Auto Recall Fines Could Increase to $300 Million Under New Bill

Apr 30, 2014 01:23 PM EDT | Matt Mercuro

A bill has been sent by the Obama Administration to congress this week that would reportedly increase the civil penalties that the the National Highway Traffic Safety Administration can charge automakers who don't recall vehicles quickly enough.

The proposal would also give the NHTSA the authority to require all rental-car companies to take part in recalls of unsafe or defective vehicles.

"The Grow America Act will expand authority to protect the public from automobile defects," said the U.S. Department of Transportation in a statement on its site. "The Grow America Act will strengthen safety regulators' ability to hold automobile manufacturers accountable for defects that can cost lives."

The bill would reportedly require all automakers to "expeditiously remove automobiles from the market when a defect is first discovered."

The proposal is being pushed likely because of a General Motors recall of 2.6 million cars that may contain defective ignition switches.

"Automobile defects generate hundreds of investigations each year, but delay in disclosing defects and initiating recalls have cost lives," the proposal reads.

The NHTSA is currently looking into why GM waited until February of this year to callback vehicles when it originally learned of the defect over a decade ago.  

Approximately 13 deaths have been linked to the now controversial GM recall.

All automakers have five days to recall vehicles after learning of an issue that could pose as an unreasonable risk to driver safety, according to the NHTSA.

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