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Comment to the Department of Financial Protection and Innovation on Reining in Abusive Practices in the Bail Bonds Industry

April 2, 2021
Consumer Finance
Comment Letter

The private bail bonds industry is woefully underregulated. Unlawful consumer credit arrangements and debt–collection practices abound, yet no government body is charged with addressing these aspects of bail bonds contracts. DFPI has the authority and the expertise to provide much-needed regulation in this industry and doing so would align with its mission. For the good of bail bonds consumers too often fleeced by unlawful financial products during a particularly stressful moment in their lives, we urge DFPI to recognize and use its authority under the CCFPL, the DCLA, and Cal. Fin. Code section 326 to address abuses in the bail bonds industry.

Our organizations have wide-ranging experience with consumer protection violations in the bail bonds industry. Some of us serve consumers directly, whereas others research and promote policies to address abuses. Through the stories of our clients and our research into industry practices, our experience has shown that bail bonds companies frequently flout consumer protection laws and rarely face consequences for doing so. Ultimately, we believe that the for-profit bail industry fundamentally fails to serve consumers or the public. We believe that California can and should do without it. But as long as consumers must rely on these companies – and as long as many consumers remain indebted to them – we need proactive and expert enforcement of consumer protection laws governing the industry.

There are hundreds of thousands of bail bonds contracts created each year. Because of the high cost of bail bonds premiums, many of these contracts involve consumer financial transactions. No government body currently regulates this aspect of the bail industry and private enforcement cannot sufficiently address the harm caused to consumers, often the families of those accused of a crime. DFPI is well-suited to address abusive financial practices in this industry and has the legal authority to do so. For the benefit of California consumers, we urge the Department to recognize its authority to utilize the CCFPL, the DCLA, and Dodd-Frank to address unfair, deceptive and abusive practices by bail bonds companies.

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