The economy in the United States has almost destroyed the local governments therein. All the major cities in California are on the verge or in financial crisis, “the entire Golden State is actually teetering on the edge of bankruptcy” (1). The economic woes effects the bail bonds industry directly and indirectly. Los Angeles County has created something called the Implementation Plan. Simply, this means that a large portion of the inmates from the State Prisons will be moved to the local jails because the State Funded Prisons can no longer afford to keep the inmates. What does this do to the bail bonds industry?
Well, as we all know, the bail bonds process involves processing arrestee’s through the local jails. The defendants are remanded to jail either until their court dates, they are bailed out, or they are let out on their own recognizance (OR). Its the latter that has been effecting the overall bail bonds business. Since the influx of state prisoners takes up space in the local jails, more and more arrestee’s are OR’d, because there just isn’t any room any more in the local jails to hold the newly arrested individuals.
The Implementation Plan was decided by the California Legislature who passed the Public Safety Realignment Act. This transfers responsibility for supervising specific low-level inmates from the Cal Dept of Corrections to the local counties (local jails). The Plan projects that approximately 9,000 offenders (inmates) will be released, or sent, to Los Angeles County over one year. More incredibly, by year two, almost 15,000 inmates will be tranferred. The local counties will be taking on 24,000 more inmates within the next two years.
In addition to the 24,000 new inmates, the counties will no longer be able to send certain inmates charged with felonies to the State prisons. The same protocol used to qualify which inmates get moved to the local counties, also applies to what convicted felons can be sent to State prison. So, the felons that the local counties used to be able to send to State Prison and free up some space in their local jails, like the Los Angeles Jail, will no longer be transferred.
On top of the Plan effecting the number of defendants who would have bailed out of jail, the economy effects had done its work also. No longer is there a large amount of discretionary income around that people are willing to part with for the fees involved in the bail bonds process. To work with a bail bonds agent, the fee is 10% of the total bail. This fee is regulated by the California Department of Insurance and is the standard fee for California. Say someone’s bail is $20,000, the fee is $2,000. Less and less people are willing to part with $2,000 and are choosing to leave the defendants in jail for the chance of getting OR’d. They also choose to leave them in jail to wait for the court date. Appearing in front of the judge also provides a good possibility of getting OR’d.
Is the End Near for the Bail Bonds Industry? No. But the competition is getting more and more fierce daily because there is less and less bail being offered by the local jails. The more fierce the competition gets, the dirtier the industry gets, hence the perception that the bail bonds industry has been getting in the last few years. The prediction for the next few years is that 50% of the current bail bonds companies in business will no longer exist. So, the end is near, but just for some.
(1) ref Article (http://www.wealthwire.com/news/economy/2045)