A broker trade association is appealing a new regulation that changed their minimum bond requirement from $10,000 to $75,000, which it says already has shut down 2,768 brokers not in compliance by Dec. 1 deadline.
On Dec. 3, the Association of Independent Property Brokers & Agents appealed the Federal Motor Carrier Safey Administration final rule in the U.S. Court of Appeals for the 11th Circuit.
It argues the FMCSA’s rulemaking violated the Administrative Procedure Act. The agency had issued the rule after Congress stipulated brokers must obtain the higher bond by Oct. 1 in last year’s surface transportation reauthorization. The rule allowed an enforcement grace period until Dec. 1, after which the FMCSA promised it would revoke authority of brokers who had not obtained the higher bond.
The association of small-and-mid-sized brokers stated that as of Dec. 5, the agency listed 21,565 active brokers, which it says is 13 percent fewer brokers than last month. Surety bond provider JW Bond Consultants puts puts that number higher. The Pennsylvania-based company estimated about 3,800 broker authorities have been revoked by Dec. 3.
Initially, the AIPBA had asked the court for a temporary stay of the rule, which a three-judge panel for the circuit denied Nov. 26. The agency had stated it did not have discretion regarding the amount because it had been set by Congress. It added federal law does not mandate a notice-and-comment period when agencies publish rules to comply with a statutory change and rulemaking procedure would be impractical or unnecessary.
The Transportation Intermediaries Association, the American Trucking Associations and the Owner-Operator Independent Drivers Association supported the increased bond requirement.