Transportation Executive Summary: FMCSA Announces Final Rules for Brokers and Freight Forward Financial Responsibility

01.22.2024

Previously, we had reported that the FMCSA had undertaken rule making with respect to certain financial obligations of brokers and freight forwarders. Link to previous article.

In November, 2023, the FMCSA issued its final rules which are available here. 

The final rules may be summarized as follows. 

• Assets Readily Available – Final rule sets out a list of the acceptable asset types a MBC-85 trust may contain. The rationale behind the asset types: they are stable in value and can be easily liquidated within 7 calendar days of an event that triggers a payment from the trust. Compliance with this provision will be required on January 16, 2026.
• Immediate Suspension of Broker/Freight Forwarder Operating Authority – Final rule states when a broker or freight forwarder’s available financial security falls below $75,000, FMCSA may suspend its operating authority. The “available financial security” may fall below $75,000 because of a consensual drawdown, a failure to respond to a valid notice of claim from surety/trust provider, or if a claim against the broker/freight forwarder is converted to a judgement. The broker/freight forwarder needs to replenish funds within 7 calendar days of a notice from the FMCSA to avoid suspension. Compliance for this provision will be required on January 16, 2025.
• Surety or trust responsibilities in case of broker/freight forwarder financial failure or insolvency - final rule requires that if surety/trustee becomes aware that a broker/freight forwarder is experiencing financial failure or insolvency, it must notify FMSCSA and initiate cancelation of the financial responsibility. If the broker/freight forwarder default is cured and the surety company reinstates the bond or the broker/freight forwarder gets a new bond, FMCSA will lift the suspension notice. Compliance for this provision will be required on January 16, 2025.
• Enforcement Authority – Final rule has the FMCSA implementing the requirement in the MAP-21 Act for suspension of a surety or trust fund provider’s authority in certain circumstances. The Agency will first post notice of the suspension to surety/trust fund provider and give 30 calendar days for the surety or trust fund provider to respond before a final decision is issued. Compliance for this provision will be required on January 16, 2025.
• Entities Eligible to Provide Trust Funds for BMC-85 Filings – Final rule provides that the FMCSA has removed loan and finance companies from the eligible providers list because that type of institution is not subject to the same rigorous federal regulations applied to chartered depository institutions or to state regulations applied to insurance companies. Compliance for this provision will be required on January 16, 2026.

For more information

For more information on trucking and transportation matters, contact John F. Fatino at (515) 288-6041. Nathan Britton, associate attorney, assisted in the preparation of these materials.