WASHINGTON – A sweeping overhaul of the nation’s auto safety laws is stalled — and faces an uncertain fate when Congress returns after its August recess.

Auto safety advocates urged Congress during a press conference Wednesday to move quickly on an overhaul in the wake of Toyota Motor Corp.’s recall of 8.5 million vehicles worldwide over sudden acceleration concerns, The Detroit News reported.

Congress has held eight hearings on auto safety issues, and House and Senate committees have approved similar versions of legislation. Automakers, however, are seeking major changes.

As public attention has faded from Toyota’s problems and Congress has turned its attention to issues like the massive BP oil spill in the Gulf of Mexico, some advocates are worried that Congress will go home without getting the auto safety measure passed.

“It’s time for Congress now to ignore and oppose efforts by industry lobbyists to weaken the central provisions to prevent another Toyota fiasco,” said Jacqueline Gillan, vice president for Advocates for Highway and Auto Safety.

None of the three members of Congress who was scheduled to attend the event showed up.

“We’re going to try to move it when we come back after the August recess,” Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce, said in an interview Wednesday.

Waxman’s committee in May approved a watered-down version of a bill introduced in the spring. The bill requires the National Highway Traffic Safety Administration to take action on a host of new regulations, including:

• Fining auto executives who submit false reports $5,000 per day or up to $5 million for a single recall.
• Increasing the cap for fines against automakers to $200 million, or $25,000 per vehicle — up from the current maximum of $16.4 million per recall.
• Requiring NHTSA to start developing rules on the placement of pedals, to avoid obstructions, within 18 months. Toyota recalled 5.4 million vehicles over concerns that floor mats would trap pedals.

The Alliance of Automobile Manufacturers — the trade group representing Detroit’s Big Three automakers, Toyota Motor Corp. and seven others — is urging significant changes to the measure.

“There are still a few issues in the bill that need to be addressed as it moves forward,” said Wade Newton, a spokesman for the group. “We hope to continue to work with Congress to resolve these issues as the bill proceeds.”

WASHINGTON – The National Automobile Dealers Association (NADA) urges House and Senate conferees to keep finance options for car buyers affordable and accessible when considering legislation to overhaul the nation’s financial system.

“The House and Senate sent a very clear and bipartisan message that Main Street auto dealerships should not be in a Wall Street reform bill,” said David Regan, NADA vice president of legislative affairs.

During consideration of the Wall Street reform legislation, members of Congress voted to keep in place the sound regulatory structure that has allowed millions of consumers to buy new vehicles at competitive interest rates instead of creating an uncertain regulatory regime under a new agency.

Late last year, a strong bipartisan majority in the House Financial Services Committee voted 47-21 to support an auto dealer amendment, sponsored by Rep. John Campbell, R-Calif, which seeks to keep dealer-assisted financing a competitive option for auto shoppers. The amendment was retained in the final House bill.

On May 24, the Senate, by an overwhelming bipartisan margin (60-30), voted to support a “motion to instruct the conferees” offered by Sen. Sam Brownback, R-Kan., to keep the auto dealer language in the conference report.

“Auto dealerships are not banks. Dealers help consumers find affordable credit by arranging financing through a network of third-party lenders,” Regan said. “Dealerships do not underwrite, fund or service auto loans or leases and those that do will be subject to the new agency’s regulations, even under the Brownback/Campbell auto dealer language.”

Regan further emphasized that the new consumer agency proposed in the bill would have direct federal oversight over all auto loans. All banks, finance companies, credit unions and, dealerships that directly fund and service auto loans would also be regulated.

Regan said that false allegations by various groups were an attempt to confuse lawmakers, but many in Congress realized that the claims are without merit. For instance, baseless claims regarding dealer practices toward the military were dismissed because no data exists to back up the claims. In fact, when the Department of Defense presented a comprehensive report on predatory lending directed at the military in 2006, the report did not specifically identify dealer-assisted financing as a problem, instead focusing on payday loans, auto title lending, and refund anticipation loans. Click here for the report.

Similarly false claims alleging discriminatory practices also did not withstand scrutiny. A study cited by opponents failed to factor in an individual’s creditworthiness when determining a loan’s interest rate.

Congress also recognized that the Brownback/Campbell auto dealer language preserves all existing state and federal consumer protection statutes and regulations that govern dealer-assisted financing. Dealers’ retail financing activity would continue to be effectively regulated by the Federal Reserve Board and the Federal Trade Commission.

Regan urged the bill’s conferees to remember that dealer-assisted financing is optional for car buyers and provides more convenience, more competition and more choices for consumers. Dealers’ relationships with numerous lenders allow them to help consumers find more competitive financing. Often an automaker’s captive finance company enables dealers to provide 0 percent financing, which banks and credit unions do not offer.

“The vast majority of Congress looked at the facts and clearly saw that auto financing did not cause the financial crisis,” Regan said. Auto financing is sound because lenders must look primarily to the borrower for repayment, since financing is secured by a depreciating asset (the vehicle). Since 2004, 60-day auto loan delinquencies have never exceeded 1 percent, even during the worst of the recent recession.

“Consumers win when they have multiple financing options. Conferees must keep auto financing affordable for consumers from all walks of life by keeping competition in the marketplace,” Regan added.

WASHINGTON – The House held its first hearing on a sweeping overhaul of the nation’s auto safety laws Thursday, but Democrats face a tight timetable to win passage before Congress goes home this summer, The Detroit News reported.

Republicans said the draft written by Rep. Henry Waxman, D-Calif., goes too far and shouldn’t impose a per vehicle fee to pay for a $100 million increase in funding for the National Highway Traffic Safety Administration.

Waxman’s bill would mandate auto black boxes and brake override systems, and grant NHTSA the power to order an immediate stop of sales and production of vehicles that pose an “imminent danger.”

Rep. Steve Scalise, R-La., said that idea would “short circuit” the recall process. He also questioned whether the bill was aimed at helping trial lawyers win cases.

The bill is “driving down the wrong road,” Scalise said.

The Waxman bill would double NHTSA’s enforcement budget by adding a $3 fee on all new car sales, allow consumers the right to appeal the rejection of their safety complaints and hike penalties for automakers and executives caught violating auto safety laws. A similar measure has been introduced by Sen. Jay Rockefeller, D-W. Va., chairman of the Senate Commerce Committee.

Automakers object to some proposals, saying they go too far and impose new mandates too quickly. They back requirements for extended event data recorders and brake override systems.

Several Republicans said the new tax is unnecessary and questioned what NHTSA would do with an extra $100 million.

Waxman, chairman of the House Energy and Commerce Committee, said the bill was aimed at restoring “the faith of the driving public.” He said drivers had been “severely rattled” by Toyota Motor Corp.’s recall of 8.5 million vehicles worldwide over sudden acceleration concerns.

The new event data recorders proposed for all vehicles would collect far more data than current ones that are in some vehicles — 60 seconds before a crash and 15 seconds after it. Republicans raised privacy concerns about mandating the devices without more discussion.

Toyota recently agreed to pay $16.4 million for delaying a recall of 2.3 million vehicles over sticky pedal concerns by at least four months. If the Waxman bill had been law, NHTSA could have imposed a $69 billion penalty.

Rep. Joe Barton, R-Texas, called the proposed hike in fines — including up to $250 million for individual auto executives — “overkill.”

NHTSA administrator David Strickland took no position on any of the bill’s new mandates and said the Obama administration is still reviewing the bill.

But he said the Waxman bill would “significantly increase the agency’s leverage in dealing with manufacturers,” and getting imminent hazard authority “would bring NHTSA’s authority into line with that of many other safety and health agencies.”

WASHINGTON – The nation’s banks told the Senate Finance Committee that it is unfair to make them pay for taxpayer losses on the automotive bailout.

The Obama administration and some congressional Democrats want to impose a new fee or tax on the nation’s largest financial institutions to cover any losses from the $700 billion Wall Street and auto bailout fund known as the Troubled Asset Relief Program, The Detroit News reported.

The auto industry has received an $85 billion bailout, and the administration’s most recent estimate says it expects to lose $28 billion. But the Treasury Department will update that estimate later this month.

Treasury Secretary Timothy Geithner also defended the government’s proposal.

“Banks should pay for the cost of bank failures — not taxpayers,” Geithner testified.

General Motors Co. and Chrysler Group have received about $62 billion in government bailouts. If taxpayers lost money on either investment, banks would be required to make up those losses.

Geithner says GM and Chrysler shouldn’t be covered by the fee because they have already been restructured in bankruptcy.

“The auto companies are a different case,” Geithner said. “Despite the many mistakes they made over time managing those businesses, they did not cause this financial crisis. Their challenges were made substantially worse by this financial crisis.”

He said Treasury didn’t think “it was necessary or appropriate” to apply the tax to the automakers.

Geithner said GM and Chrysler are in a “much stronger position today than any of us expected.”

But the new tax would apply to Detroit-based GMAC Inc., Geithner said. GMAC, which will be renamed Ally Bank next week, has received a $17.2 billion bailout and is 56.3 percent owned by the U.S. Treasury.

The Obama administration said the new tax would raise $90 billion over 10 years.

“We question why the financial industry should be asked to pay for TARP losses attributable to other industries,” said Steve Bartlett, president and CEO of the Financial Services Roundtable.

James Chessen, chief economist for the American Bankers Association, testified that if the TARP program had been limited to financial institutions, “there would be no losses.” He said it was “unfair” for banks to have to cover the losses of automakers.

Sen. Orrin Hatch, R-Utah, questioned why banks that didn’t receive government bailouts are also covered. He said the tax wouldn’t be fair because it would not cover GM, Chrysler and Fannie Mae and Freddie Mac.

Sen. Charles Grassley, R-Iowa, a harsh critic of GM’s recent advertisements that touted its repayment of $6.7 billion in loans, asked Geithner why GM isn’t returning unused government bailout funds that had been in escrow.

On April 21, the Treasury gave GM unrestricted use of $6.6 billion in unused government bailout funds.

“Why shouldn’t GM return the funds to the U.S. government?” Grassley asked.

Grassley and other Republicans have been angry that GM hasn’t emphasized that the Treasury Department swapped $43 billion in loans for a 61 percent majority equity stake in GM.

Grassley and others have criticized GM ads that featured GM CEO Edward Whitacre Jr.; the ads stopped running last week. A conservative think tank, the Competitive Enterprise Institute, filed a complaint with the Federal Trade Commission over the ads today, asking the agency to investigate.

GM has defended the ads and even Grassley has acknowledged they were “technically accurate.”

Sen. Debbie Stabenow, D-Lansing, said the automakers shouldn’t be covered by the new fee.

Automakers were hurt by the frozen credit markets and didn’t engage in reckless behavior as banks did, Stabenow said.

She called it “apples to oranges” to apply the fee to automakers.

WASHINGTON – Congressional investigators have widened their probe of defects in Toyota Motor Corp. vehicles yet again, asking five leading automobile insurers if they had notified U.S. regulators of unintended acceleration reported by consumers as far back as 2000, according to a report by Automotive News and Reuters.

House Energy Committee Chairman Henry Waxman, D-Calif., on Tuesday sent letters to Allstate Insurance, Farmers Insurance Group, GEICO, Progressive Group and State Farm Group asking for copies of their communications with the National Highway Traffic Safety Administration about Toyota defects. He gave a Feb. 17 deadline for responses.

The panel is trying to determine the history of Toyota’s efforts to identify and address its defects, as well as the effectiveness of NHTSA’s oversight over the years.

The letters, also signed by Rep. Bart Stupak, D-Mich., chairman of an oversight subcommittee, followed a Tuesday Washington Post report saying State Farm Insurance had notified NHTSA numerous times starting in 2007 about an unusual number of cases of unintended acceleration.

“We are interested in learning whether your company has issued similar warnings to the agency,” the congressional letters said.

In 2007, NHTSA was conducting an investigation of Toyota acceleration that led to a recall of 55,000 floor mats.

Both the House Energy Committee, which has a hearing scheduled for Feb. 25, and the House Oversight Committee, which postponed a hearing until Feb. 24, are investigating defects in Toyota vehicles.

The Energy panel initially requested documents from Toyota and NHTSA dating back to 2000 that might shed light on the causes of unintended acceleration in Toyota vehicles. Last week, the committee asked about possible connections between the speed-control problem and the braking problems reported on the Prius.

The Oversight panel last week asked Toyota whether its problems might be caused not only by floor mat entrapment and sticky gas pedals, as the company has asserted, but also by electronic defects, which the automaker has denied.

WASHINGTON – Toyota has friends in high places in Washington, including some of the very people now investigating the Japanese automaker, reported The Detroit News.

The company has sought to sow good will and win allies with lobbying, charitable giving, racing in the American-as-apple pie NASCAR series and, perhaps most important, creating jobs.

Lawmakers on the committees investigating Toyota’s massive recall represent states where Toyota has factories and the coveted well-paying manufacturing jobs they bring. Some members of Congress have been such cheerleaders for Toyota that the public may wonder how they can act objectively as government watchdogs for auto safety and oversight. The company’s executives include a former employee of the federal agency that is supposed to oversee the automaker.

The Senate’s lead Toyota investigator, West Virginia Democrat Jay Rockefeller, credits himself with lobbying Toyota to build a factory in his state. A member of a House investigating panel, California Rep. Jane Harman, represents the district of Toyota’s U.S. headquarters and has financial ties to the company.

Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, has known Toyota’s founding family since the 1960s. He was so closely involved with Toyota’s selection of Buffalo, W.Va., for a factory that he slogged through cornfields with Toyota executives scouting locations and still mentions his role in the 1990s deal to this day.

Rockefeller’s committee is expected to review whether the National Highway Traffic Safety Administration acted aggressively enough toward Toyota. The agency’s new chief, David L. Strickland, worked for eight years on Rockefeller’s panel as a lawyer and senior staffer.

Strickland has such close relationships with Rockefeller and other senators that Republican Sen. George LeMieux of Florida asked Strickland at his confirmation hearing two months ago whether he could disagree with Rockefeller, his former boss: “The oversight for you in your role will be from the committee that you once served on,” LeMieux told him.

“I will be honest with you, sir,” Strickland answered. “I’ve had disagreements with the chairman personally. But he signs the paycheck, and he wins. But I will have no problem with that at all, sir.”

Several other lawmakers on investigating committees also represent states with Toyota factories, including Missouri, Texas, Mississippi, Michigan, Indiana and Kentucky. Toyota says it employs nearly 36,000 people in the United States and indirectly employs about 166,000 people at dealerships and suppliers.

WASHINGTON – After more than $100 billion in government assistance to the auto industry, key members of Congress are coming to the North American International Auto Show to get a look at what they got with the public’s money, reported The Detroit News.

Led by House Speaker Nancy Pelosi, at least a dozen members of Congress, including House Majority Leader Steny Hoyer, D-Md., will spend most of the day at the auto show.

“Our bipartisan delegation will visit Detroit to see firsthand the innovative technologies the industry is investing in to create the jobs of the future and to ensure our national competitiveness,” Pelosi said Thursday. She was invited by Rep. John Dingell, D-Dearborn, a long-time champion of the auto industry.

The delegation will meet with the chief executives of the Detroit Three: General Motors Co., Ford Motor Co. and Chrysler Group LLC. Gov. Jennifer Granholm and Detroit Mayor Dave Bing will accompany them.

The lawmakers also will learn about the problems of auto suppliers and hold a lunch focused on job creation. The visit has several goals:

• The delegation seeks to assure Michigan and other midwestern auto states that Democrats care deeply about the auto industry and wrenching job losses.
• Furthermore, lawmakers and automakers both embrace fuel-efficient plug-in electric vehicles and they want to highlight the common cause.

Granholm said in an interview Thursday that she wants to use the visit “to cement, really, in the minds of these national leaders that Michigan will be the epicenter of a green economy in this country.”

Rep. Gary Peters, D-Bloomfield Township, hopes Congress’ delegation to the show will learn more about the progress domestic automakers have made.

“I certainly confront a lot of misinformation on a regular basis,” Peters told The Detroit News.

Michigan members “are constantly dispelling myths and misinformation about the domestic auto industry,” he said.