The Association of Independent Property Brokers & Agents lost a challenge on Tuesday before the U.S. Court of Appeals for the 11th Circuit to delay enforcement of the Federal Motor Carrier Safety Administration’s new broker bond requirement that takes full effect on Dec. 1.
by Staff
November 26, 2013
1 min to read
The Association of Independent Property Brokers & Agents lost a challenge on Tuesday before the U.S. Court of Appeals for the 11th Circuit to delay enforcement of the Federal Motor Carrier Safety Administration’s new broker bond requirement that takes full effect on Dec. 1.
The “Moving Ahead for Progress in the 21st Century” Act makes sweeping changes to the laws governing transportation in the United States. Section 32918 requires FMCSA to raise the bond requirement for freight brokers from the traditional $10,000 amount to at least $75,000. On Oct 1, the amount increased.
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AIPBA’s action claimed that FMCSA’s manner of enforcing the new bond amount was done improperly, and it should have to go through proper rulemaking and fact-finding before enforcing the new bond amount.
Under the new rule, small business owners must put down $75,000 in cash collateral, the same as international conglomerates, or otherwise secure credit-based bonding, or they will lose their operating licenses starting Dec 1.
AIPBA said many of these brokers are family businesses who will no longer be able to compete with large companies that can easily secure the $75,000 bond to stay in business.
Supporters of increasing the broker bond amount say the hike is needed to keep trucking operations, including owner operators, from being victims of “deadbeat” brokerage operations that fail to pay their bills.
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