The updated Federal Motor Carrier Safety Administration (FMCSA) financial responsibility requirements will take effect on January 16, 2026, and property brokers and domestic freight forwarders must be ready to comply. The FMCSA is implementing these changes to safeguard motor carriers and shippers by ensuring adequate funds are available to pay unpaid freight charges.
Currently, as a part of MAP-21, brokers and forwarders are required to provide financial security in the form of a $75,000 bond (BMC-84) or a $75,000 trust fund (BMC-85).
The updated FMCSA regulations include these three important components:
- Minimum Bond/Trust Amount: The required financial security of $75,000 must be fully maintained. If a drawdown causes a broker’s available financial security to fall below the $75,000, the FMCSA will provide notice that they have seven days to replenish the surety bond or trust, otherwise operating authority will be suspended.
A drawdown to the available security may occur due to the following:
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- The broker consents to the claim and the surety/trust provider pays the claim.
- The broker fails to respond to a valid notice of claim and surety/trust provider determines that the claim is valid.
- The claim is not resolved and is converted into a judgement against the broker.
Due to this tight timeline and the risk of authority suspension, it is essential that brokers respond promptly to surety/trust providers on all claims correspondence.
- Trust Fund Compliance: Trust assets must be fully funded with cash, U.S. Treasury Bonds, or FDIC-backed letters of credit. Loan and finance companies are no longer considered eligible trust providers. The trust assets must be readily available to be liquidated into cash within seven calendar days.
- Surety/Trust Responsibilities for Broker Financial Failure: If a surety/trust provider becomes aware that a broker is experiencing financial failure or insolvency, they must notify the FMCSA and initiate cancellation on the bond/trust. The FMCSA defines “financial failure or insolvency” as any payment made or other default not cured within seven days, or if the bond/trust anticipates payments after aggravating multiple claims. This seven-day notification timeframe imposed on sureties/trusts makes it crucial for brokers to respond immediately to claims inquiries.
How Should Brokers and Freight Forwarders Prepare?
- Verify that your surety/trust provider has up-to-date contact information for your internal claims representative.
- Promptly review and acknowledge claims submissions.
- Provide a detailed written response to the claim within seven days.
- Review current internal procedures for claims response, payment timelines, and proper documentation. Update if necessary to ensure compliance.
- Consider obtaining a bond/trust in excess of the minimum $75,000. This safeguards against your financial security falling under the $75,000 minimum if claims reduce the limit.
Fraud continues to remain a significant challenge for the industry. To help minimize fraud risk, we have compiled a list of fraud prevention tips and recommendations. In addition, our experienced claims team regularly works with brokers to uncover facts with claims that may involve fraudulent activity, especially on incidents involving loads that did not originate from any authorized company representative.
With these new FMCSA regulations requiring faster turnaround times, timely responses are critical to avoid erroneous bond/trust payments, bond/trust termination, and required notifications to the FMCSA which could result in revocation of broker authority.
FMCSA Moving to DOT Numbers
Earlier this year, the FMCSA proposed using DOT numbers as the sole identifier for all FMCSA registrants under its Registration Modernization initiative. However, in response to feedback from industry stakeholders the FMCSA has stated, “the first release of the new registration system will not include the implementation of Safety Registration, the elimination of MC/FF Numbers, or changes to the BOC-3 filing process.”
At this time, current processes remain in place. We will continue to monitor developments and provide updates as new information becomes available.
If you have any questions about any of these updates, please contact your Avalon representative.
