Profit Over People: The commercial bail industry perpetuates unjust cash bail systems and relies on egregious practices to protect its bottom line

Introduction and summary

From [HERE] On any given day in 2022, 658,000 people are incarcerated in jails across the country, more than 80 percent of whom are awaiting trial to determine if they will be convicted of a crime.1 Although courts have determined that most people can safely await their trial while remaining in their communities, the inability to afford the cost of cash bail prevents thousands of people from accessing pretrial release.

The pretrial process that is supposed to protect community safety and ensure access to justice has been corrupted by the corporate influence of the commercial bail industry. A small group of large insurance corporations oversees a web of private companies that make an estimated profit of $2.4 billion each year.2 For-profit bail companies get rich by foisting nonrefundable costs onto the very people who can least afford the cost of bail, most often people experiencing poverty and people of color. These costs are owed even if the charges are dropped or the person is found not guilty at trial.

The commercial bail industry actively defends cash bail systems that produce racially3 and economically unjust outcomes,4 high rates of pretrial incarceration,5 significant costs to taxpayers,6 and negative public safety consequences7 The commercial bail industry traps people who cannot afford cash bail premiums in a predatory cycle of debt and incarceration, in the same way that payday loan companies and other predatory lenders make a profit by taking advantage of people who need help affording the necessities of daily life.8 Moreover, commercial bail companies operate with little oversight or accountability, frequently engaging in abusive and unethical practices that jeopardize public trust and undermine the legal system’s ability to administer justice.

This report is presented in five sections. The first section provides context for the two-tiered systems—one for the rich, one for the poor—in which the commercial bail industry operates. The second section outlines the stakeholders in the commercial bail industry and describes their roles in the commercial bail process. The third section explores harmful practices many industry stakeholders engage in, to the detriment of their individual clients and the broader community. The fourth section highlights how legislation has expanded the use of commercial bail bonds while current regulatory frameworks fail to provide necessary accountability and oversight. Finally, the fifth section makes recommendations for various state-level reforms. It is crucial that policymakers implement solutions to rein in the commercial bail industry and protect clients from industry abuses.

Two-tiered cash bail systems reinforced by the commercial bail industry

The practice of assigning cash bail as a condition of an individual’s pretrial release has led to two-tiered systems of justice. People with money can return to their communities while they await trial, while those without money are forced to choose between remaining incarcerated—and facing the harms that accompany pretrial detention—and entering into a predatory contract with a commercial bail company to obtain release.

For people without the resources to pay a full bail amount, the only way to avoid pretrial incarceration in the vast majority of states without a state-run cash bail system is to hire a commercial bail bond company to pay on their behalf. These companies promote themselves as providing a public service, but in reality, they capitalize on unjust cash bail systems to extract their profit from underresourced individuals and families.

In exchange for a fee, called a premium, commercial bail agents enter into an agreement with the court that they will pay an individual’s full bail amount if the individual fails to appear in court.9 This transaction places the responsibility of ensuring individuals return to court on the commercial bail agent. The premium amount is typically from 10 percent to 15 percent of the total bail assignment.10 Unlike cash bail deposits made by those who can afford to pay them upfront, premiums collected by agents are nonrefundable. Premiums are not returned to the individual even in cases of false or illegal arrest, when charges are dropped, or when an individual is found not guilty.11 From 2011 to 2015 in Maryland, $75 million in nonrefundable premiums was paid by people whose cases did not result in a conviction.12

Today, the setting of cash bail is an arbitrary practice. Those who enforce a jurisdiction’s bail policies (bail setters) often rely on bail schedules—arbitrary lists of cash bail amount recommendations for different charges13—rather than conducting a meaningful assessment to determine the conditions that would best support a released individual, ensure their appearance in court, and protect public safety.14 Bail setters regularly assign unaffordable bail amounts without considering an individual’s ability to pay,15 even though most Americans lack the resources to cover many emergency expenses. This is due in large part to the reliance on commercial bail companies to cover the costs that individuals cannot afford to pay.

In 2017, 57 percent of Americans could not afford a $500 emergency expense without incurring debt.16 Because of the systemic inequities in criminalization and enforcement practices that target people from underinvested communities, people involved with the criminal legal system tend to have fewer financial resources than the U.S. population as a whole. In fact, in 2019, 80 percent of people involved with the criminal legal system were assessed as being legally “indigent,”17 meaning they were “unable to afford the necessities of life.”18 Still, the median bail amount for felonies in 2009 was $10,000,19 meaning a person arrested on a felony charge would have to pay $1,000 to secure their release. The commercial bail industry capitalizes on these economic vulnerabilities by offering to pay the cost of an individual’s release and extracting payment regardless of the outcome of the case.

Racially disparate bail assignment practices also make people of color more likely to need a commercial bail bond to afford release.23 From 2011 to 2015, Black people in Maryland paid nearly 2 1/2 times more in premium payments than all other races combined.24 In practice, cash bail systems extract wealth from the same Black communities that have faced generations of intentional disinvestment.

Furthermore, recent reforms have demonstrated that cash bail is unnecessary—and often unhelpful—to protect community safety and ensure appearance in court. For example, many jurisdictions have implemented bail reform without any significant increase in recidivism rates.25 After New Jersey implemented bail reform in 2017, the state saw decreases in the rate of all categories of crime. Violent crime rates decreased 18 percent immediately following reform.26 In 2018, Philadelphia ended the practice of prosecutors requesting cash bail for many misdemeanors and nonviolent felonies without seeing any increase in recidivism.27 In Harris County, Texas, where misdemeanor bail reform was initiated under a consent decree in 2019, rearrest rates have remained stable.28 Despite widespread disinformation surrounding bail reform in New York City, a recent report by the city’s comptroller revealed that pretrial rearrest rates were nearly identical before and after bail reform was implemented.29

Current bail setting and commercial bail practices ignore the fact that most people who are arrested are safe to be in the community. The vast majority of people arrested in the United States are arrested on nonviolent charges. In 2016, less than 5 percent of arrests were for charges of violent crime.30 In 2020, the rates of property crime were approximately 2,100 per 100,000 people, while violent crime rates were 379 per 100,000 people.31 Cash bail systems’ reliance on arbitrary bail schedules incarcerates people based on their access to money, draining taxpayer resources even when there is little risk to public safety. Systems that rely on cash bail produce high rates of unnecessary pretrial incarceration,32 which is known to increase recidivism.33 One study found that assigning cash bail was associated with a 6 percent to 9 percent increase in the rate of recidivism.34 [MORE]