The Predatory For-Profit Bail Industry

What are bail bonds and who provides them?

The United States is one of only two countries in the world with a for-profit bail system (the Philippines is the other). There are two primary forms of bail: bail bonds that are paid to private companies, and cash bail that is paid to the courts themselves.


The for-profit bail industry sustains itself by preying on people, primarily from communities of color and other marginalized populations, during an already intense, scary, and stressful time in their lives. The predatory lending practices the industry employs perpetuate cycles of poverty by forcing individuals to pay excessive and arbitrary fees. This leads to the accused and their families taking on additional debt while risking the loss of their home, car, or other collateral if the terms of the bail bond contract are not upheld.

Meanwhile, these same for-profit bail companies do exceptionally well financially, taking in an estimated $2 billion in profits in 2019.


In addition to the financial consequences, bail bond companies infringe on individuals’ rights in other ways. People who sign contracts with bail bond agents may waive many of their rights with regard to unreasonable search and seizure. This means that if they do miss a court appearance, the bail bond company may have the right to enter their home — often by employing armed bounty hunters — or review their phone, bank, or medical records.  Making matters worse, bail bond companies can do all of that without getting a warrant. In a very literal sense, that means the companies can do things that the government can’t — and they face little to no regulation or oversight.

What impact does this have on individuals who are bailed out and their families?

As we discuss in our cash bail explainer, people who have been arrested in Minnesota are brought before a judge, who then decides the amount of bail they’ll have to pay to be released until their trial begins. They have to stay in jail if they can’t pay, putting many at risk of losing their jobs, being separated from family or friends who depend on them, or having their lives otherwise disrupted before they are even given a trial.

Faced with that kind of unexpected financial emergency, many individuals turn to private bail bond agents, who will pay the money on their behalf for a non-refundable fee that amounts to 10% of the bail. A person whose bail is set at $1,000, for instance, would need to pay a private bail bond agent $100 — and they wouldn’t get the money back even if they show up for every court appearance. That means the fees function as a sales tax of sorts that hits the economically disadvantaged especially hard.  

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For those unable to find the money upfront, bail bonds agents will create payment plans, requiring money to be paid in regular installments that may continue long after the original legal issue is resolved. These agents may also require collateral — like property, vehicles, jewelry, electronics, or other valuable items — from individuals and their families, putting those individuals in a precarious position of risking their own financial security to help ensure the release of their loved ones from confinement before their trials even take place. These types of contracts often include provisions forcing family members to pay additional fees or agree to other onerous conditions.

How does MFF differ from the for-profit bail industry?

When the Minnesota Freedom Fund pays an individual’s bail, we do not ask them or their friends and family to pay us a fee and we do not ask for any collateral. While bail bond agents use predatory practices to make a profit, we operate as a non-profit, supporting those who request bail without forcing them or their loved ones to risk their own financial security to do so.


We also never ask anyone to give up their rights.
When we pay an individual’s bail we do so because we believe that no one should be forced to remain in a cage before they even begin their trial, not because we’re trying to make a profit off of someone’s misfortune. And we don’t believe they should give up their right to privacy solely because they need help.

Who are the key players in the for-profit bail industry?

When an individual seeks out a bail bond agent, they can do a quick internet search and come up with dozens of bail bond companies promising to provide the money. However, for-profit bail is big business, and these small companies don’t have the cash on hand to cover the amount they pay out.

As a result, many of these bail bond companies are underwritten by massive insurance corporations, many of which aren’t even based in the United States. According to a 2017 ACLU report, the top nine bail insurers cover the vast majority of the estimated $14 billion in bonds posted by the for-profit bail industry each year.


As the for-profit bail industry has grown in size and profitability, so have the industry’s efforts to build its political muscle and beat back attempts at regulation and greater transparency. Through associations like the American Bail Coalition, the industry has poured millions of dollars into political contributions, lobbying efforts and other attempts to pass laws favorable to the industry while blocking legislation or referendums designed to limit its abuses.

In California, for instance, the industry spent an estimated $11 million to overturn a ban on cash bail.

What about regulation and oversight?

There is no national standard for regulating the for-profit bail industry. In Minnesota, bail bond agents must be licensed by the Department of Commerce, but there are no written or verbal tests or certifications.

In 2016, the department spent three years investigating allegations that Minnesota bail bond agents failed  to comply with relevant Minnesota laws and court rules. The probe ended with the department entering into consent orders with all 21 insurance companies operating in Minnesota that requires minimum standards of pricing, record keeping, methods of holding collateral, and auditing.

In announcing this agreement, Minnesota Commerce Commissioner Mike Rothman said it “was necessary because too many people in the bail bond industry thought they were in the Wild West and the rules didn’t apply to them.”


Still, the lack of consistent oversight and regulatory gaps at both the state and local level enable the industry to continue engaging in misconduct — and pocketing lots of money along the way — while taking advantage of individuals in their hour of most desperate need. It’s a fundamentally corrupt industry that needs to be abolished. Until that time comes, Minnesota Freedom Fund remains committed to protecting Minnesota's communities with collateral-free bail support, never asking an individual to give up rights that are fundamentally theirs to begin with.


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