A bail bonds agency. Photo: Paul Brady/Shutterstock

The state is proposing new regulations for the bail bond industry aimed at curbing practices that may be especially harmful to low-income defendants, Gov. Andrew Cuomo and the state Department of Financial Services said Tuesday.

The changes are intended to improve transparency in the bail bond industry for consumers and remove fees that go above the allowed costs under state law.

Cuomo said in a statement that the proposed changes will help crack down on “predatory practices” in the industry. 

“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,” Cuomo said.

The New York State Bail Bondsman Association said it is being drawn as “predators” based on a few individuals that operate either unethically or outside of the state’s regulations.

“We’re being portrayed as these evil, kind of greedy, cigar-smoking predators,” said Michelle Esquenazi, president of the association. “It’s just unfair.”

Esquenazi said it’s too early for the association to take a position on the proposed regulations. The state provides a 60-day comment period before a rule is finalized. That’s after a series of listening sessions on the issue earlier this year. The DFS also has an ongoing investigation into the industry.

One reform born from that feedback is a limit on extra fees that a bondsman can charge on top of premiums set by statute and other costs imposed by a court. The regulation seeks to ban bondsman from seeking any additional payment. Esquenazi said that ignores the realities of the industry.

“The fact of the matter is there are other costs associated from time to time with the deliverance of paperwork and things like that,” Esquenazi said. “If the system was more modernized like in other states, we wouldn’t have to have that.”

Bail bondsmen have not asked the state to raise the premium amount, though Esquenazi noted that New York has one of the lowest premium rates in the country.

Other parts of the regulation address transparency and accountability in the bail bond industry.

The DFS will have to approve all bail bond contracts and forms used by agents, for example. Agents will also have to give consumers a disclosure that outlines their rights, and the responsibilities of the agent. Agents will also have to give consumers receipts and copies of any documents used during a transaction.

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

The regulation will require closer supervision from surety companies for agents, who will have to improve their record keeping and reporting. They will also have to post their licenses and display signs on how to report a complaint against them.

The proposal will be promulgated by the DFS because it changes the state’s insurance regulations.

“DFS is proud to support the governor’s initiatives to protect New Yorkers from abuses in the bail industry by promulgating this new proposed regulation,” said DFS Superintendent Maria Vullo. “We will not allow bail agents to take advantage of New Yorkers who are often at their most vulnerable.”

Esquenazi said, if given the opportunity, the association will sit down with the DFS over the next two months to explain how the changes will affect the industry. They want to work with the state to improve the bail system, but also want to protect the industry from regulations that may impact their business.

“If what ends up happening is that everything is cohesive, we’re very happy to work with the state on every level,” Esquenazi said. “We, as an association, support good bail agents in the state of New York.”