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Sunday, October 25, 2009

Ind. Courts - "Bondsmen bailing out of the business: Recession, Marion County judges' new policy erode pool of customers"

Here is a story from Dan McFeely of the Indianapolis Star from Tuesday, Oct. 20th that the ILB nearly missed:

Bail bond agent Kate Sweeney used to thrive when the economy tanked. Usually when jobs disappear, crime goes up, and so does her business.

But these days, too many clients are asking for bail without the required collateral, such as a home or a car, diminishing bail bondsmen's customer base. And not helping matters is a new policy by Marion County judges setting less expensive cash bonds for minor offenses.

"The slow death of the bail bond industry is forcing me to make a change," said Sweeney, who has decided to get out of the business, Indiana Bail Bonds, which she runs with her father and a brother.

Bail bondsmen, or professional bail agents, are independent contractors backed by surety companies who post bonds for defendants, allowing them to get out of jail while awaiting trial.

"In the past, when things went bad, bail bonds were always OK because people still got arrested," said Sweeney, 38. "But with this latest crash, things sort of tanked."

She is not alone. Nationally, bail agents are hurting for business, and statewide, dozens of agents are bailing out of the field. * * *

Indiana has 383 licensed bail and recovery agents. About a third have until Oct. 31 to renew their licenses, according to the Indiana Department of Insurance, but already 40 have sent notice that they will not be renewing.

Bail bondsmen thrive as long as a steady stream of criminal defendants comes asking for bond insurance, which typically costs the defendants 10 percent of the bond amount and some sort of collateral security.

Johnson County, like many counties in Indiana, still requires surety bonds. But judges in Marion County are allowing cash bonds paid directly to the court -- 10 percent of the full bond with no collateral necessary, and nearly all of it refundable as long as the defendant shows up for court. * * *

Since the judges reworked the guidelines in the spring, the cash bond numbers are starting to rise, from 963 posted in March to 1,136 in May. Surety bonds decreased over the same period from 5,501 to 5,274.

"The increase in the number of those bonds has had a drastic effect on our bond business," said Leslie Sebring, a 44-year veteran owner of AAA Bailbonds.

He plans to survive, however, with his other business, United Surety Agents on the Northside, an umbrella insurer for more than 230 bail agents in 26 other states. "We are writing fewer bonds," he added, "but they are higher bonds."

Judges defend the move toward cash bonds, saying it's hard for unemployed criminal defendants to afford conventional surety bonds.

"We wanted to make sure we are not setting our bonds so high that we are overcrowding our jail," said Marion Superior Court Judge Robert Altice Jr. "Some people can't even afford a thousand-dollar bond."

Further, Altice said defendants can use their cash bond refunds to hire a private attorney -- who has the right to place a lien on the bond -- rather than rely on a public defender. "Anything we can do to lessen the workload for our public defenders is a good thing," Altice said.

The cash bonds are only for minor misdemeanor offenses. Major misdemeanors and all felonies -- crimes that carry the potential for stiffer fines and incarceration -- still command much higher bond amounts and require insurance by a bondsman.

Posted by Marcia Oddi on October 25, 2009 12:11 PM
Posted to Indiana Courts