Senate Passes Bill Tripling Potential Automaker Fines to $105M

The U.S. Senate passed legislation that will triple the maximum fines automakers pay for violations of motor-vehicle safety laws yet bypassed other measures sought by consumer groups.

The new $105 million cap was part of a six-year surface transportation policy bill the Senate voted on Thursday. The measure also prohibits the rental of cars with unrepaired safety defects and proposes that dealers run a recall check when customers come in for routine service.

Senator John Thune, the Republican chairman of the Senate Commerce, Science and Transportation Committee, said the bill would advance auto safety, and incorporated changes suggested by Democrats, including increased funding for defect investigations at the National Highway Traffic Safety Administration.

The higher limit on fines for auto companies fell short of what safety groups and the Obama administration had sought. The Transportation Department had suggested maximum $300 million fines as a greater deterrent. Senator Bill Nelson, a Florida Democrat, had proposed lifting the cap on fines altogether.

The Senate approved the measure without considering amendments that had been expected to improve auto safety. Democrats were critical of the bill, saying the measure missed an opportunity for reforms needed in response to record-breaking numbers of recalls.

Last year, General Motors Co. said it had responded too slowly to reports that there was an ignition-switch defect in some of its small cars, leading to stalling and non-functioning air bags. NHTSA has been trying to get to the bottom of exploding air bags made by Takata Corp.

Criminal Penalties

The Senate had previously rejected attempts to add criminal penalties for auto executives who knowingly hid information about safety defects.

“Today the Senate turned its back on the public and ran into the arms of special interests,” said Joan Claybrook, a longtime Washington consumer advocate who headed the National Highway Traffic Safety Administration in the 1970s. “There should be no victory laps or self-congratulations for passing such a horrific bill,”

The final vote on the surface transportation bill was 65-34. The measure still must be approved by the House of Representatives and signed by the president before it would become law.