Following this year’s historic bail reforms by Governor Andrew M. Cuomo, Department of Financial Services (DFS) Superintendent Linda A. Lacewell today announced a new revised proposed DFS regulation to raise the standards of integrity in the bail business, protect vulnerable New Yorkers from abuses in the industry, and increase transparency in and understanding of the bail industry. The new revised proposed regulation follows DFS’ continuing investigation of the bail industry, a series of state-wide public listening sessions held jointly in June with the New York Department of State, and extensive public comment from consumers, advocates, industry and government stakeholders.

“DFS’ 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,” said Department of Financial Services Superintendent Linda A. Lacewell. “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. These updates continue the state’s leadership in the bail industry and ensures New Yorkers have more protections in place.”

In response to public comments, DFS amended the revised proposed regulation, as follows:

• Clarifies the duty of a bail agent to obtain the prompt release of a defendant;
• Mandates that premiums must be returned within 14 days, where appropriate;
• Explicitly limits the circumstances in which an indemnitor, such as a defendant’s family member or friend, would face any out-of-pocket costs;
• Prohibits renewal premiums; and
• Deems reasonable collateral that is 10 percent or less of the bail amount.

The new revised proposed regulation follows guidance DFS issued last year regarding the unanimous 2017 decision by the New York Court of Appeals in Gevorkyan v. Judelson that confirmed the Department’s position that under the New York Insurance Law, the premium follows the risk. When a defendant is not released from custody there is no risk to the surety company or the bail agent so they must return the premium.

In addition to the revised proposed regulation, DFS’ investigation remains ongoing and the Department encourages any affected party to contact it by telephone toll-free at (800) 342-3736 or by email at [email protected]. Bail agents who are found to have violated the law may be subject to license revocation or financial penalties.

The new revised proposed regulation is subject to a 45-day comment period following publication in the State Register on July 31, 2019.

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