Auto Recall Fines Would Increase to $300 Million Under Obama Administration Proposal | Edmunds

Auto Recall Fines Would Increase to $300 Million Under Obama Administration Proposal


Just the Facts:
  • The Obama administration sent a bill to Congress on Tuesday that would increase to $300 million from $35 million the civil penalties that the National Highway Traffic Safety Administration can levy against automakers who fail to act promptly on vehicle recalls.
  • The proposal also provides the authority for NHTSA to require rental-car companies to participate in recalls of defective and unsafe vehicles.
  • It also would require automakers to "expeditiously remove automobiles from the market when a defect is first discovered."

WASHINGTON The Obama administration sent a bill to Congress on Tuesday that would increase to $300 million from $35 million the civil penalties that the National Highway Traffic Safety Administration can levy against automakers who fail to act promptly on vehicle recalls.

The proposal also provides the authority for NHTSA to require rental-car companies to participate in recalls of defective and unsafe vehicles.

It also would require automakers to "expeditiously remove automobiles from the market when a defect is first discovered."

"The Grow America Act will expand authority to protect the public from automobile defects," said the U.S. Department of Transportation in a statement on its Web site. "The Grow America Act will strengthen safety regulators' ability to hold automobile manufacturers accountable for defects that can cost lives."

The proposal is seen as a response to the General Motors recall of 2.6 million cars for defective ignition switches. NHTSA is investigating why GM waited until February to recall the cars, when it initially learned of the defect more than 10 years ago. At least 13 deaths have been linked to the GM recall. Under the law, automakers have five days to recall vehicles after determining they pose an unreasonable risk to driver safety.

"Automobile defects generate hundreds of investigations each year, but delay in disclosing defects and initiating recalls have cost lives," the proposal said.

Edmunds says: Stiffer fines may mean speedier vehicle recalls.

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