BILL NUMBER: S6521

SPONSOR: BAILEY
 
TITLE OF BILL:  An act to amend the general business law, in relation
to immigration bonds and disclosures for providers of immigrant assist-
ant services

 
PURPOSE:

The purpose of this bill is to increase transparency and fairness in the
immigration bond industry.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends the general business law by adding a new section
460-d-1, which (a) restricts the amount that can be charged to an indi-
vidual who must wear an ankle monitor or homing device as a condition of
an immigration or other bail bond, and (b) prohibits a fee for the
removal and subsequent replacement of the device in case of a medical
necessity or reasonable fear of one.

              

Section 2 amends subdivision 3 of section 460-b of the general business
law by adding a new paragraph (m) requiring written contracts for the
provision of an immigration bond to contain a statement explaining the
right to a court hearing to lower the bond amount as well as the poten-
tial outcomes of such a hearing

Section 3 amends section 460-d of the general business law by adding a
new subdivision 16 requiring providers to make a written disclosure
about the source of payment to a lawyer or legal services provider that
is partly-owned by the provider or an affiliated entity.  Any referral
to a lawyer or legal services provider must include a written statement
explaining that hiring the referral is voluntary and the contact infor-
mation for the New Americans hotline to obtain free legal services.

Section 4 provides the effective date.

 
EXISTING LAW:  The law currently does not regulate the use of ankle
monitors.

 
JUSTIFICATION:

On average, more than 8,000 immigrants are detained in New York State.
They are housed in as many as 76 different detention facilities across
the state. In New York, the median dollar amount of bonds granted to
individuals in immigration cases is approximately $7,500, which is one
of the highest rates in the country. It is 50 percent higher than the
median bail set in felony criminal cases in New York City, and nearly
seven times more than in non-felony cases.

Unlike defendants in criminal court, immigrants in detention must either
put up their entire bond in cash, or turn to "surety bonds," which
require the detained immigrant to pay a surety or bond company a non-re-
fundable percentage of the bond amount (usually 15-20%). Many immigrants
who cannot afford a cash bond turn to immigration bond companies for a
surety bond, driving rapid growth in the immigration bond sector in
recent years.


Many states, including New York, have reformed cash bail and regulated
the bail bond sector. However, bail bond companies - who historically
have not issued immigration bonds - are turning to detained immigrants
as a new market to make up for lost revenue.

One of the most serious concerns about the for-profit immigration bond
sector is excessive fees. Clients of for-profit immigration bond compa-
nies must pay thousands of dollars up front, and pay hundreds of dollars
more in fees every month thereafter. Over time, these payments can
exceed the cost of the initial bond, and, unlike cash bonds, none of
these payments are refundable a fact that many clients of for-profit
immigration bond companies do not understand until it is too late.

One of the largest for-profit immigration bond companies, Libre by
Nexus, charges bailees approximately $420 each month as "operating fees"
on the electronic ankle monitors the entity requires them to wear. The
cost of operating these devices has been estimated to be as much as $120
per month, which means that companies like Libre by Nexus are making
mandatory rent paid by detained immigrants on their own ankle shackles
into a profit center.

Because the average wait time in New York State immigration courts is
over 2 years, detained immigrants who contract with Libre by Nexus may
end up paying over $10,000 in fees for ankle shackle monitoring alone.
Again, these fees are not refundable, even if the immigrant prevails in
court.

Clients of for-profit immigration bond companies have reported that they
did not fully understand the contracts they entered into. They have
further claimed that contract documents were not translated into their
language, and that they were led to believe the fees they paid to immi-
gration bond companies were refundable.

Clients have also reported that they were falsely informed they could be
deported or returned to detention if they failed to make payments to
immigration bond companies.

Some clients of for-profit immigration bond companies have reported that
(a) they experienced serious medical conditions related to their ankle
monitors, (b) they were told they had to keep the ankle shackle on even
during a pregnancy, and (c) they were told they would have to pay $4,000
in fees (several times the actual cost of the device) if the device were
lost or damaged, including being cut off by medical personnel.

Libre by Nexus refers immigration bond clients to Nexus Caridades, a
not-for-profit affiliated with the company that provides free legal
representation in immigration proceedings. While the company touts this
arrangement as purely charitable, it creates a significant risk of legal
conflict of interest in which immigration attorneys funded by Libre may
have an incentive to act in the best interests of the company rather
than their clients.

Finally, government oversight agencies have expressed growing concern
over abusive and fraudulent practices by for-profit immigration bond
companies. The attorneys-general of New York, Virginia, and Washington
State launched investigations into Libre by Nexus, as did the federal
Consumer Financial Protection Bureau, before that investigation was shut
down by the current administration.
The industry has aggressively resisted oversight and regulation. Libre
by Nexus' refusal to turn over documents on their contracting practices
prompted the New York Attorney General's Office to file a motion demand-
ing that the CEO of Libre by Nexus be jailed for criminal contempt.

This modest legislation would bring badly needed oversight to a sector
that is rife with abuses by reigning in inflated costs charged by
providers and requiring more transparency in contracts between providers
and bailees.

 
FISCAL IMPACT ON THE STATE:

None.

 
PRIOR LEGISLATIVE HISTORY:

New Bill.

 
EFFECTIVE DATE:
60 days after becoming law.