Last year, the U.S. Department of Transportation unveiled its long-term transportation bill, entitled the Grow America Act, which contained the Department’s wish list for funding and new authorities. On March 31, 2015, the Department submitted a similar bill, also called the Grow America Act, which builds upon its prior proposal. The bill includes a number of proposals related to the National Highway Traffic Safety Administration. While several provisions are the same or similar to the previous proposal, there are some differences that demonstrate NHTSA is prioritizing detecting and notifying consumers of defects and improving the recall process.
Similar to the previous bill, this year’s bill proposes to:
The latest version of Grow America adds the following proposals:
NHTSA’s wish list of proposals dovetails the agency’s high profile enforcement actions of the last year, which included a $35 million civil penalty settlement related to GM’s highly-publicized ignition switch recall, as well as several other civil penalty settlements with vehicle and equipment manufacturers ranging from $1.75 million to $70 million to resolve a variety of alleged violations. NHTSA and the Department have repeatedly stated that the current civil penalty cap is too low and, as noted above, they are urging Congress to dramatically increase it.
In addition to the record setting penalties, the agency broke from its past practice of entering into simple settlement agreements that only required payment of the civil penalty and instead entered into consent orders, which permit additional oversight from the agency. The heightened oversight included requiring third-party audits of the companies policies and procedures, agency review and feedback on new policies, regular reports to the agency of potential safety issues prior to the manufacturer making its defect determination, waiver of confidentiality claims on reports submitted to the agency, and, in the most recent example, requiring a manufacturer to spend at least $7 million on safety programs that seek to increase the rate of recalled products that receive the free remedy.
Comparing the new authorities sought by the agency to its recent enforcement actions paints a clear picture that NHTSA’s current enforcement and regulatory priorities are focused on ensuring: (1) compliance with EWR and other reporting requirements, (2) timely reporting of defects, and (3) more effective implementation of recall campaigns. Due to the potential impact these proposed provisions would have on the industry, manufacturers, dealers and rental car companies would be wise to follow the bill very closely.