Bail bond agents in New York state will soon be held to new regulations intended to protect consumers from unscrupulous behavior identified through an investigation into the industry from the state Department of Financial Services in recent years.

That investigation, which remains ongoing, led to an initial set of regulations proposed by the agency last year, which were amended and finalized Wednesday.

Under the new rules, bail agents won't be able to charge any extra fees to consumers that aren't previously set by statute, and new limits will be set on the amount of collateral required to procure a bond. That's a fraction of the agency's new regulations.

It builds on new legislation set to take effect in January that will eliminate cash bail as an option for most low-level and nonviolent crimes in New York. Those individuals will, instead, likely be released before trial without having to post bail.

DFS Superintendent Linda Lacewell said that, while the new regulations predated the state's new laws on cash bail, it will build on the measure by protecting consumers still eligible for bail.

"DFS is proud to support the governor's comprehensive justice agenda," Lacewell said. "This final regulation will help correct widespread misconduct in New York's bail bond industry, offering vulnerable New Yorkers an equal chance at justice."

Michelle Esquenazi, president of the New York State Bail Bondsman Association, said that representatives from the industry met with DFS a few times over the past year to go over the regulations for minor adjustments from the initial version.

"They're not bad. They're better," Esquenazi said. "I don't see anything in here that's jumping off the page at me that we didn't know was going to happen."

Esquenazi said that the majority of bail bond agents in New York state already follow the practices codified by the new regulations Tuesday, so there won't be much of a change for the industry.

The new regulations are intended to provide more transparency in the bail bond industry in New York and provide more opportunities for consumers to be informed about the state's protections for those seeking such a bond.

Bail agents will no longer be allowed to charge a renewal premium to consumers, for example. Current regulations allow a renewal premium to be charged when someone's case extends beyond the time of their bond. That practice will be banned by the regulations.

It will also be up to bail agents to obtain the prompt release of a defendant who's paid for a bond. If a situation arises where a bail agent surrenders a defendant to the court and asks to cancel a bond, they'll have to explain their reasons to the court and defendant in writing.

The regulations will also set new rules for collateral offered by defendants and the premiums they pay for a bail bond. If the defendant isn't released from custody, the bail bond agent will return their premium, in full, within two weeks.

Any fees outside the premium rate set by the state won't be allowed to be charged to consumers under the regulations. Bail bond agents have said that New York's premium rates are among the lowest in the country. 

Esquenazi said that change may be more of a problem for bail agents outside New York City, who may have to travel several miles to deliver documents. That adds to their costs, which may not be covered by the premium rates, she said.

"Sometimes when they take documents from a court to a jail, it might be several miles," Esquenazi said. "So for them, it might be problematic."

Bail bond agents will be required to accept 10% or less of the bond's value as a "reasonable" amount of collateral. That collateral will have to be returned to a consumer within 45 days after the end of a criminal proceeding. 

To ensure compliance, insurance companies and charitable bail organizations will also now have new standards for supervising bail agents. That includes directions on who they should report directly to, and a mandatory 30-day reporting requirement for violations.

Bail agents also will be required to retain records pertaining to a bond for at least six years with detailed information on that agreement. That information will include items like the amount of collateral collected, where the collateral is held, the premium amount and others.

Any forms used by bail bond agents will have to be approved by DFS before they're used with consumers. That's intended to encourage consistency and prevent agents from including provisions in those agreements that may be abusive.

Consumers have to be given a copy of their agreement with a bail bond agent under the contract, along with receipts and any documents involved with the transaction. Consumers also will be given a statement of their rights by the bail bond agent, according to the regulations.

The last part, while well intended, could be viewed by some bail bond agents as "onerous," Esquenazi said. That's not because of the statement of rights, itself, she said. It's because bail agents will be required to provide it to each consumer before an agreement is signed.

"I just think it's a bit onerous, in terms of that particular section," Esquenazi said.

Outside the actual agreement, bail bond agents will be required under the regulations to post their licenses publicly as well as signs about how consumers can make a complaint about them to authorities.

That part of the regulations, among others, is actually already in effect for bail bond agents in New York City. The city's Department of Consumer and Worker Protection promulgated its own regulations for the industry earlier this year. 

Under New York City's new rules, bail bond agencies are required to give individuals information on their rights and display signs that explain pricing and detailed information about the agents.

The state's new regulation is scheduled to take effect on March 19, 2020, according to DFS.

READ MORE: