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FMCSA to extend broker-dealer financial compliance deadline

Pabio November 2, 2024

WASHINGTON — Three major provisions of a rule intended to protect trucking companies from unpaid broker claims will have to be pushed back a year because of a delay in obtaining a new online registration system operational.

The rule “Financial responsibility of the broker and forwarder” which came into force in Januarycontained five provisions: two had a compliance deadline of January 16, 2026 and three had a compliance deadline of January 16, 2025.

But because the new registration system is not expected to be available until January 16, 2025, the Federal Motor Carrier Safety Administration will need to extend the compliance date for the first three provisions to meet the January 16, 2026 compliance date. » give entities time to begin using and becoming familiar with the system before compliance is required,” according to an opinion released by FMCSA Friday.

The new registration system is expected to be ready by 2025.

“This action is proposed because FMCSA has determined that only its upcoming online registration system will be used to accept filings and track notifications, and this functionality will not be added to its existing systems,” the notice states.

The FMCSA gave the public 15 days to comment on the change.

The compliance deadlines pushed back by this extension are:

Immediate suspension of operating authority of the broker/forwarder. When a broker or forwarder’s available financial security falls below $75,000, the FMCSA will suspend its registration as an operating authority.
Surety or fiduciary responsibilities in the event of financial bankruptcy or insolvency of a broker or forwarder. If a surety/trustee becomes aware that a broker or forwarder is financially bankrupt or insolvent, it must notify the FMCSA and initiate release of financial liability.
Enforcement authority and sanctions for financial accountability providers who fail to comply with regulations. After notification and an opportunity for a hearing, surety companies or financial institutions that violate the regulations will not be able to assume financial responsibility for three years and may be subject to a civil penalty.

The two 2026 provisions, which relate to broker/forwarder trust funds, are not affected by the change in compliance date.

Although the regulation provides protections to motor carriers, brokers and freight forwarders also benefit from the rule.

The Transportation Intermediaries Association petitioned the FMCSA 10 years ago for some changes to combat widespread freight fraud in the trucking and freight brokerage industry.

“This is a big step forward in combating potential financial fraud and ensuring funds are available to protect motor carriers and brokers,” the TIA said last year.

Click for more FreightWaves articles by John Gallagher.