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Congress Asked to Octuple Fine for Late Recalls

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On: Thu, May 1, 2014 at 1:09PM | By: Karen Cook

Congress Asked to Octuple Fine for Late Recalls

There is new legislation afoot which has been put forth by Transportation Secretary Anthony Foxx. He is asking Congress to raise the maximum civil fine for violating United States auto safety laws to $300 million. That’s an 800% increase; Foxx hopes this would be a deterrent to future problems like the recent GM recall debacle.

The increase is part of a $302 billion four-year package aimed at replacing the depleted funds in the federal Highway Trust Fund, which provides money for things like bridge repairs, underground storage tanks, and mass transit (the mass transit division is actually in surplus at this time). The fund has seen a shortfall in revenue through gasoline taxes because of drivers are using less fuel.

The civil penalty cap was doubled to $35 million not too long ago in the wake of Toyota’s sticky accelerator pedals and the Obama administration wanted to raise it further to $200 million. This never happened due to a huge resistance from the auto industry. The National Highway Safety Administration collected $35 million in total fines for the 2013 fiscal year which included $17.5 million from Ford last June. That was the highest fine imposed to that date.

The chances of the proposal being approved are uncertain. Republicans in the House are largely against it as they do not want to raise taxes. Auto safety advocates are for it because it would prompt quicker attention to potentially dangerous defects in the cars we buy. In the midst of all the GM hoopla, automakers, as a body, are issuing recalls more quickly than in the past, and they do not support the plan, seeing it as unnecessary.

Surprisingly there is also wording in the proposal that prevents rental companies and dealerships from renting or lending vehicles which have been recalled and have not had the repairs done. This seems to be a logical extension without having to specifically point it out. The fact that it has been directly referred to gives me a little less confidence in the auto industry as a whole.


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