Senior Reporter
FMCSA Seeks Feedback on Trust Fund Practices
FMCSA said that “various parties” have filed numerous complaints pertaining to BMC-85 trust fund providers, and that “multiple entities” have sought guidance from the agency, particularly regarding procedures to be followed in connection with the insolvency or financial failure of a broker, FMCSA said.
BMC-85 trust agreements are those in which a financial institution guarantees at least $75,000 worth of collateral posted to the government that can be used to satisfy damage or other claims by shippers or motor carriers.
“The Agency seeks information from motor carriers and shippers that have experienced challenges receiving compensation for claims against freight forwarders and brokers due to insufficient funds,” said an announcement that was scheduled for publication in the Federal Register on April 27.
The roundtable meeting will be public, and individuals with diverse experience, expertise and perspectives on the issues are encouraged to attend, FMCSA said.
Brokers or freight forwarders are required to have either a surety bond or BMC-85 trust fund agreement on file with the agency as a condition of obtaining FMCSA operating authority.
The announcement said FMCSA is seeking to ensure that shippers and motor carriers can collect on the required broker/freight forwarder financial instruments.
The agency said the roundtable discussion will not pertain to increasing motor carrier, broker or freight forwarder minimum financial responsibility limits.
Instead, it will focus on federal requirements for financial institutions, and the underlying instruments they issue for use by brokers and freight forwarders submitting BMC-85 trust agreements to satisfy FMCSA’s financial responsibility rules.
The questions on which the agency is seeking comment include:
•Which, if any, BMC-85 trust fund holders routinely deny claims made by shippers and motor carriers against those trust funds?
•What is the nature of the assets that are being held in BMC-85 trust funds and what is the most desirable composition of the assets?
•What actions can FMCSA take to ensure that motor carriers and shippers are able to collect on BMC-85 trust funds where legitimate claims are filed with the financial institution?
