California May Say Fix Recalls Or Don't Rent

March 28, 2011

An effort to require car rental companies to resolve safety recalls has surfaced in the state where the issue began - California. Assemblyman Bill Monning from Carmel has introduced The Raechel and Jacqueline Houck Rental Car SafetyAct named after the two sisters who died in a rental car that had an unrepaired power steering hose.

The car was rented even though the hose was identified as a potential fire hazard. It crashed with a tractor trailer in 2004. The Houcks were the fourth drivers to rent the PT Cruiser after the rental company had been notified of the recall.

This legislation is the local equivalent of a U.S. Senate bill that Senator Charles Schumer of New York has sponsored that would require car rental companies to handle safety recalls in the same manner that car dealers do, which is to resolve the safety recalls prior to putting the vehicles in service. The Santa Cruz Sentinel said that Monning called the ability of car rental companies to rent these unrepaired vehicles a "loophole" in the current federal law.

The assault on this safety issue at a state and federal level is due in part to the work of the victims' mother, Cally Houck, who has been vocal since the outcome of the lawsuit that she and her husband brought against the car rental company. Fifteen million dollars was awarded to the couple after they turned down a $3 million settlement that included a confidentiality agreement.  

Since then she has aligned herself with two consumer groups which petitioned the F.T.C. in August 2010 to require the rental company to repair every vehicle in its fleet that receives a safety recall notice. This would be a prerequisite to renting the vehicle.  

The car rental companies have disputed low recall resolution rates cited by Schumer to which Assemblyman Monning responded that it would be "great" if the rates were higher, but that his bill would serve as a means to "level the playing field " for all of the companies renting cars in California.

The president of one of the consumer groups said that the federal bill may have a tough time clearing the House, which makes the success of the California legislation very important. She said that passage in the country's largest car rental market would have an impact on the industry as whole.

For now AB753 has been referred to committee.

[Santa Cruz Sentinel]

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