New Orleans bail bond companies overcharging defendants, according to SPLC complaint

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PHOTO BY PHIL ROEDER/CREATIVE COMMONS
  • PHOTO BY PHIL ROEDER/CREATIVE COMMONS

New Orleans bail bond companies have charged defendants illegally high bond rates to get out of jail, according to an investigation by the Southern Poverty Law Center (SPLC), which revealed roughly $5 million in excessive fees was collected from nearly 50,000 people over 12 years.

The SPLC's announcement was released the same day Orleans Parish Criminal Clerk of Court Arthur Morrell said he plans to cut the hours that his office will process bail bonds, meaning people locked up after office hours will likely remain in jail despite having met the bond set by a judge.

The Clerk of Court office will now be open from 8 a.m. to 11 p.m. Monday through Friday and from 10 a.m. to 5 p.m. Saturday and Sunday. It's the second time the office has changed hours since 2014, when the office was open 24 hours.

According to The New Orleans Advocate, Morrell says his office is not sufficiently funded to staff after-hours bail processing.

City Hall disagrees. In a statement to Gambit, Mayor Mitch Landrieu's Communications Director Tyronne Walker said "the decision to make changes that will cause potentially innocent people to stay in jail longer than they should is troubling. If the Clerk believes his office deserves more money, the responsible action is to make that case before the City Council during the Budget Process just like every other department."

The New Orleans City Council's budget hearings for 2018 began this week and will extend into the next several weeks. Morrell's office is scheduled to appear Sept. 19.

But unless bond companies change the bond rates cited by the SPLC, people who are jailed in New Orleans will continue to potentially face illegally high bond fees — and if Morrell keeps his shorter office hours, they'll also be staying in jail longer.

On Sept. 7, the SPLC delivered a complaint to the Louisiana Department of Insurance that lists 21 bail bonds companies and their insurance underwriters, though the complaint says the list is not exhaustive. "The SPLC believes most bail companies and their insurers operating in New Orleans are charging premiums in excess of what is permitted under law," the complaint says.

The complaint also demands the department fine the companies and suspend or revoke their operating licenses if they're unwilling to refund the premiums.

Defendants pay the bond premiums rather than the full cost of the bond set by a judge. State law set bond premium rates at 12 percent of the bond, or $120 (whichever is greater). The SPLC asserts bond companies in New Orleans charge 13 percent.

Companies keep 10 percent of the bond's face value as profit while the remaining three percent is shared among courts, district attorneys offices and indigent offender programs. But, as The New Orleans Advocate reported, those fees jumped from 2 percent to 3 percent in 2005 — with that extra 1 percent earmarked for Orleans Parish Criminal Court.

The SPLC alleges that 1 percent hike has been passed on to low-income defendants.

“These companies have flouted state law and cheated tens of thousands of poor people and their families out of millions of dollars,” SPLC staff attorney Micah West said in a statement. “Such blatant financial abuse is particularly egregious when it’s being carried out as part of the justice system and under the nose of the courts.”

The complaint is the latest in an ongoing effort among civil rights groups revealing the costs of the city's criminal justice system and its disproportionate impact among lower-income people of color.

In January, the Vera Institute of Justice found a wildly disproportionate bail system that significantly affects low-income Black New Orleanians and costs taxpayers millions of dollars. On any given day in 2015, 558 people were jailed because they couldn't make bail or pay fines and fees. In total, the city collected $4.5 million from those fees — but it cost the city $6.4 million to jail people for not paying them.

Nearly one-quarter of the city lives below the poverty line, the report notes, with a median income among black residents of $26,819, 57 percent lower than the median income among white residents.

"Collecting millions of dollars annually from individuals and families involved in the criminal justice system represents a siphoning of resources from historically under-resourced black communities," the report said. "The enormous cost to people to extract a relative penny raises serious questions about whether charging users is worth it, let alone appropriate given that it leads to jailing those who can't pay."

In January, the City Council unanimously passed an ordinance allowing people charged with minor offenses to be released from jail without having to pay bail and given a date to return to court.


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