SFAA Opposes ICE’s Implementation of Treasury Department Standards to Decline Surety Bonds ...
Thursday, August 9, 2018
SFAA Opposes ICE’s Implementation of Treasury Department Standards to Decline Surety Bonds and Delist Sureties
Current U.S. Department of Treasury regulations allow any federal agency to develop a regulatory process for declining a surety’s bond and to petition the Treasury to delist the surety.
ICE has proposed rules to establish procedures for declining new immigration bonds from a Treasury-certified surety company under four circumstances: the surety has ten or more past due invoices that have not been paid within 30 days of its issuance; the surety’s cumulative debt is $50,000 or more on past due invoices; or the surety has a breach rate of 35% or greater during any federal fiscal year.
SFAA worked with its members to submit comments to ICE given the significance of this issue to the surety industry. SFAA warned that ICE’s 30-day limit on the surety to investigate an alleged breach may negatively impact the availability of immigration bonds. This unreasonably limits the surety’s discovery and turns the bond into a demand instrument, for which sureties may tighten their underwriting requirement. This in turn will affect the ability of aliens to be released prior to a court hearing.
Under current law, the Treasury can delist a surety only if the surety has failed to pay a final judgment. The ICE proposal would allow the agency to refuse to accept new bonds from a surety for non-payment of an “administratively final bond obligation,” which is far less than a final judgment. Treasury cannot give other agencies discretion to act beyond the authority Congress gave it. Sureties would be deprived of due process in seeking review of an ICE determination of a breach. Under the proposed rules ICE intends to issue an invoice once the administrative review process is exhausted. The ICE rule limits the surety’s appeal to the ICE administrative process as the ICE invoices would become overdue while the surety exercises its right to judicial review. SFAA also believes that the ICE standards for declining new bonds from a surety are arbitrary.
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