FMCSA Denies AIPBA's Request for Property Broker Bond Exemption in Wake of Nearly 10,000 Businesses Being Forced Out-of-Business; Two Federal Lawsuits Now Move Forward...

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The Association of Independent Property Brokers & Agents ("AIPBA") announced today that the Federal Motor Carrier Safety Administration ("FMCSA"), an agency of the United States Department of Transportation, has denied its application for a categorical exemption from the minimum $75,000 property broker and freight forwarder bond requirement that recently was raised from $10,000 and caused nearly 10,000 small surface transportation intermediary businesses to go out of business. AIPBA can now move forward with two lawsuits previously filed in Georgia (“Association of Independent Property Brokers and Agents, Inc. v. Foxx, No. 13-15238-D (Atlanta, GA 11th Cir.)” and Florida (“Association of Independent Property Brokers and Agents, Inc. v. Foxx et al, No. 5:15-cv-00038-JSM-PRL (M.D. FL.)".

AIPBA Membership "disappointed" in FMCSA yet "confident" in Federal judicial system.

We disagree with the long-awaited decision rendered and find it totally devoid of sensitivity toward the nearly 10,000 small business intermediaries, especially members of the minority brokerage community that were revoked...

The United States Department of Transportation's Federal Motor Carrier Safety Administration ("FMCSA") announced via in the "Federal Register" on March 30th, 2015 that it has denied the Association of Independent Property Brokers & Agents' ("AIPBA"), a freight broker trade group, August 2013 application for a categorical property broker and freight forwarder bond exemption (see: (http://aipba.vpweb.com/upload/AIPBA_Exemption_Letter.pdf).

The decision was opened for "public inspection" on March 30, 2015 online at:

https://www.federalregister.gov/articles/2015/03/31/2015-07353/exemption-applications-denials-association-of-independent-property-brokers-and-agents

Under Federal Law (49 USC 13906), a minimum $75,000 bond has been required of property brokers and freight forwarders in order to receive and maintain a federal business license since October 1, 2013.

AIPBA issued a statement in response to the FMCSA’s decision:

"The AIPBA is very disappointed in FMCSA, in this instance. We disagree with FMCSA's long-awaited decision on this application, and find it totally devoid of sensitivity toward the nearly 10,000 small business intermediaries, especially members of the minority brokerage community, that were revoked in the first two weeks of December of 2013 and the anti-competitive obstacles to entry currently in place due to a bond obviously set too high for over 40% of the property brokerage industry to handle," AIPBA President James Lamb said.

Lamb stated that whereas AIPBA offered that over 9,800 intermediaries (8,200 of which were brokers (http://www.overdriveonline.com/broker-group-continues-push-against-bond-increase-files-for-exemption-for-all-brokers/?utm_medium=single_article&utm_campaign=site_click&utm_source=in_story_related) were revoked in the first two weeks of December 2013 as a direct result of enforcement of a $75,000 minimum bond, FMCSA acknowledged in their decision that 8,962 intermediaries were, indeed, lost during the full month of December 2013, the difference representing a relatively small amount of intermediaries whose licenses were reinstated in the last two weeks of that month, and other new non-small business broker applicants sparked by the 2012 highway bill dubbed "Moving Ahead for Progress in the 21st Century Act of 2012 ("MAP-21")

Lamb noted that while FMCSA points in its decision to a small increase over the year that followed, Lamb believes it neglects to acknowledge that a significant part of that increase is due to the fact that MAP-21 reinforced the need for large carriers to obtain broker licenses when they arrange transportation (formerly asserted to be unregulated as a matter of “interlining”) when the carrier does not take possession of the property at least at some point in the shipment.

"The current broker census therefore cannot be fairly attributed to a return of these small business brokers that were utterly decimated in December 2013," Lamb said.

According to the AIPBA website (http://www.aipba.org), AIPBA has two lawsuits in motion; one previously filed in Georgia (“Association of Independent Property Brokers and Agents, Inc. v. Foxx, No. 13-15238-D (Atlanta, GA 11th Cir.);” and the other in Florida (“Association of Independent Property Brokers and Agents, Inc. v. Foxx et al, No. 5:15-cv-00038-JSM-PRL (M.D. FL.)" against the FMCSA over the broker bond issue, one of which, is now before the U.S Court of Appeals.

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James Lamb
Association of Independent Property Brokers and Agents
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