Bail Bonds Part II – Is The Business Doomed?

<< Read More: Bail Bonds Part 1 – The Business

I wrote recently that what I learned about bail bonds companies made me appreciate them, at least from my capitalistic “that’s an interesting and possibly profitable way to make money” perspective.

That doesn’t mean I’m deaf to other arguments, against the industry. Those arguments have gotten louder recently, to the point that bail bonds businesses in places like Houston, and the entire state of New Jersey for that matter, face an existential threat right now. They may not survive.

If you don’t work in and around the bail bonds industry, you might not already know that a recent judge’s ruling is killing them in Houston.

At the end of April Chief District Court Judge Lee Rosenthal ruled that all defendants accused of misdemeanor offenses in Harris County (where Houston is) must be released from jail within 24 hours. The ruling went into effect this summer in Harris County, pending resolution of a lawsuit, expected in October.

The practical effect of the ruling is to make all misdemeanor defendants eligible for bail through county-supported pretrial services or a Sherriff’s bond, thus avoiding the need to pay for a more costly private bail bond.

That, plus the expansion of Harris County’s pre-trial services to respond to the ruling, has caused the elimination of 80 percent of the private bail bonds business, according to John McCluskey of Action Bail Bonds in Houston. He believes all of his fellow bail bonds competitors in Harris County have seen a similar catastrophic drop-off in their business. According to McCluskey, they’re pretty much dead.

Let me break down the arguments about bail bonds, pro and con. Proponents and opponents of commercial bail bonds cite the same three important factors, but come to completely opposite conclusions about the proper role of private bail bonds versus what we might call the ‘public option,’ made up of a nearly-free County-supported pre-trial services’ “personal bond,” or another free public-option, called a Sherriff’s bond.