FMCSA unveils final rule on broker financial responsibility

The Federal Motor Carrier Safety Administration took a step toward improving broker problems in the trucking industry by publishing a final rule that addresses financial responsibility.

Now, the Owner-Operator Independent Drivers Association would like the agency to take the next step and address the lack of broker transparency in the industry.

“This is a step in the right direction to enhance oversight of broker financial responsibilities as we continue to work with partners to fight for increased broker transparency and the elimination of broker fraud,” OOIDA President Todd Spencer said.

FMCSA published a final rule regarding broker and freight forwarder financial responsibility on Thursday, Nov. 16. The rule was published ahead of schedule as the agency had projected it to be released next March.

“It is FMCSA’s intent that the provisions in this rule will alleviate the effects of broker or trustee non-payment of claims,” the agency wrote. “Brokers who fail or refuse to pay carriers for legitimate services rendered will have their operating authority suspended and will be unable to continue accruing claims over time. Carriers will have more information to avoid contracting with unscrupulous brokers and could also receive payment for work completed in a more timely manner, without use of interpleader proceedings.”

The final rule aims to:

• Limit the asset types that can be maintained in broker or freight forwarder trusts to cash, treasury bonds and irrevocable letters of credit issued by a federally insured depository institution
• Establish procedures and requirements for the immediate suspension of broker and freight forwarder operating authority registration if the available financial security falls below $75,000
• Clarify when a broker or freight forwarder is in financial failure or insolvency and establish related requirements
• Amend FMCSA regulations to add civil penalties for surety and trust fund violations of the regulations and establish a process for the suspension of sureties and trusts in the event of non-compliance with the regulations

Broker transparency

FMCSA unveiled the broker financial responsibility rule ahead of schedule, but its rulemaking regarding broker transparency isn’t expected until late 2024.

OOIDA has urged FMCSA to take action as it originally petitioned the agency in 2020.

“More can and should be done,” Spencer said. “We encourage FMCSA to continue to move in the right direction by expediting their rulemaking on OOIDA’s 2020 petition to enhance broker transparency. Truckers shouldn’t have to wait an additional year for the agency to ensure brokers are following federal regulations that have been required since 1980.”

OOIDA’s petition asked the agency:

• To require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed
• To explicitly prohibit brokers from including any provision that requires carriers to waive their rights to access the transaction records

Regulation CFR 371.3 already requires that brokers keep records of each transaction with a carrier and that each party to the transaction has a right to view these records. OOIDA asked the agency to begin enforcing that regulation and to eliminate any loopholes that allowed brokers to sidestep the rule. LL