Albany sig

The New York state Capitol in Albany

ALBANY — Gov. Andrew Cuomo rolled out a new draft regulation designed to discourage "predatory practices" in the bail industry — though a trade group argues it could force some bond agents to close their businesses.

The Cuomo administration said an ongoing investigation by the state Department of Financial Services found that New York's bail industry is riddled with practices that lead to "abuses" victimizing vulnerable consumers.

The initiative to target the industry with tighter state oversight comes after the governor failed in his push this year to end cash bail for persons charged with misdemeanors and non-violent felony offenses. Cuomo has argued the state's jails are packed with too many poor people who are locked up simply because they cannot come up with enough money to be released on bail.

In introducing the new package of rules, Cuomo said: "These reforms are critical in our efforts to crack down on predatory practices in the bail bond industry and protect New Yorkers from unscrupulous activity and ensure that everyone, regardless of economic status, is provided fair and equal treatment under the law."

The draft regulation would require bail agents to disclose their responsibilities to consumers and the contractual rights of their clients. It would also require agents to return collateral and premiums to consumers "where appropriate."

The president of the New York State Bail Bondsmen Association, Michelle Esquinazi, acknowledged that current regulations need to be updated but contends the Cuomo administration's approach appears to be part of a national campaign to end the commercial bail industry.

Esquinazi argued that critics of the industry have lost sight of the fact that bail agents provide services at no cost to taxpayers while helping to keep communities safe from law breakers.

A better approach, she contended, would be for the state to set up a "blue ribbon commission" to study ways to iimprove bail services rather than "rushing" through regulation.

"We're hoping our Legislature considers all sides on this issue, including those of the victims of crime," Esquinazi said.

The critics of commercial bail agents include the New York City Bar Assocation. One of the group's committees, in a report filed with the Department of Financial Services, called for the industry to be eliminated, noting only the United States and the Philippines allow commercial bail companies.

"Even when it operates completely within the bounds of the law, the commercial bond industry extracts an incredible amount of wealth from people, particularly loved ones and relatives of the accused, caught up in the criminal justice system," the committee said in its report.

It also argued that allowing bond companies to have a voice in pretrial release decisions is "inconsistent with New York's progressive values."

Secretary of State Rossana Rosado, a Cuomo appointee, said new consumer protections are needed because those needing the services of bail agents are "often overwhelmed with the unexpected expense, urgency and potential impact of the underlying criminal charges."

State officials said they are continuing to gather public comment on the draft regulation.

   

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com