The bail-bond industry is under pressure as more states move to wipe out cash bail and financial firms look for an exit from a controversial profit center in the criminal-justice system, the Wall Street Journal reports. Private-equity firm Endeavour Capital sold its stake in California-based Aladdin Bail Bonds, one of the largest bail-bond providers. The move came after Endeavour and its investors faced pressure from the American Civil Liberties Union and others who say bail discriminates against minorities and low-income defendants. Other major financial firms have abandoned the bail-bond industry, amid falling revenues, criticism from activists and an uncertain political environment.
Tokio Marine HCC, a Houston-based insurance company owned by Japan’s Tokio Marine Holdings Inc., is selling Bail USA Inc., a bail-bond underwriter, and no longer providing insurance for bail-bond companies. The decisions to exit bail-bond companies come as the industry is in decline. Bail bonds overall fell 10 percent to just over $14 billion in 2018, according to insurance-ratings firm A.M. Best Co. From 2009 through 2016 the industry grew by about 25 percent, then had two straight years of declines. The most serious pressure on the industry has been changes to local laws governing pretrial releases. More than 20 states and many counties have largely eliminated cash bail for low level and nonviolent offenders. Experts said the industry’s gradual decline could become a free fall if a law passed in 2018 goes into effect in California. The state is by far the industry’s largest market, accounting for one-quarter of the industry’s revenue, says the American Bail Coalition, a trade association.