Broker and Freight Forwarder Financial Responsibility

Raymond P. Martinez
Federal Motor Carrier Safety Administration
27 September 2018

[Federal Register Volume 83, Number 188 (Thursday, September 27, 2018)]
[Proposed Rules]
[Pages 48779-48787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21052]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 387

[Docket No. FMCSA-2016-0102]
RIN 2126-AC10


Broker and Freight Forwarder Financial Responsibility

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Advance notice of proposed rulemaking (ANPRM); request for 
comments.

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[[Page 48780]]

SUMMARY: FMCSA announces that it is initiating rulemaking action 
pertaining to the implementation of the Moving Ahead for Progress in 
the 21st Century Act (MAP-21). MAP-21 raised the financial security 
amount for brokers to $75,000 and, for the first time, established 
financial security requirements for freight forwarders. In this ANPRM, 
the Agency is considering eight separate areas: Group surety bonds/
trust funds, assets readily available, immediate suspension of broker/
freight forwarder operating authority, surety or trust responsibilities 
in cases of broker/freight forwarder financial failure or insolvency, 
enforcement authority, entities eligible to provide trust funds for 
form BMC-85 trust fund filings, Form BMC-84 and BMC-85 trust fund 
revisions, and household goods (HHG). The Agency seeks comments and 
data in response to this ANPRM.

DATES: Comments on this document must be received on or before November 
26, 2018.

ADDRESSES: You may submit comments bearing the Federal Docket 
Management System Docket ID (FMCSA-2016-0102) using any of the 
following methods:
    Federal eRulemaking Portal: Go to http://www.regulations.gov. 
Follow the online instructions for submitting comments.
    Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor, 
Room W12-140, Washington, DC 20590.
    Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 
1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 
p.m., ET, Monday through Friday, except Federal holidays.
    Fax: 1-202-493-2251.
    Confidential Business Information (CBI): Submissions containing CBI 
and marked in accordance with 49 CFR 389.9 must be sent to Mr. Brian 
Dahlin, Chief, Regulatory Evaluation Division, 1200 New Jersey Avenue 
SE, Washington, DC 20590.
    Each submission must include the Agency name and the docket number 
for this document. Note that DOT posts all comments received without 
change, except those marked in accordance with 49 CFR 389.9, to 
www.regulations.gov, including any personal information included in a 
comment. Please see the Privacy Act heading below.
    Docket: For access to the docket to read background documents or 
comments, go to www.regulations.gov at any time or visit Room W12-140 
on the ground level of the West Building, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590, 
between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
holidays. The online Federal document management system is available 24 
hours each day, 365 days each year. If you would like acknowledgment 
that the Agency received your comments, please include a self-
addressed, stamped envelope or postcard or print the acknowledgement 
page that appears after submitting comments online.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits 
comments from the public to better inform its rulemaking process. DOT 
posts these comments, without edit, including any personal information 
the commenter provides, to www.regulations.gov, as described in the 
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: For information concerning this ANPRM, 
contact Mr. Jeff Secrist, Office of Registration and Safety 
Information, at (202) 385-2367, or by email at jeff.secrist@dot.gov, or 
Mr. Kenneth Riddle, Office of Registration and Safety Information, at 
(202) 366-9616 or by email at kenneth.riddle@dot.gov.
    If you have questions on viewing or submitting material to the 
docket, contact Docket Services at 202-366-9826.

SUPPLEMENTARY INFORMATION: This advance notice of proposed rulemaking 
(ANPRM) is organized as follows:

I. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
II. Legal Basis
III. Background
    A. 2013 Omnibus Final Rule Increased Financial Security Amount
    B. Other Broker and Freight Forwarder Requirements
    C. 2014 Advance Notice of Proposed Rulemaking
    D. 2016 Public Informal Roundtable Discussion
IV. New MAP-21, Sec. 32918, Advance Notice of Proposed Rulemaking
    A. Two Key Issues Stakeholders Want Addressed
    B. Eight Areas Being Considered
    1. Group Surety Bonds/Trust Funds
    2. Assets Readily Available
    3. Immediate Suspension of Operating Authority
    4. Surety or Trust Responsibilities in Cases of Broker/Freight 
Forwarder Financial Failure or Insolvency
    5. Enforcement Authority
    6. Eligible BMC-85 Trust Funds
    7. BMC-84 and BMC-85 Form Revisions
    8. Household Goods
V. Rulemaking Analyses
    A. E.O. 12866 Regulatory Planning and Review and DOT Regulatory 
Policies and Procedures
    B. E.O. 13771 Reducing Regulation and Controlling Regulatory 
Costs
    C. Small Business Regulatory and Enforcement Fairness Act
VI. Comments Sought

I. Public Participation and Request for Comments

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
document (FMCSA-2016-0102), indicate the specific section of this 
document to which each comment applies, and provide a reason for each 
suggestion or recommendation. You may submit your comments and material 
online or by fax, mail, or hand delivery, but please use only one of 
these methods. FMCSA recommends that you include your name and a 
mailing address, an email address, or a phone number in the body of 
your document so that the Agency can contact you if it has questions 
regarding your submission.
    To submit your comment online, go to http://www.regulations.gov and 
put the docket number, ``FMCSA-2016-0102'' in the ``Keyword'' box, and 
click ``Search''. When the new screen appears, click on the ``Comment 
Now!'' button and type your comment into the text box in the following 
screen. Choose whether you are submitting your comment as an individual 
or on behalf of a third party and then submit. If you submit your 
comments by mail or hand delivery, submit them in an unbound format, no 
larger than 8\1/2\ by 11 inches, suitable for copying and electronic 
filing. If you submit comments by mail and would like to know that they 
reached the facility, please enclose a stamped, self-addressed postcard 
or envelope.
Confidential Business Information
    Confidential Business Information (CBI) is commercial or financial 
information that is customarily not made available to the general 
public by the submitter. Under the Freedom of Information Act, CBI is 
eligible for protection from public disclosure. If you have CBI that is 
relevant or responsive to this document, it is important that you 
clearly designate the submitted comments as CBI. Accordingly, please 
mark each page of your submission as ``confidential'' or ``CBI.'' 
Submissions designated as CBI and meeting the definition noted above 
will not be placed in the public docket of this document. Submissions 
containing CBI should be sent to Mr. Brian Dahlin at

[[Page 48781]]

the address shown above under the heading ADDRESSES. Any commentary 
that FMCSA receives which is not specifically designated as CBI will be 
placed in the public docket for this rulemaking.
    FMCSA will consider all comments and materials received during the 
comment period.

B. Viewing Comments and Documents

    To view comments, go to http://www.regulations.gov and insert the 
docket number, ``FMCSA-2016-0102'' in the ``Keyword'' box and click 
``Search''. Next, click the ``Open Docket Folder'' button and choose 
the document listed to review. If you do not have access to the 
internet, you may view the docket by visiting the Docket Management 
Facility in Room W12-140 on the ground floor of the DOT West Building, 
1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays.

II. Legal Basis

    In 2012, Congress enacted the Moving Ahead for Progress in the 21st 
Century Act (MAP-21) (Pub. L. 112-141, 126 Stat. 405, 822), 
specifically, section 32918 which contained requirements for the 
financial security of brokers and freight forwarders that amended 49 
U.S.C. 13906.

III. Background

A. 2013 Omnibus Final Rule Increased Financial Security Amount

    Section 32918 raised the financial security amount for brokers to 
$75,000 and, for the first time, established financial security 
requirements for freight forwarders. A ``broker'' is a ``person . . . 
that as a principal or agent sells, offers for sale, negotiates for, or 
holds itself out by solicitation, advertisement, or otherwise as 
selling, providing, or arranging for, transportation by motor carrier 
for compensation.'' 49 U.S.C. 13102(2); see also 49 CFR 371.2(a)(FMCSA 
regulatory definition of ``Broker''). A ``freight forwarder'' is 
defined as ``a person holding itself out to the general public (other 
than as a pipeline, rail, motor, or water carrier) to provide 
transportation of property for compensation and in the ordinary course 
of its business'' (1) performs certain services including assembly, 
break-bulk or distribution services, (2) ``assumes responsibility for 
the transportation from the place of receipt to the place of 
destination'' and (3) ``uses for any part of the transportation a 
carrier'' such as a motor carrier. 49 U.S.C. 13102(8); see also 49 CFR 
387.401(a)(FMCSA regulatory definition of freight forwarder).
    FMCSA implemented those MAP-21 financial responsibility limit 
requirements in a 2013 Omnibus rulemaking, 78 FR 60226 (Oct. 1, 2013), 
codified at 49 CFR 387.307(a) (brokers) and 49 CFR 387.403T(c) and 
387.405 (freight forwarders). Under the existing regulations, brokers 
and freight forwarders must have in effect a surety bond or trust fund 
in the amount of $75,000. As a condition to obtain registration, 
brokers and freight forwarders must provide evidence of the surety bond 
by filing a form BMC-84 or the trust fund by filing a form BMC-85 with 
the Agency.

B. Other Broker and Freight Forwarder Requirements

    In addition to increasing and extending the minimum financial 
responsibility requirements, MAP-21 also gave FMCSA the authority to 
accept a ``group surety bond, trust fund, or other financial security'' 
as evidence of financial responsibility (49 U.S.C. 13906(b)(1)(B), 
(c)(1)(B)). MAP-21 authorized FMCSA to accept trust funds or other 
financial security only if they consist of ``assets readily available 
to pay claims without resort to personal guarantees or collection of 
pledged accounts receivable'' (49 U.S.C. 13906(b)(1)(C), (c)(1)(D)). 
The statute also clarified the types of claims that broker and freight 
forwarder surety bonds/trust funds are designed to cover (49 U.S.C. 
13906(b)(2)(A), (c)(2)(A)).
    Section 32918 of MAP-21 requires the Agency to ``immediately 
suspend'' broker/freight forwarder operating authority registration if 
the ``available financial security'' of the broker or freight forwarder 
falls below $75,000 (49 U.S.C. 13906(b)(5), (c)(6)), and also 
established claims payment procedures in the event of broker or freight 
forwarder ``financial failure or insolvency'' (49 U.S.C. 13906(b)(6), 
(c)(7)). Additionally, MAP-21 gave FMCSA the authority to take direct 
enforcement action against surety providers, through court action, 
civil penalty proceedings or suspension of providers' ability to make 
financial security filings with the Agency (49 U.S.C. 13906(b)(7), 
(c)(8)). Finally, section 32918 clarified that the form of broker/
freight forwarder financial responsibility and who provides such 
security must be approved by FMCSA (49 U.S.C. 13906(b)(1)(A), 
(c)(1)(A)).\1\
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    \1\ Compare current 49 U.S.C. 13906(b)(1)(A) (``The Secretary 
may register a person as a broker . . . only if the person files 
with the Secretary a surety bond, proof of trust fund . . . in a 
form and amount, and from a provider, determined by the Secretary to 
be adequate to ensure financial responsibility'') with previous 
13906(b) (``The Secretary may register a person as a broker under 
section 13904 only if the person files with the Secretary a bond, 
insurance policy or other type of security approved by the Secretary 
to ensure that the transportation for which a broker arranges is 
provided.'').
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C. 2014 Advance Notice of Proposed Rulemaking

    The Agency moved a step further toward implementation of section 
32918 in its 2014 Advance Notice of Proposed Rulemaking (2014 ANPRM) 
pertaining to Financial Responsibility for Motor Carriers, Freight 
Forwarders and Brokers. 79 FR 70839 (Nov. 28, 2014).\2\ Although that 
2014 ANPRM focused primarily on motor carrier minimum financial 
responsibility limits, the Agency did ask three questions pertaining to 
BMC-84/85 filers. Specifically, the Agency sought information 
pertaining to BMC-85 providers' posting of claims information on their 
websites, the public notification by BMC-85 providers in the event of 
broker or freight forwarder financial failure, and the possible need 
for the BMC-84/85 forms to be adjusted to provide claims handling 
instructions to the surety or trustee. 79 FR at 70843. The Agency 
received several comments in response to its request.\3\ After 
reviewing all public comments to the ANPRM, FMCSA determined that it 
had insufficient data or information to support moving forward with a 
rulemaking proposal, and withdrew the 2014 ANPRM on June 5, 2017. See 
82 FR 25753.
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    \2\ On May 9, 2014, the Transportation Intermediaries 
Association (TIA) filed with FMCSA a ``Petition for Rulemaking: 
Requirements for BMC-84 Bond and BMC-85 Trust Providers.'' In its 
petition, TIA sought to require that trust fund payments be made 
public, sought ``clarification of BMC-85 trust deposits,'' and 
sought ``clarification of when a BMC-84 bond or BMC-85 trust may 
make payments,'' among other issues. The Agency met with TIA to 
discuss its petition in March 2015, and TIA submitted a March 30, 
2015, follow-up letter in response to that meeting. FMCSA believes 
that the issuance of this ANPRM will allow TIA to raise concerns 
related to its Petition for Rulemaking in the course of this 
proceeding and accordingly is denying the TIA petition as moot.
    \3\ See Comments of: M. Thomas Ruke, Jr., Docket No. FMCSA-2014-
0211-1668, at 3-4 (Feb. 24, 2015); Avalon Risk Management Insurance 
Agency, LLC., Docket No. FMCSA-2014-0211-1675, at 4-9 (Feb. 25, 
2015); Roanoke Insurance Group, Inc., Docket No. FMCSA-2014-0211-
1997, at 1-3 (Mar. 2, 2015); Transportation Intermediaries 
Association, Docket No. FMCSA-2014-0211-2033, at 5-10 (Mar. 2, 
2015); Owner-Operator Independent Drivers Association, Inc. and 
OOIDA Risk Retention Group, Inc., Docket No. FMCSA-2014-0211-2148, 
at 51-53 (Mar. 3, 2015).
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D. 2016 Public Informal Roundtable Discussion

    On April 27, 2016, the Agency announced that it would host an

[[Page 48782]]

informal roundtable discussion pertaining to broker and freight 
forwarder financial responsibility, 81 FR 24935 (Apr. 27, 2016). In its 
April 27 meeting notice, FMCSA sought comment on denials of claims by 
BMC-85 providers, the current and prospective composition of BMC-85 
trust fund assets, non-FMCSA regulation of BMC-85 providers, actions 
that FMCSA could take to ensure that motor carriers and shippers can 
collect on legitimate claims filed with BMC-85 providers, and issues 
associated with the financial stability of BMC-85 providers. 81 FR at 
24937. The Agency received a total of 29 comments in response to the 
roundtable discussion notice.
    On May 20, 2016, the Agency held the full-day informal roundtable 
discussion at DOT Headquarters in Washington, DC. Stakeholders from 
around the country attended the event, along with members of FMCSA's 
Senior Leadership and staff. Public participants included 
representatives from the BMC-84 surety bond and BMC-85 trust fund 
industries, broker and freight forwarder trade associations, and motor 
carrier trade associations. On October 20, 2016, the Agency placed 
notes summarizing the public meeting and a list of the meeting 
attendees in this docket.\4\
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    \4\ FMCSA-2016-0102-0030 (Oct. 20, 2016).
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IV. New MAP-21, Sec. 32918, Advance Notice of Proposed Rulemaking

    After careful consideration of the public comments the Agency 
received in response to the 2014 ANPRM and the April 27, 2016 notice, 
TIA's 2014 Petition for Rulemaking, and the May 20 Roundtable itself, 
FMCSA has decided to initiate a second rulemaking pertaining to MAP-21 
section 32918.\5\ Accordingly, the Agency is issuing this ANPRM to 
signal its preliminary intentions in connection with such a rulemaking 
and to seek additional data or information to support moving forward 
with a rulemaking proposal. As noted above, this ANPRM will render moot 
TIA's May 9, 2014 Petition for Rulemaking.
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    \5\ This initiative will not pertain to increasing motor carrier 
minimum financial responsibility limits pursuant to 49 U.S.C. 31138-
31139.
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A. Two Key Issues Stakeholders Want Addressed

    Discussions at the May 20, 2016, informal roundtable revealed that 
stakeholders are focused on two key issues pertaining to broker/freight 
forwarder financial responsibility. First, there was widespread 
agreement among participants that a significant cause of non-payment of 
motor carriers by brokers or freight forwarders \6\ is the ability of 
brokers and freight forwarders to continue to operate for 30 days after 
the surety or trust fund provider notifies FMCSA that it is cancelling 
the broker's or freight forwarder's financial responsibility. FMCSA 
does not revoke the broker or freight forwarder's operating authority 
registration pursuant to 49 U.S.C. 13905(e) until that 30-day period 
has lapsed. In contrast, the MAP-21 provisions pertaining to immediate 
suspension of broker or freight forwarder operating authority when the 
``available financial security'' falls below $75,000 (49 U.S.C. 
13906(b)(5), (c)(6)), appear to be designed to address this lag between 
surety/trust fund notice of cancellation and removal of the broker/
freight forwarders' ability to operate lawfully. The Agency is 
therefore considering adopting a rule to suspend immediately any 
broker's/freight forwarder's operating authority when there is an 
actual drawdown on the bond/trust fund below the $75,000 minimum 
requirement or when the broker/freight forwarder does not respond after 
the surety/trust fund provider provides notice of a valid claim.
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    \6\ The stakeholders indicated that few freight forwarders still 
operate in the industry and that the primary issues being addressed 
pertain to brokers, not freight forwarders. FMCSA records indicate 
there were 1,499 active freight forwarders as of August 2017.
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    Second, at the roundtable discussion, certain stakeholders made it 
clear to the Agency that there is concern about the financial 
wherewithal of BMC-85 trust providers, and the sufficiency of the 
assets within those funds to pay legitimate claims by motor carriers or 
shippers. On the other hand, representatives of the BMC-85 trust fund 
provider community, both at the roundtable discussion and in comments 
filed after the meeting,\7\ asserted that, with one limited 
exception,\8\ no evidence has been produced showing that BMC-85 
providers have failed to pay legitimate claims made on their trusts. 
While FMCSA acknowledges the BMC-85 providers' position, the Agency 
must implement the express will of Congress as reflected in the 
requirement at 49 U.S.C. 13906(b)(1)(C), (c)(1)(D) that trust funds 
consist of ``assets readily available to pay claims without resort to 
personal guarantees or collection of pledged accounts receivable.''
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    \7\ See Comments of: John B. Gilding, Docket No. FMCSA-2016-
0102-0021, at 1 (May 31, 2016); Transport Financial Services, LLC, 
Docket No. FMCSA-2016-0102-0027, at 2-3 (June 20, 2016); Liberty 
National Financial Corp., Docket No. FMCSA-2016-0102-0029, at 1 
(June 28, 2016).
    \8\ According to certain stakeholders, Oasis Capital, Inc. 
(Oasis), a BMC-85 trust fund provider, failed to pay claims due to 
criminal activity. FMCSA revoked Oasis's authorization to file BMC-
85 trust funds on behalf of brokers in 2010, and the Agency required 
those brokers utilizing Oasis BMC-85s as evidence of financial 
responsibility to file new BMC-84s or BMC-85s or face loss of their 
operating authority. Bonnie Warren, Oasis's president, ultimately 
pled guilty to wire fraud in connection with Oasis's conduct, and 
the court imposed a sentence that included home confinement and 
other sanctions. https://www.oig.dot.gov/library-item/32968.
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    While the Agency always welcomes input on its implementation of 
statutory mandates, as evidenced by the frank, open, and robust 
discussions at the May 20, 2016 roundtable, FMCSA's primary mission 
remains the promotion of motor carrier safety. 49 U.S.C. 113(b). 
Accordingly, in its implementation of section 32918, FMCSA must avoid 
unnecessary diversion of scarce resources away from critical safety 
functions. FMCSA's discussion of approaches in today's ANPRM reflects 
that statutory and operational reality, and the Agency requests that 
stakeholders consider such constraints in whatever comments they 
provide in response to this document.

B. Eight Areas Being Considered

    After careful consideration, the Agency has decided to focus on 
eight core areas in this ANPRM: (1) Group surety bonds/trust funds, (2) 
assets readily available, (3) immediate suspension of broker/freight 
forwarder operating authority, (4) surety or trust responsibilities in 
cases of broker/freight forwarder financial failure or insolvency, (5) 
enforcement authority, (6) entities eligible to provide trust funds for 
BMC-85 filings, (7) BMC-84 and BMC-85 revisions and (8) HHG.\9\ The 
following discussion addresses each of these in turn.
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    \9\ While HHG broker/freight forwarder financial responsibility 
falls within the scope of MAP-21 Section 32918's new broker/freight 
forwarder financial security requirements, the Agency has previously 
recognized that HHG broker financial security as distinct from other 
property broker financial security. See Brokers of Household Goods 
Transportation by Motor Vehicle, 75 FR 72987 (Nov. 29, 2010), in 
which the Agency increased the broker bond/trust fund amount for HHG 
brokers only, from $10,000 to $25,000. Accordingly, in this ANPRM 
regarding broker/freight forwarder financial responsibility, the 
Agency announces it is considering changes specific to HHG broker/
freight forwarder financial responsibility and seeks related 
specific information.
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1. Group Surety Bonds/Trust Funds
    MAP-21 section 32918 authorizes, but does not require, the Agency 
to accept group surety bonds or trust funds on behalf of brokers or 
freight forwarders to meet their financial responsibility requirements. 
49 U.S.C. 13906(b)(1)(B) and 13906(c)(1)(B). In Registration and 
Financial Security

[[Page 48783]]

Requirements for Brokers of Property and Freight Forwarders, 78 FR 
54720 (Sep. 5, 2013), the Agency stated that it would not be accepting 
group instruments at that time. 78 FR at 54721. The Agency indicated it 
would re-examine the issue, however.
    While the term ``group surety bond'' does not appear to be commonly 
used, the Agency has identified and examined a group surety bond 
provision within the Federal Maritime Commission (FMC) regulations. 46 
CFR 515.21. FMC regulates Ocean Transportation Intermediaries (OTIs), 
consisting of Non-Vessel Operating Common Carriers (NVOCCs) (similar to 
FMCSA-regulated freight forwarders), and freight forwarders (similar to 
FMCSA-regulated brokers). These OTIs are required to submit evidence of 
financial responsibility to FMC and can submit group surety bonds as 
evidence of such financial responsibility. In a group surety bond 
arrangement, OTI members pay a fee to belong to a group, which then 
provides the required surety bond for each member. FMC's group surety 
bond provision allows the group to establish financial responsibility 
in the amount required for each individual member or $3,000,000 in 
aggregate, whichever is less.
    FMCSA is concerned that monitoring whether group instruments comply 
with MAP-21 will impose a significant administrative burden on the 
Agency, potentially to the detriment of safety oversight, without 
providing a commensurate benefit for motor carriers and shippers, the 
intended beneficiaries of the surety bonds and trust funds. The benefit 
to these beneficiaries from group instruments likely would be 
unchanged, as the same total level of financial protection would still 
be required.
    Further, because FMCSA requires that a trust fund or surety bond 
cover each broker or freight forwarder for $75,000, the FMC surety bond 
requirement, with its $3 million cap, does not provide an adequate 
model for the Agency to ensure levels of financial security as 
contemplated by the statute. In addition, the Agency has been unable to 
locate any definition for group trust funds. Therefore, with no 
adequate model for group surety bonds or trusts funds, the Agency is 
not currently inclined to accept group sureties or trust funds. Before 
the Agency considers the matter of group surety or trust arrangements 
further for purposes of developing a notice of proposed rulemaking 
(NPRM) in this docket, we specifically seek comment on the definition 
of ``group surety bond'' or ``group trust fund'' and how the Agency 
could administer such a group surety or trust option given its limited 
resources.
2. Assets Readily Available
    As noted above, Congress issued a clear mandate in MAP-21 that 
broker/freight forwarder trust funds must consist of ``assets readily 
available to pay claims without resort to personal guarantees or 
collection of pledged accounts receivable.'' 49 U.S.C. 13906(b)(1)(C), 
(c)(1)(D). The Agency is committed to adopting a definition of ``assets 
readily available'' that implements the will of Congress and is 
reasonable for the Agency to administer given its resource constraints.
    Stakeholders provided numerous comments on the definition of 
``assets readily available'' at the roundtable discussion and in 
associated written comments. Avalon Risk Management Insurance Agency 
LLC (Avalon), an underwriter of BMC-84 bonds, suggested in its pre-
roundtable comments that cash or certain irrevocable letters of credit 
issued by Federal Deposit Insurance Corporation (FDIC)-insured banks 
would satisfy the standard.\10\ The Surety & Fidelity Association of 
America (SFAA), also in pre-roundtable comments, looked to other 
federal law or regulation for a standard.\11\ In particular, SFAA cited 
Federal Acquisition Regulation (FAR) 28.204, which, according to SFAA, 
requires that financial security be provided in the form of United 
States government bonds or notes, a certified or cashier's check, an 
irrevocable letter of credit, or other options that are easily 
convertible into cash. SFAA's post-roundtable comment also recommended 
that $75,000 of broker assets need to be in trust funds.\12\ In post-
roundtable comments, JW Surety Bonds, a company that issues BMC-84 
surety bonds, argued for full funding of the trust with non-volatile 
liquid assets, including cash or an irrevocable letter of credit from 
an FDIC-insured bank.\13\
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    \10\ See Comments of Avalon Risk Management Insurance Agency 
LLC, Docket No. FMCSA-2016-0102-0014, at 3-4 (May 18, 2016).
    \11\ See Comments of The Surety & Fidelity Association of 
America, Docket No. FMCSA-2016-0102-0011, at 2 (May 9, 2016).
    \12\ See Comments of The Surety & Fidelity Association of 
America, Docket No. FMCSA-2016-0102-0022, at 2-3 (June 7, 2016).
    \13\ See Comments of JW Surety Bonds, Docket No. FMCSA-2016-
0102-0023, at 5, 8 (June 10, 2016).
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    While FMCSA has heard from multiple representatives of the BMC-84 
industry on an appropriate definition of ``assets readily available,'' 
it has heard little from the BMC-85 industry. We received only one 
comment, from the Chief Executive Officer of Pacific Financial 
Association, Inc. (Pacific Financial), the largest filer of BMC-85s 
with FMCSA. At the roundtable, Pacific Financial indicated that 
Congress clearly did not limit the term to cash only. It also suggested 
that if a trust purchased a bond to cover a $75,000 guarantee, such an 
arrangement could be sufficient.\14\ Pacific Financial also filed 
supplemental materials and pointed to their own ``internal letter of 
credit'' as a viable alternative.
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    \14\ See Broker and Freight Forwarder Financial Responsibility 
Roundtable Discussion Notes, Docket No. FMCSA-2016-0102-0030, at 6 
(Oct. 20, 2016).
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    After a careful analysis and with specific regard for Pacific 
Financial's comments, the Agency is currently considering proposing a 
definition of ``assets readily available'' to include cash or FMCSA-
approved letters of credit.\15\ FMCSA is considering accepting letters 
of credit from FDIC-approved banks, but is also open to other options.
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    \15\ Before MAP-21, the Agency signaled its view that broker 
trust funds must consist of cash. In describing a delayed effective 
date for the increase of the surety bond/trust fund requirement from 
$10,000 to $25,000 for HHG brokers in its 2010 HHG broker 
rulemaking, the Agency stated ``for those household goods brokers 
using trust fund agreements, this should give sufficient time for 
these entities to raise the additional $15,000 of capital to place 
in escrow with their trust fund managers.'' Brokers of Household 
Goods Transportation by Motor Vehicle. 75 FR 72987, 72992 (Nov. 29, 
2010).
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    The Agency solicits suggestions from the BMC-85 industry and others 
about how the Agency could accept letters of credit and other 
instruments that could meet the ``assets readily available'' standard 
without requiring significant oversight or evaluation that would divert 
scarce safety resources. The Agency also specifically seeks comment 
from the surety bond industry on that industry's capacity to meet the 
increased market demand if FMCSA were to adopt a cash-only standard for 
BMC-85 trust funds, which could potentially drive a significant segment 
of the broker/forwarder industry into surety bond coverage. 
Additionally, FMCSA seeks comment from the surety bond industry on the 
cost to brokers and freight forwarders of BMC-84 surety bonds.
3. Immediate Suspension of Operating Authority
    MAP-21 section 32918 provides that ``[FMCSA] shall immediately 
suspend the registration of a broker . . . if the available financial 
security of that person falls below [$75,000].'' 49 U.S.C. 13906(b)(5); 
see also 49 U.S.C. 13906(c)(6) (substantively identical language for 
freight forwarders). Accordingly, to effectively implement

[[Page 48784]]

these provisions, FMCSA first needs to determine when the ``available 
financial security'' of a broker/freight forwarder is below $75,000. At 
the roundtable discussion, the Owner-Operator Independent Drivers 
Association (OOIDA) indicated that as soon as a surety provides notice 
to a broker in connection with a claim and the broker does not respond 
to the notice, the broker's operating authority registration should be 
suspended.\16\ According to the Roanoke Insurance Group (Roanoke), a 
series of claims should trigger quicker suspension of the broker's 
operating authority.\17\ Roanoke also indicated that quicker suspension 
should occur where the broker does not respond to communications about 
the claim.\18\ In post-meeting comments, Liberty National Financial 
Corporation said a broker's failure to respond to a surety contact 
about a claim in 24 hours would be a reasonable trigger for suspension 
of the broker's authority.\19\
---------------------------------------------------------------------------

    \16\ See Broker and Freight Forwarder Financial Responsibility 
Roundtable Discussion Notes, Docket No. FMCSA-2016-0102-0030, at 2 
(Oct. 20, 2016).
    \17\ Id. at 7.
    \18\ Id.
    \19\ See Comments of Liberty National Financial Corp., Docket 
No. FMCSA-2016-0102-0029, at 2 (June 28, 2016).
---------------------------------------------------------------------------

    The Agency is considering an approach where it would ``immediately 
suspend'' the authority of a broker or freight forwarder in one of two 
situations. First, it would suspend when it receives notice from the 
surety or trust fund provider that a drawdown/payout on the bond/trust 
has occurred, such that the available financial security is less than 
$75,000. The second situation would be where: (1) A surety/trust fund 
provider gives reasonable notice of a claim to the broker/freight 
forwarder, (2) the broker/freight forwarder does not respond, and (3) 
the surety/trust fund provider determines that the claim is valid and 
provides notice of these events to FMCSA. In this situation there often 
may be reason to conclude that, had the unpaid claim actually been 
paid, the remaining available financial security would have fallen 
below $75,000. FMCSA seeks comment on the appropriate cushion time for 
brokers or freight forwarders to respond to claims made to the 
guarantors, valid or otherwise. Such a grace period would seem to give 
firms adequate time to adjudicate claims and settlements internally, as 
well as price in the costs associated with any claims relating to 
contract noncompliance.
    Suspending broker/freight forwarder operating authority whenever a 
claim is filed against a broker/freight forwarder or its bond/trust 
would raise due process concerns, as the Agency would be prohibiting 
the broker/freight forwarder from lawfully operating, without affording 
the company a chance to respond. In continuing to develop information 
to inform an NPRM, the Agency will consider how it can ``immediately 
suspend'' broker/freight forwarder operating authority registration in 
a manner that is consistent with constitutional due process 
requirements, e.g., by providing an appropriate opportunity for post-
deprivation review. FMCSA specifically invites comments responsive to 
this issue, including documented incidence of actual nonpayment that 
occurred after problem brokers or freight forwarder were not 
``immediately'' suspended.
4. Surety or Trust Responsibilities in Cases of Broker/Freight 
Forwarder Financial Failure or Insolvency
    Section 32918 requires sureties or trust fund providers to commence 
action to cancel broker or freight forwarder surety bonds or trust 
funds in the event of broker/freight forwarder ``financial failure'' or 
``insolvency.'' 49 U.S.C. 13906(b)(6), (c)(7). Accordingly, to 
effectively implement this provision, the Agency needs to determine 
what ``financial failure'' or ``insolvency'' means. FMCSA has received 
public comments on these terms.
    In response to the 2014 financial responsibility ANPRM, Avalon 
indicated ``financial failure or insolvency'' should mean more than 
just ``bankruptcy or a total disappearance of the principal, but also 
include a clear pattern of unresolved claims in a sufficient volume to 
constitute a constructive financial failure.'' \20\ Avalon reiterated 
those statements in its pre-roundtable discussion comments and added 
that ``security providers should be allowed to respond in cases where 
there are three or more claims aggregating in excess of $25,000 which 
have remained unresolved for at least 30 days.'' \21\ SFAA, in its 
post-roundtable discussion letter, says a definition similar to 
Avalon's position is inadequate, as claims may not need to be paid.\22\ 
At the May 20, 2016, roundtable discussion, TIA said perhaps three or 
more claims aggregating to a certain amount could constitute a 
financial failure of the broker.\23\ The claims would have to remain 
unresolved for a certain amount of days. Avalon stated at the 
roundtable that financial failure could be established if ``X'' number 
of claims accrue in ``Y'' number of days.\24\
---------------------------------------------------------------------------

    \20\ Comments of Avalon Risk Management Insurance Agency LLC, 
Docket No. FMCSA-2014-0211-1675, at 8-9 (Feb. 25, 2015).
    \21\ Comments of Avalon Risk Management Insurance Agency LLC, 
Docket No. FMCSA-2016-0102-0014, at 6-7 (May 18, 2016).
    \22\ See Comments of The Surety & Fidelity Association of 
America, Docket No. FMCSA-2016-0102-0022, at 4 (June 7, 2016).
    \23\ See Broker and Freight Forwarder Financial Responsibility 
Roundtable Discussion Notes, Docket No. FMCSA-2016-0102-0030, at 4 
(Oct. 20, 2016).
    \24\ Id. at 7.
---------------------------------------------------------------------------

    The Agency is considering a definition of ``financial failure'' or 
``insolvency'' that would apply at a pre-bankruptcy stage. In this 
regard, a Bankruptcy Court case in the District of Delaware found that 
49 U.S.C. 13906(b)(6) did not apply to a broker's bond in a bankruptcy 
case.\25\ Consistent with this view, ``financial failure or 
insolvency'' under MAP-21 section 32918 would be established where the 
broker or freight forwarder has claims against its bond/trust, is not 
responding to notifications from the trust or surety provider within 14 
days, and is not in bankruptcy proceedings. FMCSA has suggested these 
criteria for ``financial failure or insolvency'' as commenters have 
suggested that unresolved claims are consistent with a broker's 
``financial failure or insolvency.'' Moreover, through interaction with 
stakeholders, FMCSA has learned that a broker's failure to respond to 
notices about claims from a surety or trust often indicates that the 
broker is out of business. At the same time, giving a broker or freight 
forwarder 14 days to respond to the surety or trust fund provider 
before a determination of ``financial failure'' is made would give the 
broker or freight forwarder an opportunity to respond if their 
nonresponse was based on a lack of communication or other short term 
issue, as opposed to a financial failure. In suggesting a definition of 
``financial failure or insolvency'' that applies outside of bankruptcy, 
FMCSA is also adopting the holding from the referenced AWI Delaware 
case. Moreover, given that Section 13906(b)(6) and (c)(7)'s ``financial 
failure or insolvency'' provisions require action by the surety or 
trust fund provider against the broker or freight forwarder's surety 
bond or trust fund, applying these provisions in bankruptcy could run 
afoul of the automatic stay provisions of bankruptcy law.
---------------------------------------------------------------------------

    \25\ AWI Delaware, Inc., et al., Case No. 14-12092 (KJC) (Bankr. 
D. Del. Nov. 25, 2014).
---------------------------------------------------------------------------

    Additionally, section 32918 requires that in the event of 
``financial failure'' or ``insolvency,'' surety providers must 
``publicly advertise'' for claims for 60

[[Page 48785]]

days beginning on the date FMCSA publishes the surety's notice to 
cancel the surety bond/trust. 49 U.S.C. 13906(b)(6)(B), (c)(7)(B). The 
Agency is considering a definition of ``publicly advertise'' that could 
be satisfied through FMCSA's posting of the cancellation notice on its 
website. The Agency is investigating whether it can flag such 
``financial failure'' cancellations with a special code, so that 
potential claimants reviewing a broker or freight forwarder's records 
on the FMCSA website will know that a 60-day period to make a claim has 
begun to run. The Agency seeks comments on how ``financial failure or 
insolvency'' and ``publicly advertise'' should be defined.
5. Enforcement Authority
    Under 49 U.S.C. 13906(b)(7), (c)(8), FMCSA has been granted 
expanded enforcement authority over surety providers. FMCSA has new 
civil penalty authority to suspend non-compliant surety providers from 
providing broker or freight forwarder financial responsibility for 
three years, and further authority to sue non-compliant surety 
providers in Federal court. FMCSA anticipates that it will revise its 
regulations to incorporate these new civil penalty provisions. It also 
intends to modify 49 CFR 387.317 (brokers) and 387.415 (freight 
forwarders) to incorporate the new surety suspension authority. The 
Agency expects to establish a procedure for such suspensions where it 
will issue an order to show cause against a non-compliant surety 
provider, weigh evidence submitted by the provider, and make a final 
decision. The Agency seeks input on the development of these surety 
suspension procedures.
6. Eligible BMC-85 Trust Funds
    FMCSA has broad authority under MAP-21 to determine who is eligible 
to provide trust fund services on behalf of brokers or freight 
forwarders. Under 49 U.S.C. 13906(b)(1)(A), a broker must file a surety 
bond or trust fund from a provider ``determined by the Secretary to be 
adequate to ensure financial responsibility.'' See also 49 U.S.C. 
13906(c)(1)(A) for freight forwarders. Under current regulations at 49 
CFR 387.307, a ``financial institution'' may file trust funds. In 
addition to other types of entities, ``loan or finance'' companies are 
considered financial institutions pursuant to 49 CFR 387.307(c)(7).
    Commenters have addressed the suitability of the ``loan or 
finance'' company category of ``financial institution.'' Avalon, in 
pre-roundtable discussion comments, indicated ``loan and finance'' 
companies are ``far less regulated if at all.'' \26\ It also indicated 
that ``FMCSA's refusal to deal with the regulatory gaps is an 
abrogation of its responsibility to state regulators who do nothing and 
don't care.'' \27\ Avalon proposed deleting the ``loan or finance 
company'' and the ``person subject to supervision by any State or 
Federal bank supervisory authority'' categories from the regulation. 
(49 CFR 387.307(c)(7) and (8)). Avalon asserted that ``these entities 
are not sufficiently regulated by the states to safeguard the public 
interest and the FMCSA has neither the staff nor the inclination to 
regulate them.'' \28\ JW Surety, in pre-roundtable discussion comments, 
stated that BMC-85 providers are ``operating unregulated by any 
government agency.'' \29\ In post-roundtable comments, it agreed with 
Avalon that Sec.  387.307(c)(7) and (8) should be eliminated.\30\ SFAA, 
in its post-roundtable comments, indicated that FMCSA could require 
that BMC-85 providers be licensed as trust companies by a State 
regulator.\31\ JW Surety, in post-meeting comments, argued that BMC-85 
providers should be licensed trust companies or FDIC-insured banks.\32\
---------------------------------------------------------------------------

    \26\ Comments of Avalon Risk Management Insurance Agency LLC, 
Docket No. FMCSA-2016-0102-0014, at 4 (May 18, 2016).
    \27\ Id. at 13.
    \28\ Id.
    \29\ Comments of JW Surety Bonds, Docket No. FMCSA-2016-0102-
0017, at 1 (May 19, 2016).
    \30\ See Comments of JW Surety Bonds, Docket No. FMCSA-2016-
0102-0025, at 9 (June 10, 2016).
    \31\ See Comments of The Surety & Fidelity Association of 
America, Docket No. FMCSA-2016-0102-0022, at 2 (June 7, 2016).
    \32\ See Comments of JW Surety Bonds, Docket No. FMCSA-2016-
0102-0025, at 5 (June 10, 2016).
---------------------------------------------------------------------------

    FMCSA is considering amending the definition of ``loan or finance 
company'' to ensure that BMC-85 providers' ability to pay claims out of 
trust funds is adequately monitored. FMCSA is considering defining 
``loan or finance company'' to include only companies regulated by 
entities that require certain minimum solvency standards. FMCSA intends 
to reach out to appropriate State regulators and professional 
associations as part of the rule development process.
    Given the Agency's primary safety focus, and consistent with its 
motor carrier financial responsibility regulations at 49 CFR 387.315, 
FMCSA must rely on other agencies to be the primary regulators of those 
who file financial responsibility instruments with FMCSA. In the case 
of BMC-84 surety providers, State insurance regulators and the United 
States Department of Treasury provide such regulatory oversight. The 
Agency is concerned, however, that 49 CFR 387.307(c)(7) currently 
allows entities that are not adequately regulated to administer trust 
funds. For example, the California Department of Business Oversight, 
which regulates several BMC-85 providers, provides a California Finance 
Lender license for a person engaged in the business of making consumer 
or commercial loans. Similarly, the Florida Office of Financial 
Regulation, which regulates a large BMC-85 provider, provides a 
Consumer Finance Company license for entities that solicit, make, and 
collect small loans. BMC-85 providers serve as trustees, not lenders. 
Accordingly, being regulated as a lender may not provide sufficient 
oversight for BMC-85 providers.
    Moreover, given that BMC-85 providers administer trusts on behalf 
of brokers or freight forwarders, the Agency is considering whether to 
require BMC-85 providers to be licensed as trust providers. We 
expressly invite comments in that regard to inform an NPRM.
7. BMC-84 and BMC-85 Form Revisions
    Surety bond providers file BMC-84 surety bonds with FMCSA as 
evidence of financial responsibility on behalf of brokers and freight 
forwarders. Trust fund providers similarly file BMC-85 trust funds with 
FMCSA. The Agency anticipates the need for revisions to the BMC-84 and 
BMC-85 forms if rulemaking is proposed. FMCSA invites comments to 
identify recommended changes to the forms. Changes to the BMC-84/85 
will be proposed in any NPRM and, as measures effecting an Agency 
information collection, will be approved through the Office of 
Management and Budget in accordance with the Paperwork Reduction Act.
8. Household Goods
    As part of its mission, FMCSA has jurisdiction over the 
transportation of household goods (HHG) and the arranging of HHG 
transportation.\33\ HHG transportation is significantly different than 
general property transportation. This is reflected in FMCSA 
regulations, such as 49 CFR part 375 (Transportation of Household Goods 
in Interstate Commerce; Consumer Protection Regulations) and 49 CFR 
part 371 subpart B (Special Rules for Household Goods Brokers), which 
treat HHG transportation differently than other

[[Page 48786]]

types of property transportation. Given those differences, FMCSA seeks 
information on whether HHG brokers and freight forwarders should be 
regulated differently than general property brokers and freight 
forwarders in a rulemaking on broker/freight forwarder financial 
responsibility. FMCSA notes that we have received complaints about HHG 
brokers,\34\ and we solicit comments to help determine whether there is 
a unique market structure that might suggest need for additional fraud 
protections.
---------------------------------------------------------------------------

    \33\ 49 U.S.C. 13501. HHG is a kind of property and is defined 
at 49 U.S.C. 13102(10). FMCSA has jurisdiction over HHG freight 
forwarder operations pursuant to 49 U.S.C. 13531.
    \34\ Through its National Consumer Complaint Database (NCCDB), 
in Fiscal Year 2017, the Agency received 626 valid HHG complaints 
regarding HHG broker activity, primarily ``low ball'' estimates, 
where the broker estimates an artificially low price that the 
delivering carrier does not honor.
---------------------------------------------------------------------------

    FMCSA is also seeking information on the payment flows among HHG 
shippers, brokers and motor carriers. The Agency is aware of 
arrangements where HHG shippers pay HHG brokers a deposit and then pay 
the remainder of the transportation charges directly to the HHG motor 
carrier. Under these arrangements, the Agency believes no monies pass 
directly between the broker and motor carrier. FMCSA seeks information 
on the prevailing payment models in the HHG broker industry in this 
ANPRM.

V. Rulemaking Analyses

A. Executive Order (E.O.) 12866 (Regulatory Planning and Review) and 
DOT Regulatory Policies and Procedures

    Under E.O. 12866, ``Regulatory Planning and Review'' (issued 
September 30, 1993, published October 4 at 58 FR 51735), as 
supplemented by E.O. 13563 and DOT policies and procedures, if a 
regulatory action is determined to be ``significant,'' it is subject to 
Office of Management and Budget (OMB) review. E.O. 12866 defines 
``significant regulatory action'' as one likely to result in a rule 
that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal governments or 
communities.
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency.
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof.
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the E.O.
    The Department has determined this ANPRM is a ``significant 
regulatory action'' under E.O. 12866, and significant under DOT 
regulatory policies and procedures due to significant public interest 
in the legal and policy issues addressed. Therefore, this document has 
been reviewed by OMB.

B. E.O. 13771 Reducing Regulation and Controlling Regulatory Costs

    E.O. 13771 (82 FR 9339, February 3, 2017), Reducing Regulation and 
Controlling Regulatory Costs, requires that for ``every one new [E.O. 
13771 regulatory action] issued, at least two prior regulations be 
identified for elimination, and that the cost of planned regulations be 
prudently managed and controlled through a budgeting process.'' 
Implementation guidance for E.O. 13771 issued by the Office of 
Management and Budget (OMB) (Memorandum M-17-21, April 5, 2017) defines 
two different types of E.O. 13771 actions: An E.O. 13771 deregulatory 
action, and an E.O. 13771 regulatory action.
    An E.O. 13771 deregulatory action is defined as ``an action that 
has been finalized and has total costs less than zero.''
    An E.O. 13771 regulatory action is defined as:
    (i) A significant action as defined in Section 3(f) of E.O. 12866 
that has been finalized, and that imposes total costs greater than 
zero; or
    (ii) a significant guidance document (e.g., significant 
interpretive guidance) reviewed by OIRA under the procedures of E.O. 
12866 that has been finalized and that imposes total costs greater than 
zero.
    The Agency action, in this case a rulemaking, must meet both the 
significance and the total cost criteria to be considered an E.O. 13771 
regulatory action. As the Department has determined this ANPRM is a 
``significant regulatory action'' under E.O. 12866, and significant 
under DOT regulatory policies and procedures due to significant public 
interest in the legal and policy issues addressed, it meets the 
significance criterion for being an E.O. 13771 regulatory action; 
however, the requirements of E.O. 13771 do not apply to pre-notice of 
proposed rulemakings such as ANPRMs.
    FMCSA specifically seeks comment on how the Agency should analyze 
various aspects of a possible NPRM in this proceeding and how the 
Agency could limit possible burdens on entities.

C. Small Business Regulatory and Enforcement Fairness Act

    FMCSA has not yet determined whether an Initial Regulatory 
Flexibility Analysis (IRFA) will be required for any of the eight 
enumerated alternatives listed above. However, if an IRFA is required, 
FMCSA is considering holding one or more Small Business Regulatory 
Panels. If you are a small business who would like to be included in 
such a panel, please submit a comment indicating as such. The Agency 
also seeks comment on the small business impacts of the Agency's 
suggested courses of action in this ANPRM.

VI. Comments Sought

    The Agency specifically seeks comments and data from the public in 
response to this ANPRM. We request that commenters address their 
comments specifically to the enumerated list of issues below, and that 
commenters number their comments to correspond to each issue. FMCSA 
anticipates some of the information and data sought may include CBI, 
and these comments should be filed in accordance with the requirements 
of 49 CFR 389.9 Treatment of confidential business information and the 
instructions above under the subheading Confidential Business 
Information under the headings ADDRESSES and Public Participation and 
Request for Comments.
    1. FMCSA specifically seeks comment on the definition of ``group 
surety bond'' or ``group trust fund'' and how the Agency could 
administer such a group surety or trust option given its limited 
resources.
    2. The Agency solicits suggestions from the trust fund industry and 
others about instruments the Agency could accept that would meet the 
``assets readily available'' standard without requiring significant 
FMCSA oversight or evaluation that would divert scarce safety oversight 
resources.
    3. The Agency specifically seeks comment from the surety bond 
industry on that industry's capacity to meet the increased market 
demand if FMCSA were to adopt a cash-only standard for BMC-85 trust 
funds, which could potentially drive a significant segment of the 
broker/forwarder industry into surety bond coverage.
    4. FMCSA seeks comment and data from the surety bond industry on 
the cost to brokers and freight forwarders of BMC-84 surety bonds.
    5. The Agency will consider how it could ``immediately suspend'' 
broker/freight forwarder operating authority registration in a manner 
that is

[[Page 48787]]

consistent with constitutional due process requirements, e.g., by 
providing an appropriate opportunity for post-deprivation review. FMCSA 
invites comments responsive to this issue, including documented 
incidence of actual nonpayment that occurred after problem brokers or 
freight forwarder were not ``immediately'' suspended.
    6. FMCSA seeks comment on the appropriate cushion time for brokers 
or freight forwarders to respond to claims made to the guarantors, 
valid or otherwise. Such a grace period would seem to give firms 
adequate time to adjudicate claims and settlements internally, as well 
as price in the costs associated with any claims relating to contract 
noncompliance.
    7. The Agency seeks comments on the how ``financial failure or 
insolvency'' and ``publicly advertise'' should be defined under MAP-21 
Section 32918.
    8. The Agency seeks input on the development of surety suspension 
procedures authorized pursuant to 49 U.S.C. 13906(b)(7) and (c)(8).
    9. The Agency requests comments regarding whether FMCSA should 
require BMC-85 trust fund providers to be licensed as trust providers 
and how 49 CFR 387.307(c)(7) (loan or finance company) could be amended 
to ensure that adequate monitoring of BMC-85 providers' ability to pay 
claims is taking place.
    10. The Agency anticipates the need for revisions to the BMC-84 and 
BMC-85 forms if rulemaking is proposed. FMCSA requests comments to 
identify suggested changes to the forms.
    11. FMCSA seeks information on whether HHG brokers and freight 
forwarders should be regulated differently than general property 
brokers and freight forwarders in a rulemaking on broker/freight 
forwarder financial responsibility.
    12. FMCSA solicits comments to help determine whether there is a 
unique market structure in the HHG broker market that might suggest the 
need for additional fraud protections for shippers utilizing HHG 
brokers.
    13. FMCSA seeks information on the prevailing payment models and 
payment flows among HHG shippers, motor carriers and brokers.
    14. While noting the MAP-21 requirements, FMCSA is seeking comment 
on whether the market is capable of addressing these issues. For 
example, if a broker/freight forwarder has a history of noncompliance 
with contracts, would surety/trust firms be less likely to back them or 
charge a higher premium/trust management fee? Is there a market failure 
that is preventing these transactions from taking place efficiently?
    15. FMCSA specifically seeks comment on how the Agency should 
analyze various requirements for a possible NPRM to meet the 
requirements of E.O. 12866 and 13771, and how the Agency could limit 
possible burdens on regulated entities.
    16. FMCSA requests comments on any other aspects of implementing 
section 32918 that may be necessary and how these areas could be 
implemented in a way that would not divert scarce safety oversight 
resources.
    17. FMCSA requests comment on the small business impacts of its 
suggested courses of action in this ANPRM.

    Issued under the authority of delegation in 49 CFR 1.87: 
September 21, 2018.
Raymond P. Martinez,
Administrator.
[FR Doc. 2018-21052 Filed 9-26-18; 8:45 am]
 BILLING CODE 4910-EX-P