With FMCSA’s recent activation of “MOTUS,” the public (including Motor Carriers) should now be able to use it to research whether the license of a property Broker or surface Freight Forwarder is active, cancelled or subject to cancellation due to “financial failure or insolvency,” before accepting tender of a load of property for motor truck transportation.
MOTUS is FMCSA’s new registration system which, when completely implemented, will be the unified registration system for regulated entities and their sureties (among others); replacing the legacy Unified Registration System.
This post summarizes the changes to broker/freight forwarder financial responsibility, explaining the rationale behind it – to ostensibly better protect Motor Carriers and Shippers from contract defaults resulting in claims arising out of transportation operations subject to FMCSA’s jurisdiction for property Broker or Freight Forwarder non-payment of freight charges – the grounds and timeline for cancelling a license – the meaning of “assets readily available,” – and jurisdiction to suspend surety operations as a sanction for their non-compliance.
In the run up to MOTUS, FMCSA promulgated a long-awaited set of regulations to implement and enforce uniform limits and sanctions to the financial security and responsibility requirements for property Brokers, surface Freight Forwarders and their sureties.[1] That rulemaking was undertaken because of a Congressionally mandated federal transportation law enacted in 2012 as part of the Moving Ahead for Progress in the 21st Century Act (MAP-21).
The Final Rule’s amendments to existing Broker and Freight Forwarder regulations and addition of new regulations are intended to better protect Motor Carriers and Shippers from contract defaults by making payments arising out of transportation operations subject to FMCSA’s jurisdiction where the property Broker or Freight Forwarder does not pay freight charges resulting in claims made against the surety.
Significance of Registration
A Broker for the transportation of property or surface Freight Forwarder must be registered with FMCSA and in connection with such registration, must have a surety bond or trust fund containing assets aggregating to $75,000 in effect at all times to be in compliance with the financial security requirements.
The Final Rule did not change (nor could it) the statutory authorization limiting the financial security of $75,000 to the licensee, regardless of the licensee’s number of branch offices or sales agents.
The Problem to Be Solved – Asymmetry of Information
The Final Rule’s objective is to reduce fraud by limiting the time transportation intermediaries can continue to accrue claims while experiencing financial failure, insolvency or after drawdown of the security before their operating authority registration is suspended due to cancellation of the financial security filing or drawdown below the minimum security limit. It effectuates the desire of Congress to expeditiously suspend those regulated entities who are accruing claims against their surety bonds or trust funds.
FMCSA frames the problem as the ability of a relatively small number of unscrupulous transportation intermediaries’ duping Motor Carriers into accepting loads resulting in non-payment claims (what an independent driver organization characterize as “stealing transportation services”) because of “information asymmetry” in Broker and Motor Carrier transactions – a regulatory void which the Final Rule aims to correct.
By withholding payment from the Motor Carrier for services rendered, the transportation intermediary leaves the Motor Carrier with the cost of moving the freight (e.g., fuel, maintenance, insurance, etc.). A Motor Carrier is not able to ascertain in advance if the transportation intermediary will be likely to uphold the terms of the transportation agreement or retain payment from the Shipper instead of passing the agreed fee on to the Motor Carrier. It is this “asymmetric information” leading to a significant cost burden for Motor Carriers that the Final Rule is said to address.
A critical piece of FMCSA’s plan to solve the problem is to stand up a new nimble information management information system.
Using MOTUS, surety and trust fund providers (collectively referred to hereafter as the “Financial Providers”) must timely submit by electronic means, claim data, notice of a drawdown on a bond or trust fund and notice of insolvency or financial failure, among other data submissions through portal accounts the Financial Providers claimed through Login.gov and MOTUS. [2] The notices will automatically alert FMCSA and trigger the system to issue a letter to the Broker/Freight Forwarder summarizing requirements that must be met to maintain operating authority registration.
FMCSA expects this new technology will result in efficient exchanges of information between Motor Carriers, Brokers, Freight Forwarders, their Financial Providers and FMCSA, thereby reducing the information asymmetry concerns, and closing the window during which transportation intermediaries can run up claims.
What follows is a summary of some of the more significant aspects of the Final Rule. The reader is cautioned that when it comes to applicability of the financial security and responsibility law over regulated entities such as Property Brokers and Freight Forwarders, there is no substitute for a review of the statute – in this case 49 U.S.C. § 13906 – and related rules governing such operations.[3]
“Immediate” Suspension of Broker/Freight Forwarder Operating Authority After Notice
Summary of new process –
Step 1: Within two (2) business days of any of the events that follow, the Financial Provider is required to notify FMCSA through MOTUS when:
| ⇒ | It pays a claim with the consent of the Property Broker/Freight Forwarder, causing the surety bond or trust fund to fall below $75,000; |
| ⇒ | It pays a claim after the Property Broker/Freight Forwarder does not respond within seven (7) business days to the Financial Provider’s adequate notification to it of a claim, causing the surety bond or trust fund to fall below $75,000; |
| ⇒ | It pays a claim because of a judgment against the Property Broker/Freight Forwarder, causing the surety bond or trust fund to fall below $75,000; or |
| ⇒ | It determines that the Property Broker/Freight Forwarder has experienced financial failure or insolvency because the Financial Provider will be required to pay one or more claims resulting in the surety bond or trust fund to fall below $75,000, after having notified the Property Broker/Freight Forwarder of such claim(s) and provided seven (7) business days to respond and the Property Broker/Freight Forwarder has failed to respond, or provides a response which the Financial Provider is unmoved because it “nevertheless” determines that the claim is legitimate and expects to make one or more payments on the pending claim(s). |
Step 2: FMCSA required to notify the Property Broker/Freight Forwarder in writing that its license will be suspended within seven (7) business days from the date of the notice, unless it provides written notice to FMCSA that: (1) the notice was erroneously sent; (2) the surety bond or trust fund has been restored to $75,000; or (3) that the pending claims have been satisfied without the use of the surety bond or trust fund assets.
Step 3: If the Property Broker/Freight Forwarder fails to respond to the FMCSA’s notice within seven (7) business days, FMCSA will enter a suspension of the Broker/Freight Forwarder’s operating authority in MOTUS and will provide a second written notice to the Broker/Freight Forwarder that the suspension is in effect.
After suspension, a Broker/Freight Forwarder’s recourse will be to request FMCSA to lift it by providing written evidence to substantiate the lifting on the same grounds stated in Step 2.[4]
Cancellation of Surety or Trust Financial Responsibility in Case of Broker/Freight Forwarder Financial Failure or Insolvency
In a reversal from what FMCSA proposed in the run up to the Final Rule, FMCSA removed Federal bankruptcy filing pursuant to Title 11 of the United States Code or a filing related to the Broker/Freight Forwarder under an insolvency or similar proceeding under State law as a predicate fact the Financial Provider may cite as the basis for claiming “financial failure or insolvency” of its Broker or Freight Forwarder client to initiate cancellation of the BMC-84/85. The Final Rule explicitly states that a filing pursuant to Title 11 of the United States Code does not constitute financial failure or insolvency.
Under the Final Rule, the Financial Provider, in its discretion, will have flexibility to exercise their “judgment and expertise” in making a determination that the Broker/Freight Forwarder has experienced financial failure or insolvency.
The Final Rule provides the Financial Provider may cite financial failure or insolvency of the Broker/Freight Forwarder as grounds for cancellation of a Form BMC-84 surety bond or BMC-85 trust agreement when it either makes a payment against the bond or trust fund that is not cured because the Broker/Freight Forwarder fails to timely reply to FMCSA’s notice of suspension with written evidence the notice was sent in error, or surety bond or trust fund has been restored to $75,000, or pending claims have been satisfied without the use of surety bond or trust fund assets and FMCSA has entered a suspension of the Broker/Freight Forwarder’s authority and provided written notice of same to Broker/Freight Forwarder that the suspension is in effect. Alternatively, the Financial Provider may cite financial failure or insolvency of the Broker/Freight Forwarder as grounds for cancellation of a Form BMC-84 surety bond or BMC-85 trust agreement when it expects to make a required payment after aggregating multiple claims.
Enforcement Authority Over Surety Company or Trust Fund Providers
After notice to the Financial Provider and opportunity to reply and contest the proposed action, FMCSA may suspend a Financial Provider for three (3) years and impose civil monetary penalties for violations of the new regulations and statutory requirements. Suspending a Financial Provider under this enforcement authority means the entity is no longer authorized to serve as a surety company or financial institution for Broker/Freight Forwarders and as such, is ineligible to have its instruments (i.e., BMC-84 or BMC-85) filed with the FMCSA as evidence of financial responsibility.
Assets Readily Available Limited to Cash, Irrevocable Letters of Credit or U.S. Treasury Bonds
In a reversal from what FMCSA proposed in the ru nup to the Final Rule, assets deemed readily available to pay claims without resort to personal guarantees or collection of pledged accounts receivable must be assets aggregating to $75,000, can be liquidated to cash within 7 calendar days and consist of cash, irrevocable letters of credit (ILC) issued by a Federally insured (FDIC or NCUA) depository institution, or U. S. Treasury bonds. FMCSA had proposed enumerating prohibited asset types based on lack of liquidity, but backtracked because imposition of undue administrative burdens on the FMCSA to monitor for sufficiency and would divert resources from the FMCSA’s primary mission of safety oversight. FMCSA explained in making the change, the Broker/Freight Forwarders may find it easier to comply where the specific asset types are deemed acceptable.
Entities Eligible to Provide Trust Funds for Form BMC-85 Trust Fund Filings
Loan and finance companies have been removed from list of financial institutions able offer Broker/Freight Forwarder financial responsibility services and will be ineligible to make BMC-85 trust fund agreement filings with the FMCSA. FMCSA concluded that financial institutions can only be highly regulated depository institutions, insurance companies, or equivalent entities. Because assets readily available are limited to cash, ILC issued by Federally insured depository institutions and U.S. Treasury bonds, FMCSA believes loan and finance companies would be unlikely to be able to comply with these regulatory requirements and as such, to permit companies not part of highly regulated industries to administer BMC-85 trusts would be incompatible with MAP-21s requirement that the trust fund consist of assets readily available to pay claims without resort to personal guarantees or collection of pledged accounts receivable.
Dated: Sudbury, MA
July 29, 2026
Andresen & Borovick, LLP
323 Boston Post Road
Sudbury, Massachusetts 01776
www.abmasslaw.com
Tel: (978) 443-6868
The foregoing is designed to provide general information based on a summary of legal principles for clients and friends of the firm. It is not intended to be construed as legal advice, or legal opinion on any specific facts or circumstances. Companies and individuals should consult with legal counsel before taking any action based on these principles to ensure their applicability in a given situation. The information presented here and on our website should not be construed to be legal advice or the formation of a lawyer/client relationship. Copyright © 2026 Andresen & Borovick, LLP. All rights reserved.
[1] See In Matter Broker and Freight Forwarder Financial Responsibility, Dock. No. FMCSA-2016-0102-0436 (Final Rule), 88 Federal Register 78656 (Nov. 16, 2023) (Final Rule).
[2] In Matter Availability of Motus, FMCSA’s New Registration System, Dock. No. FMCSA-2026-1255-0001 (Notice of policy regarding use of Motus, FMCSA’s new registration system), 91 Fed. Reg. 23,144, 23,147 (Apr. 29, 2026) (advising “[a]ll entities currently required to use [the legacy] URS to complete their initial registration . . . will be required to use Motus as Motus will become the unified registration system and the current URS will be disabled.”).
[3] For example, reading the Federal regulations governing surety bonds or trust funds of Brokers (including the new obligations, restrictions and limitations in the Final Rule), the uniformed reader would not know that such rules (and revisions as finalized in the broker/freight forwarder financial responsibility rulemaking) apply equally to Freight Forwarders subject to the DOT’s jurisdiction. This is because the financial security rule covering Freight Forwarders incorporates the Broker rule by reference.
[4] FMCSA corrected the “immediate suspension” provision in 49 CFR 387.307 as promulgated in the Final Rule by removing the mis-cites to nonexistent sub-provisions in the rule’s standards a Financial Provider is to take prior to pulling the trigger on the Broker/Freight Forwarder by making the determination that their client is experiencing “financial failure or insolvency” requiring notice to FMCSA. With the correction, FMCSA has cleared up confusion on the steps a Financial Provider is required to take to substantiate their determinations. See In Matter General Technical, Organizational, Conforming, and Correcting Amendments to the Federal Motor Carrier Safety Regulations, (Final Rule), published in 91 Fed. Reg. 45,653, 45,655, 45,661 (Jul. 21, 2026).