AR-Judges Ban Credit Bonds, Use 10% Bonds

The issue of credit bonding has been ongoing discussion in Arkansas for several years. Yesterday, the Arkansas Democrat Gazette reported that the issue has now prompted a federal lawsuit and crippled the Saline County bail bond businesses.

Every judge in Saline County signed a court order earlier this year banning credit bonding. Then earlier this month, the sheriff's office began collecting 10% cash-bonds, (called sheriff’s bonds). The 10% bonds provide a new revenue source for the county because Arkansas law allows the county to keep 10% of the amount collected as a processing fee.

Bondsman John Chism has filed the federal lawsuit against every judge in the county, the prosecutor, the sheriff and the jail chief, saying the ban and the use of sheriff's bonds on felony cases have effectively stripped his company of its license without due process, resulting in a civil-rights violation.

Financing the bail bond premium has long divided bail-bond companies and the legal community. Judges, lawmen and prosecutors often argue that suspects charged with serious crimes are sprung from jail after paying too little. There is also debate about whether state law forbids credit bonding. Arkansas law says the "premium or compensation for giving bond or depositing money or real property as bail on any bond shall be ten percent (10%), except that the amount may be rounded up to the nearest five dollar amount." The law is silent on when the premium is required to be collected.

Upset by financed premium, Pulaski County deputy prosecutor Barbara Mariani subpoenaed records to find out how three particular defendants got out of jail despite hefty bails. In 2006, a convicted killer awaiting trial on a new murder charge was freed on a $250,000 bond. She wondered how Armon Houston, who was assigned a public defender after claiming he was indigent, came up with $25,000 - the 10 percent premium. Mariani learned Houston was freed after someone posted just $3,000 bond. Records didn't indicate that the remaining $22,000 was ever paid, Mariani said. "There's no contract, no monthly payments," she said about the bail-bond records she's reviewed. So even though some companies say they are arranging financing, they appear to be just discounting the bond. That's illegal, Mariani said. This issue has prompted Mariani to ask judges on more serious cases to require the full 10 percent premium upfront.