SUPERINTENDENT LINDA A. LACEWELL ANNOUNCES FINAL BAIL REGULATION TO PROTECT NEW YORKERS FROM UNFAIR PRACTICES

Final Regulation with Community Feedback Includes Limits on Out-of-Pocket Costs for New Yorkers, Bans Illegal, Hidden Fees, Clarifies Duty of Agents to Obtain Prompt Release, and Mandates Return of Collateral Within a Specific Time Period

Follows Governor Cuomo’s Sweeping Reform of New York’s Criminal Justice System and Delivers on Governor’s Commitment to Root Out Unscrupulous Activities within the Bail Bond Industry

Following the enactment of this year’s historic bail reforms, Superintendent of Financial Services Linda A. Lacewell announced the Department of Financial Services (DFS) has issued a final regulation that raises the standards of integrity in the bail business, protects vulnerable New Yorkers from abuses in the industry, and increases transparency in and understanding of the bail industry. The final regulation follows DFS’ continuing investigation of the bail industry, a series of state-wide public listening sessions held jointly this past summer with the New York Department of State, and extensive public comment from consumers, advocates, industry and government stakeholders.

“DFS is proud to support the Governor’s comprehensive justice agenda,” Superintendent of Financial Services Linda A. 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.”

Under the final regulation:

  • Bail agents may not charge fees other than the premiums set by statute;
  • Agents and insurance companies may only use forms approved by the Superintendent, which serves to limit abusive terms and ensure consistency for bail bond purchasers;
  • Collateral of 10% or less of the bond amount will be deemed reasonable;
  • Collateral and premium must be returned within a set time period, where appropriate;
  • Bail agents must provide consumers with receipts and copies of all contracts and documents involved in the bail transaction;
  • Bail agents must explain and report any surrenders of a defendant to the court, DFS and the purchaser of the bond;
  • Insurance companies must supervise their agents more closely;
  • Bail agents must post their licenses and display "how to make a complaint" signs;
  • Bail agents must provide consumers with a statement of rights;
  • Bail agents and insurance companies must increase and improve record keeping and reporting;
  • Bail agents must obtain the prompt release of a defendant; and
  • Renewal premiums are not permitted.

The final 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 final regulation, DFS’ investigation on the bail bond industry remains ongoing and the Governor encourages any affected party to file a complaint with DFS at www.dfs.ny.gov/complaint. New Yorkers may also contact the DFS Consumer Hotline at (800) 342-3736, Monday to Friday, 8:30 a.m. to 4:30 p.m. Updates will also be provided on www.dfs.ny.gov/consumers/bail.

The final regulation will take effect on March 19, 2020 after publication in the State Register.

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