earlier this year. Those rules, promulgated by the city's Department of Consumer and Worker Protection, require bail bond agencies to give individuals information on their rights and display signs that explain pricing and detailed information about the agents.

Those rules went into effect the day after they were announced in May. Esquenazi said, compared to the city's rules, the state's regulation was more considerate of the industry while addressing the needs of consumers.

“The way the city of New York went about it was wholly punitive, but the way the state went about it was to protect the consumer and the integrity of the industry,” Esquenazi said.

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