Press Release

Hertzberg Bill to Shine Light on Bail Surety Industry Passes Senate Floor

Bill would tighten requirements for and authorize a study of the bail insurance market

May 29, 2018

SACRAMENTO – Senator Bob Hertzberg, D-Van Nuys, today announced that his legislation to further his ongoing examination of the state’s bail industry, Senate Bill 898, cleared the Senate Floor and is headed to the California State Assembly.

SB 898, which is co-authored by Assemblymember Rob Bonta (D-Oakland), shines a light on the bail industry’s lending practices by authorizing the Insurance Commissioner to examine the bail insurance market, their profits, and the relationship between the risk assumed by the insurer and the rates charged to those seeking a bail bond.

As Sen. Hertzberg and Asm. Bonta continue to work with stakeholders to fine tune the details of SB 10 (the California Money Bail Reform Act of 2017), it has become clear that bail companies routinely exploit their customers not in the name of public safety but, rather, their bottom line. The Pretrial Detention Reform Workgroup convened by the California Chief Justice has also noted that beyond basic licensing information, relatively little statewide data are available on the bail industry’s operations in California.

“The number one duty of government is to protect the people,” said Sen. Hertzberg. “The for-profit commercial bail industry does not protect the people – it preys on the poor. Bail insurers reap the rewards of their clients’ misfortune, while shouldering virtually none of the risk.”

Commercial money bail requires people to pay nonrefundable deposits to private companies in order to secure release from jail; usually a 10% premium to a bail bond agent. If the charges are dropped or the defendant is found to be innocent, the fee is still never returned. This creates a great risk for working Californians who could potentially lose their job and housing.

A study by the UCLA School of Law released last year revealed that the industry enjoys unfettered power over their customers, who lack any semblance of consumer protections. After analyzing the fine print in more than 100 contract documents online corresponding to 10 sureties, the UCLA study identified 20 problems with the contracts that violated common notions of fairness and justice.

SB 898 would also require bail contracts to be posted online and be made available in additional languages, and requires bail companies to submit information about their lending practices to the California Department of Insurance.

It now heads to the Assembly, where it awaits committee assignment.

Media Contact: Katie Hanzlik
Katie.Hanzlik@sen.ca.gov
Press Secretary
Senator Robert M. Hertzberg
Capitol Building, Room 4038
(916) 651-4018

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