The Path to Passage of the Recall Bill

It’s often said that to know where you are going, it’s important to know where you’ve been.

This statement cannot be truer for the car rental industry than when discussing the recent federal legislation regarding safety recalls on our vehicles. The measure, which passed as part of the multi-year highway funding bill, takes effect in June of this year.

The highway bill was signed by President Obama on Dec. 4, but the specific recall provision takes effect 180 days after being signed into law.

While this particular legislative issue has received much discussion and print space over the last several years, many of you may not appreciate its history and, therefore, how this federal legislation came to be — and the critical role ACRA has played in that history.

Where have we been? In 2011, a bill was introduced in the California legislature that would have, among other things, required rental car companies to “ground” any vehicle in its active rental fleet. In addition, the bill would have prohibited the sale of any rental car that had an unrepaired safety recall.

Because this legislation was drafted and submitted without any input from the rental car industry, it was fraught with multiple issues that would have negatively impacted industry operations. Therefore, the industry opposed the bill.

Despite our unified fight against it, the bill passed the California State Assembly and went to the California State Senate. While the bill was in the California Senate, the rental car industry started suggesting changes to the bill to accommodate the operational concerns. The industry and ACRA were making some progress in that regard.

Around this time, some ACRA members suggested that if the industry were to ultimately support legislation governing our practices, it should be at the federal level because the safety recall program is overseen by the National Highway Traffic Safety Administration (NHTSA).

Additionally, we are an industry engaged in interstate commerce: rental vehicles are regularly rented in one state and travel through one or several other states. Interstate commerce falls under the purview of Congress, not individual states. But there was no consensus on a federal strategy among ACRA member companies.

Meanwhile, in Washington, D.C., Sen. Charles Schumer (D-N.Y.) asked the Federal Trade Commission to open an investigation into our industry to determine if renting a vehicle with an unrepaired safety recall constitutes a deceptive trade practice. As a result, Schumer — along with Sen. Barbara Boxer and several other senators — introduced federal legislation that in many ways mirrored the California bill, but it went further.

Soon, other states such as New York and New Jersey began considering legislation. Could this turn into a patchwork of laws in 50 states? That wouldn’t have been a desirable outcome for the industry.

All of this dramatically upped the stakes and the rental industry had a decision to make: continue to fight — and potentially lose — the political and public relations battles or engage in constructive dialogue with Sens. Schumer and Boxer (and consumer groups) to see if a workable solution for the industry was attainable. A federal solution would solve the potential 50-state problem.

During this process through dialogue with consumer and safety groups, it became clear that our customers didn’t want to rent cars under open recalls.

ACRA and the industry decided to take the opportunity to set ourselves apart and begin blazing a new trail in auto safety legislation. We chose to do the right thing and craft federal legislation that the industry could rally behind. A compromise was ultimately reached, and the subsequent passage of the Safe Rental Car Act was the right thing to do.

ACRA firmly believes that — to borrow a phrase from Chris Brown in his Dec. 27 Auto Focus blog “The Wrong Side of History” — we will be on the right side of history.

Along the way, ACRA and its member companies proved that we can work well with legislators with whom we may disagree at first. And we can work well with consumer groups to find common ground. As ACRA addresses public policy issues in the future, we will have this history to help guide us.

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