“Predatory Payday Loans”

Bail assistance can be a critical intervention after an arrest, helping people evade the long-lasting impacts of incarceration. Even a short stint in jail can lead to loss of housing or employment, destabilizing a person’s life significantly even before they are convicted of a crime. Bail is also often set inequitably; studies show that black defendants are given higher bail amounts by judges than white defendants.

Many bail companies, then, end up preying on poor people charged with crimes and their families. One nationwide survey found that more than half of the women researchers interviewed who had paid a bail agent to bail a loved one out of jail had also faced housing insecurity themselves.

The commercial bail industry’s primary trade group is the American Bail Coalition, which was founded in the early 1990s to defend the use of bail bonds. At the time, pretrial services programs — which allowed people to get out of jail without paying bail and instead opt for community supervision as their case progressed — were gaining in popularity in some states. The coalition saw this development as a threat.

The American Bail Coalition’s members are not individual bail agents, the bounty hunters that people pay to post bail. They represent the insurance companies that underwrite bail bonds — loans that are together worth billions of dollars. Some of these companies, as the American Civil Liberties Union found in a 2017 report, are in turn owned by multinational corporations like Tokio Marine Holdings, a Japanese insurance group that manages more than $40 billion in investments.

The commercial bail industry, White said, “relies on people being detained pretrial to make its money,” calling bail bonds a kind of “predatory payday loan.”

In theory, bail is a way of guaranteeing that a person charged with a crime will show up in court. In jurisdictions with cash bail systems, after an arrest, judges set bail for defendants determined not to be a flight risk. If bail is set at $2,000, the defendant could pay the $2,000 upfront, and, if they continue to appear at court, eventually get the money back.

But if a person can’t come up with the $2,000, they will be forced to sign a contract with a bail agent to get out of jail — paying a nonrefundable fee, usually around 10 percent of the total. In exchange, the bail agent pays the full bail amount to the court, working with surety companies to underwrite the loan.

Working with bail bondsmen can require signing predatory contracts, paying additional processing fees, and putting up collateral — like a car — in exchange for the bond.

When states abolish cash bail, as Illinois did in 2023, it puts bail bondsmen and the insurers that back them out of business. As a result, the American Bail Coalition has increasingly focused on beating back bail reforms. The group has spent hundreds of thousands of dollars lobbying federally and in different states. The insurers themselves have spent millions, as one Reuters investigation found in 2021.

“I think that some of these attempts are motivated by the fear that commercial bail agents are facing an existential risk as the movement for bail reform continues to grow,” said Jeremy Cherson, the director of communications at the Bail Project, a bail fund that operates around the country.

As charitable bail funds have expanded across the country, allowing people to get out of jail without the help of the commercial bail industry, the American Bail Coalition has increasingly targeted the funds. As a report by the watchdog group Center for Media and Democracy found in March, the lobbying group published model policy on its website recommending lawmakers regulate bail funds for the first time in 2020. It has continued to push such policy in its publications and lobbying efforts.

To justify regulation, the American Bail Coalition argues that bail funds should be subject to greater scrutiny and limits on the amount of bail assistance they can offer. The lobbying group has been raising concerns about “charity fraud” and attempting to link bail funds to increased crime, despite little evidence for such a claim.

The face of these lobbying efforts is usually Jeff Clayton, the executive director of the American Bail Coalition. In one recent political podcast interview, Clayton spoke frankly about his financial backers: “People might not like corporate bail bondsmen and all these guys, but you know what, they’re funding me to stop you,” he said, referring to bail reform.

“When there are hearings on these things, Jeff Clayton is there,” said Cherson.

To advance its interests, Clayton and the American Bail Coalition have developed particular influence at the American Legislative Exchange Council, a powerful conservative organization that ghostwrites laws for corporate interests. The coalition’s vice president sits on the organization’s private sector advisory council, and Clayton chairs the group’s criminal justice task force.

Clayton did not return a request for comment from the Lever.

“Violent Offenders Are Escaping Jail”

Scott Fitzgerald, the lawmaker who authored the most recent bill attacking bail funds, is an alumnus of the American Legislative Exchange Council. As a lawmaker in Wisconsin, he was known to introduce other legislation that was originally developed by the organization, sometimes word for word.

Fitzgerald also has strong ties to the insurance industry, which is his top industry donor, according to data aggregated by OpenSecrets, giving him more than $120,000 in campaign contributions this election cycle. He has introduced legislation with the support of the American Bail Coalition several times since taking office.

Fitzgerald introduced his bill, the “Keeping Violent Offenders Off Our Streets Act,” in May, with the blessing of Clayton and the American Bail Coalition. The coalition provided a quote in Fitzgerald’s original news release supporting the legislation, warning that “violent offenders are escaping jail on get-out-of-jail free cards,” and praising Fitzgerald’s efforts to stop it. Since then, the lobbying group has been advocating for the bill on social media.

The bill’s backers claim that bail funds are driving up crime by allowing people out of jail — often pointing to lurid stories of people who, after being bailed out of jail after an arrest on a minor criminal charge, went on to commit violent crimes. Yet such arguments elide the fact that a judge decides whether or not to allow a defendant out on bail. Bail funds simply provide another way for those deemed not a risk to pay.

The bill passed the House of Representatives on September 25 with significant bipartisan support: forty-four Democrats joined with Republicans to pass the legislation. The proposal will now need approval from the Democrat-controlled Senate, and with the congressional session nearing a close, it’s not clear that it has a viable path to passage. But it’s a sign of the mounting attacks that community-minded bail funds are facing from the bail industry — including in the halls of Congress.

“This is the first piece of federal legislation of this sort that we’re aware of,” said Cherson with the Bail Project. “I haven’t seen a direct amendment of the criminal code in this particular way, especially not at the federal level.”

The bill would subject all charitable bail funds and any other organizations that help people post bail to potential criminal penalties under insurance fraud laws.

“Effectively, it has the potential to criminalize anyone who is not a commercial bail agent,” Cherson said. This could include not only large national bail funds like the Bail Project, but also faith groups or small shoestring community organizations that will sometimes provide bail assistance, he said.

Over the last four years, states have also launched similar crackdowns on bail funds — at the urging of the American Bail Coalition. Texas and Indiana have both passed legislation targeting bail funds since 2021, and as the American Bail Coalition has emphasized in recent reports, lawmakers in several other states have introduced similar legislation.

But the harshest crackdown on bail funds has been in Georgia, which passed a law earlier this year that banned any individual or organization from posting bail for anyone more than three times annually — an outright ban on bail funds and bail assistance generally. (Bail bond companies are exempt from the law.)

A federal judge blocked provisions in the law that banned bail funds from going into effect in June after the American Civil Liberties Union sued, arguing the statute was unconstitutional. Yet the decision is only temporary, and it left in place many other aspects of Georgia’s suite of pro-bail bond reforms. That included measures that expanded the number of crimes that require cash bail — a clear win for bail bondsmen in the state, who will now almost certainly be seeing more clients.

“Other states have tried to copy this, but clearly Georgia is in the lead,” the American Bail Coalition wrote in its statement commending the legislation.