More on broker bond increase, highway bill
“Fraud exists in both the brokerage and the motor carrier industries, and increasing the bond will have no effect on fraudulent operators. Those advocating raising the bond assume that a company’s intent on fraudulent activity will nonetheless meet the legal requirement of getting a higher bond. A company starting a new brokerage every Monday, for example, is unlikely to get any bond, let alone one worth $500,000.”
As Voltmann rightfully said in 2004 — before he sold out the little brokers — it is the illegal brokers who are the real problem. As for Jim Sanders, he is right on. The $100,000 bond would put up to 17,000 of the existing 20,000 brokers out of business, including most AIPBA members.
It is now the 11th Hour and a Highway Bill is expected this week. We are hoping lobbyists on our side will get the amount changed from $100,000 to $25,000, which would fairly adjust the current $10,000 bond last set in the late 1970s for inflation. However, if the $100,000 bond is passed the remaining 3,000 big brokers will be able to offer lower freight rates to carriers and owner-operators. TIA and the big brokers will not address the fact that the bonding companies will require $100,000 cash collateral because of the tenfold increase in their risk exposure. They mislead people into thinking this is just about coming up with a $5,000 annual bond premium.
This measure has failed twice before as stand-alone legislation in both chambers. The fact is that supporters of the bigger bond had to sneak this language into the massive highway bill as a footnote to the Reid amendment in order to get it through the Senate. This $100,000 bond measure is nothing more than an anti-competitive power play for the big brokers speciously being implemented under the guise of “fighting fraud.”
Lastly, TIA has the nerve to collect $660 a year from small brokers, which they represent will be used to defend and promote their interests. In actuality, they spend that money on lobbyists to enact legislation that will eliminate small brokers. If Mr. Voltmann is looking for fraud, he might start by looking in the TIA Boardroom.
Association of Independent Property Brokers and Agents