Small Brokers Sue to Stop $75,000 Bond Requirement
A group representing small property brokers has sued the Federal Motor Carrier Safety Administration to stop the new $75,000 bond requirement scheduled to go into effect Oct. 1, saying large trade groups are trying to eliminate small broker competition.
A group representing small property brokers has sued the Federal Motor Carrier Safety Administration to stop the new $75,000 bond requirement.
The Association of Independent Property Brokers & Agents has been working against the requirement since it was signed into law as a provision of last year’s highway bill.
“Today we made good on our promise to AIPBA members and supporters to follow through and legally challenge the anti-competitive $75,000 broker bond,” said association president James Lamb in a statement posted Wednesday.
The group is seeking an injunction to block the new bond before it goes into effect Oct. 1.
The group believes the bond “is a matter of collusion by other trade groups” to eliminate small brokers from the market.
The groups behind the bond provision in the highway bill include the Transportation Intermediaries Association, the Owner-Operator Independent Drivers Association and American Trucking Associations.
Lamb says the bond puts an unfair burden on small brokers.
In an interview last year he acknowledged that the legislation was designed to take on the problem of fly-by-night brokers who walk away from their obligations, but he downplayed the issue.
“From time to time there is a problem with brokers not meeting their responsibilities,” he said.
The $75,000 bond (up from the former $10,000 requirement) represents a compromise between TIA and OOIDA.
OOIDA held that the $10,000 bond was too low and in 2004 proposed that the Federal Motor Carrier Safety Administration raise it to as much as $500,000.
TIA was on the opposite side and eventually the groups decided to find a compromise, according to TIA President Robert Voltmann.
The $75,000 bond is the result of those discussions, Voltmann said.
Lamb said in his statement that his group is “seeking justice through the federal court system for the various small business players in the trucking industry that would otherwise be adversely affected.”
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