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Small Brokers Sue to Stop $75,000 Bond Requirement

July 18, 2013

By Oliver Patton

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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.”

Comments

  1. 1. John Wink [ July 18, 2013 @ 03:37PM ]

    YEA!!!! I support this lawsuit 100%

  2. 2. don [ July 19, 2013 @ 05:45AM ]

    Hopefully justice and the American Dream will prevail and small business can continue to pursue their rights to free enterprise

  3. 3. nick [ July 19, 2013 @ 11:29AM ]

    Great! that is a blatant attempt by the bigs running us small, reputable companies out of the industry

  4. 4. Dennis [ July 19, 2013 @ 11:35AM ]

    They weren't crying justice when their members were running off with the money they promised drivers for hauling their loads. The whole reason for this bond is to make sure the drivers get paid for the work they have done. If they can't afford a $75,000 bond then they can't afford to be in the business and should go find something else to do.

  5. 5. O D Plenty [ July 19, 2013 @ 11:40AM ]

    Been screwed for far too long by these $10000.00 So Called Brokers(Shiesters). It's time they are gone 75000.00 Bond not near enough. Most that go out of business owe truckers way more than that. You Know It Too!! Been there- got the SHAFT.

  6. 6. Alex Hdez [ July 19, 2013 @ 08:51PM ]

    If you can't get 75K to run your bussines,but in the other hand most"Big"broker companies (TQL,Ch Rob)even deposit up to 250K where's the fairness of the small enterprise,there's a lot good small mom and pop brokers that do a much better job than the big guys,in what direccion are we going??

  7. 7. JOHN KENNEDY [ July 20, 2013 @ 08:36AM ]

    1000 % IN SUPPORT. A LOT OF THESE BROKERS ARE TAKING MORE THAN 15 TO 20 % IF YOU OWE 20 TRUCKERS $500. THEN THAT'S ALL IN, ANY MORE THAN THAT IT GETS DIVIDED ON ALL THE TRUCKS NOT PAYED. THEY SHOULD HAVE RAISED IT A LONG TIME AGO WITH JUST THE PRICE OF FUEL

  8. 8. angela williams [ July 23, 2013 @ 08:49PM ]

    all I have to say is I am a reputable broker and have been for years
    I have wonderful relationships with my drivers and I have always paid fair and paid on time. I have no problem with weeding out crooks but they should have grandfathered those of us that have been responsible and have worked hard for years making a name for ourselves...Congress is bought and they certainly did sell us out. If your considered about bad brokers that you refer to as shiesters then you should be really worried now because ch robinson is set to benefit from this legislation and they will continue to make sure that trucking companies have no fair advantage in the market.

  9. 9. Larry [ July 26, 2013 @ 06:35AM ]

    Lets support the groups that work for the small guy get rid of crooks and dont support crooks. Especially big crooks. And take this industry back also dont vote foe sellouts im just sick of big business that have screwed up our industry so bad hey guys lets come together put our resources together and fight them

  10. 10. Justin [ July 26, 2013 @ 11:27PM ]

    I believe there should be a change in the bond requirements, but I do not think it needs to be a one size fits all.
    I suggest a tier system.
    Start up brokers and brokers who only run $10,000 a month require a $10k bond.
    $10k to 25K monthly a 25k bond
    25K to to 50K a 50k Bond.
    and so forth.

    Make it to where brokers are required to submit revenue reports every six months and bond requirements can be increased as needed.

    people applying for new broker status should have to report to a state office for finger printing, that would take out people who are in it for wrong doing.

  11. 11. Just saying [ October 15, 2013 @ 10:51AM ]

    Don't understand the need of bonds. Every business I have ever dealt with have a credit history. If I see a customer that I don't want to deal with I don't deal with them.Every supplier (Carrier) has the right to deny credit if they want to. What other industry has a guarantee payment program. If you don't like brokers then don't deal with them. I have a list of carriers that I do not use and some have cost me to lose a customer because of failed service. Can I ask for a bond on that.

  12. 12. shiri [ November 01, 2013 @ 10:45AM ]

    Looking to be a rep anyone interested

  13. 13. Greg Williamson [ November 13, 2013 @ 06:40AM ]

    The Association of Independent Property Brokers & Agents has only known about the bond increase since last year but waits until July 2013 to file a lawsuit?

 

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