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Senate Votes to Triple Maximum Safety Fines for Automakers

Motor Trend logo Motor Trend 7/31/2015 Kelly Pleskot

The U.S. Senate passed a bill that triples the maximum fines automakers could pay for safety violations to $105 million. The decision is part of a larger measure aimed at improving auto safety.

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Although the plan dramatically increases fines for safety abuses, the higher limit fell short of what consumer groups and the Obama administration had wanted. Transportation Secretary Anthony Foxx pushed last year to raise maximum penalties to $300 million, or eight times higher than the previous limit of $35 million. Meanwhile, Senator Bill Nelson of Florida had suggested a complete lift on the cap of fines.

The announcement comes as a number of daunting recalls have come to light. Last year, regulators slapped General Motors with maximum fines for failing to report ignition switch defects in a timely manner. Meanwhile, Takata has faced severe penalties for "not fully cooperating" with the federal investigation into defective airbags. Most recently, Fiat Chrysler Automobiles piled on record fines related to 23 recalls covering more than 11 million vehicles. Incidentally, the total FCA was ordered to pay was $105 million.

Automakers could pay up huge chunks of cash if they are cited for multiple violations, but there's a possibility that the bill won't go into effect. The DRIVE Act passed by a strong vote of 65-34 in the Senate, but still needs to be approved by the House of Representatives and the president before it becomes law. Other parts of the pending legislation include prohibiting rentals on recalled cars, asking dealers to run recall checks on cars that come in for routine servicing, and increasing transparency on how the nation's transportation dollars are spent.

Source: U.S. Senate, Bloomberg

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