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Hopes High for Bill Banning Rental of Recalled Vehicles

Cally Houck got the phone call that every parent dreads one October day in 2004 — and it was a double blow. Both her daughters had been killed when a car they had rented caught fire and crashed at high speed on a California freeway.

Raechel, 20, and Jacqueline, 24, had leased a Chrysler PT Cruiser sedan from Enterprise Rent-A-Car for the five-hour drive home. “When they went to pick it up, it was the only car left on the lot,” Houck says.

That stroke of good luck quickly soured. The young women didn’t know that the car was under recall for a serious safety defect: A high-pressure hose was known to spring leaks that could spray flammable power steering fluid onto the red-hot catalytic converter. The sisters never had a chance when flames consumed their car, which slammed into a tractor-trailer.

After learning that the PT Cruiser was under active recall, Houck says she and her husband discovered Enterprise never heeded the notice to make critical repairs and, in fact, had rented the same vehicle to three other customers during the three weeks after the recall.

“We just couldn’t believe there wasn’t a law about this already,” Houck says.

Eight years later, there is still no such law, but there has been considerable progress. And supporters are optimistic that legislation by Democratic Sens. Barbara Boxer of California and Charles E. Schumer of New York to ban rental companies from renting or selling recalled vehicles could pass before the end of the year.

Already, the push by Boxer and Schumer produced a major victory in September, when the largest U.S. rental car companies — including Hertz, Dollar Thrifty, Avis Budget and Enterprise — agreed to stop renting and selling cars under active recall. Together, those companies account for about 93 percent of all U.S. auto rentals. The rental industry’s trade group also endorsed the ban.

Despite the agreement, Boxer and Schumer continue to press for their bill. Consumer advocates say legislation is necessary to ensure compliance by independent rental agencies and a growing number of foreign companies operating out of international airports that have not signed on to the deal.

“We want them to be a part of the regulatory structure,” says Rosemary Shahan, president of Sacramento, Calif.-based Consumers for Auto Reliability and Safety.

As proposed, the legislation (S 3502) introduced by Boxer would ban the rental or sale of vehicles under recall and give rental companies 24 to 48 hours, depending on size, to remove recalled vehicles from their fleet until they are repaired. To provide rental companies with the flexibility to keep enough of their fleets active in the case of a major recall, companies would be permitted to make temporary repairs if approved by regulators.

The bill also would allow federal regulators to exercise new authority to enforce the law. An earlier version (S 1445) introduced by Schumer would have designated the sale or rental of unrepaired recalled vehicles as “unfair and deceptive acts or practices” that fall within the Federal Trade Commission’s jurisdiction.

Shahan’s consumer advocacy group has spent years fighting for such consumer protections as “lemon laws” to assure defect-free vehicle purchases. Houck worked with the group to push the rental car recall protection at the state level in California, and the group then took the cause to the national level.

Initially, Boxer and Schumer ran into resistance from the rental car industry toward any additional regulation. The issues of fleet flexibility and allowing temporary repairs posed significant stumbling blocks — especially after the recall of more than 9 million Toyota vehicles in 2009 and 2010.

While the National Highway Traffic Safety Administration identified a number of more complicated potential design flaws, the main culprit in a number of cases of sudden acceleration in Toyotas was found to be floor mats that jammed beneath the gas pedal. Removing those mats until redesigned parts could be installed significantly reduced the risks.

Rental companies wanted to be sure that in a future case like the Toyota recall, they could make the easy temporary fix without disabling huge portions of their fleets. Addressing those concerns, Shahan says, was critical to winning support from the rental car industry.

By the time that issue was settled, Boxer was presiding over conference negotiations this summer on a two-year highway bill (PL 112-141). The rental car legislation was clearly germane to the bill, but Boxer had pledged not to “air drop” new provisions into the conference report and the measure got left behind.

With its concerns about fleet flexibility addressed, the industry began volunteering to follow the ban on renting or selling recalled vehicles.

Hertz, which had a nationwide fleet of about 320,000 cars in 2011, was the first to agree. After pressure from Sens. Claire McCaskill, D-Mo., and Roy Blunt, R-Mo., Missouri-based Enterprise — with more than 920,000 cars, vans and trucks in its fleet — signed on. Within weeks, Avis Budget and Dollar Thrifty had signed on as well.

The American Car Rental Association gave its full blessing to the legislation in October, saying its members, including independents, supported the bill because it “will hold our industry to an even higher standard than all other used car sellers and hopefully set the standard for other for-hire transportation services.”

Supporters hope the industry backing will help them get the Boxer legislation passed in the short time left before the 112th Congress adjourns. Shahan insists it can be done.

“Everybody rents cars sooner or later,” she says. “ You expect that the car that you rent from a reputable company to be safe.”

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