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98–448 2016

LEGISLATIVE HEARING ON VIN DATABASE AND 

AUTO WHISTLEBLOWER BILLS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 25, 2015 

Serial No. 114–78 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California7 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MICHAEL C. BURGESS, Texas 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

FRED UPTON, Michigan (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

BOBBY L. RUSH, Illinois 

G.K. BUTTERFIELD, North Carolina 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

C O N T E N T S 

Page 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 3 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 52 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, prepared statement ........................................................................ 53 

WITNESSES

John Bozella, President and CEO, Association of Global Automakers ............... 5 

Prepared statement .......................................................................................... 7 

Answers to submitted questions ...................................................................... 64 

Joe LaFeir, Senior Vice President, Automotive IS&S, Inc. .................................. 13 

Prepared statement .......................................................................................... 15 

Answers to submitted questions ...................................................................... 68 

Cleveland Lawrence, III, Co-Director, Taxpayers Against Fraud ....................... 18 

Prepared statement .......................................................................................... 20 

Answers to submitted questions ...................................................................... 70 

William C. Wallace, Policy Analyst, Consumers Union ....................................... 29 

Prepared statement .......................................................................................... 31 

Answers to submitted questions ...................................................................... 75 

Shane Karr, Vice President, Federal Affairs, Alliance of Automobile Manufacturers ..................................................................................................................... 38 

Prepared statement .......................................................................................... 40 

Answers to submitted questions ...................................................................... 77 

SUBMITTED MATERIAL

Statement of LKQ Corporation, submitted by Mr. Butterfield ............................ 54 

Statement of the American Car Rental Association, submitted by Mr. 

Butterfield ............................................................................................................. 56 

Statement of the American Association of Motor Vehicle Administrators, submitted by Mr. Butterfield .................................................................................... 60 

Statement of Experian, submitted by Mr. Burgess .............................................. 61 

(1) 

LEGISLATIVE HEARING ON VIN DATABASE 

AND AUTO WHISTLEBLOWER BILLS 

FRIDAY, SEPTEMBER 25, 2015 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:05 a.m., in room 

2322, Rayburn House Office Building, Hon. Michael C. Burgess, 

M.D., (chairman of the subcommittee) presiding. 

Present: Representatives Burgess, Lance, Guthrie, Bilirakis, 

Brooks, Mullin, Schakowsky, Kennedy, Butterfield, and Pallone (ex 

officio). 

Staff Present: James Decker, Policy Coordinator, CMT; Melissa 

Froelich, Counsel, CMT; Kirby Howard, Legislative Clerk, Paul 

Nagle, Chief Counsel, CMT; Olivia, Trusty, Professional Staff, 

CMT; Dylan Vorbach, Staff Assistant; Michelle Ash, Minority Chief 

Counsel, Commerce, Manufacturing, and Trade; Jeff Carroll, Minority Staff Director; Lisa Goldman, Minority Counsel; Rick 

Kessler, Minority Senior Advisor and Staff Director, Energy and 

Environment; and Adam Lowenstein, Minority Policy Analyst. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. The subcommittee on Commerce, Manufacturing, 

and Trade will now come to order. The chair will recognize himself 

for 5 minutes for the purpose of an opening statement. 

And I do want to welcome everyone to our hearing this morning 

on the draft companion legislation to the Motor Vehicle Safety 

Whistleblower Act, and the discussion draft of the Improving Recall 

Tracking Act. 

In 2014, there were over 63 million vehicles recalled in the 

United States due to safety concerns. This represents the highest 

number of vehicle recalls in more than three decades. 

Under current law, vehicle manufacturers are required to report 

defects and noncompliance to the National Highway Traffic Safety 

Administration. The chairman of the full committee, Mr. Upton, 

has seen to it with the good work he did on the TREAD Act, but 

there have been times when the reporting has been slow. 

The Motor Vehicle Safety Whistleblower Act is intended to foster 

greater attention and greater responsiveness to vehicle safety defects. It does so by providing an incentive to automotive employees 

and to contractors who report potential safety violations to the 

2 

United States Department of Transportation that otherwise would 

be concealed or unreported. The bill encourages employees to report 

safety problems within their companies first to allow the automaker the opportunity to address safety issues. This is an important point because it keeps the incentive to work within the system. The bill is meant to enhance current early reporting systems 

that have already been instituted by Congress. Furthermore, the 

bill is designed with the express purpose of exposing and stopping 

instances of wrongdoing and protecting the safe and well-being of 

the public. 

In addition to the Motor Vehicle Safety Whistleblower Act, we 

have an opportunity to examine the discussion draft of the Improving Recall Tracking Act. This proposal would direct the Department of Transportation to establish a national database of vehicle 

identification numbers and driver registration information. It is intended to facilitate the consumer notification process in the event 

of a safety recall. 

In light of recent recalls, it has become apparent that one of the 

main challenges of removing defective vehicles from the road is 

making certain that the right consumers are notified of the defect 

in a timely manner. This hearing will give us an opportunity to discuss how a national database housing current driver registration 

information and current vehicle identification numbers could help 

improve the consumer recall notification process beyond that which 

is in place today. We will also hear how the industry is currently 

responding to these challenges so we can factor in improvements 

of the system. 

Vehicle safety is a serious issue. It continues to be a concern for 

this subcommittee and for the driving public. In past hearings on 

this subject, I have said that Americans deserve better, Americans 

deserve more. The legislative proposals we will consider today are 

a step in the right direction toward providing the driving public 

with confidence that the vehicles they are driving are safe and that 

the recall process works. I will, in anticipation, thank the witnesses 

for their testimonies. And I look forward to an engaging discussion 

on these measures. 

With that, the chair yields back and recognizes the subcommittee 

ranking member, Ms. Schakowsky, for 5 minutes for an opening 

statement. 

[The prepared statement of Mr. Burgess follows:] 

PREPARED STATEMENT OF HON. MICHAEL C. BURGESS

Good morning. I want to welcome everyone to today’s hearing on the draft companion legislation to the Motor Vehicle Safety Whistleblower Act, and the discussion 

draft of the Improving Recall Tracking Act. 

In 2014, there were over 63 million vehicles recalled in the United States due to 

safety violations. This represents the highest number of vehicle recalls in more than 

three decades. 

Under current law, vehicle manufacturers are required to report defects and noncompliance to the National Highway Traffic Safety Administration. Our Chairman 

has seen to it with the good work he did on the Tread Act. But there still have been 

times when the reporting has been too slow. 

The Motor Vehicle Safety Whistleblower Act is intended to foster greater attention 

and responsiveness to vehicle safety defects. It does so by providing an incentive to 

automotive employees and contractors who report potential safety violations to the 

U.S. Department of Transportation that are concealed or go unreported. The bill enVerDate Nov 24 2008 12:20 Mar 01, 2016 Jkt 037690 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-78 CHRIS
3 

courages employees to report safety problems within their companies first to allow 

automakers the opportunity to address possible issues. This is an important point 

because it keeps the incentive to work within the system. The bill is meant to enhance current early reporting systems that have already been instituted by Congress. Furthermore, the bill is designed with the express purpose of exposing and 

stopping instances of wrongdoing, and protecting the safety and wellbeing of the 

public. 

In addition to the Motor Vehicle Safety Whistleblower Act, we will have an opportunity to examine the discussion draft of the Improving Recall Tracking Act. This 

proposal would direct the Department of Transportation to establish a national 

database of vehicle identification numbers and driver registration information. It is 

intended to facilitate the consumer notification process in the event of a vehicle safety recall. 

In light of recent recalls, it has become apparent that one of the main challenges 

of removing defective vehicles from the road is making sure that the right consumers are notified of the defect in a timely manner. This hearing will give us an 

opportunity to discuss how a national database housing current driver registration 

information and vehicle identification numbers could help improve the consumer recall notification process beyond the processes that are in place today. We will also 

hear how the industry is currently responding to these challenges so we can figure 

out how to improve the system. 

Vehicle safety is a very serious issue that continues to be a concern for this subcommittee and the driving public. In past hearings on this subject, I have said that 

Americans deserve more. The legislative proposals we will consider today are a step 

in the right direction towards providing the driving public with confidence that the 

vehicles they are driving are safe and the recall process works. I thank the witnesses for their testimonies and I look forward to an engaging discussion on these 

measures. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. It is so nice to 

meet on a quiet day where there is no real news to be talking 

about except for this. But even in connection with this, I did want 

to mention that I think this committee can also be focusing on very 

big issues and big news. And I look forward, I hope, to focusing on 

Volkswagen and their fraudulent emissions testing, cheating, that 

was revealed earlier this month. 

As you pointed out, that the law already does require auto manufacturers to report defects. And here we have a situation of deliberately building in a defect. And we need to talk about that. I have 

a piece of legislation, the Vehicle Safety Improvement Act, which 

I think would actually do the real deal in terms of making sure 

that we deal with auto safety. 

I want to recognize and welcome a friend of mine, Will Wallace, 

and a friend of this committee, who is testifying today on behalf of 

Consumers Union. He is an outstanding former staffer of the subcommittee and I know will bring important insight to this issue. 

With more than 95 million American vehicles subject to safety 

recall over the past 2 years, we obviously have to improve the oversight of the auto industry and the efficacy and timeliness of recalls. 

I believe, unfortunately, that these bills miss the mark. While I 

support efforts to enhance the communication between auto companies and drivers whose cars are subject to recall, I don’t believe 

that the vehicle identification number, VIN Database, discussion 

draft would achieve this goal. 

Manufacturers are already able to access the names and addresses of drivers whose vehicles are subject to a recall. The difference 

4 

in the discussion draft is that those records would be free of charge 

to the auto companies. And, yet, the bill would impose significant 

costs on NHTSA and the States with no funding provided to implement the new database. The Illinois Secretary of State’s Office has 

communicated to us that he has serious concerns about the lack of 

financial support. 

The second bill is intended to encourage auto industry whistleblowers. And while I appreciate the inclusion of language allowing 

whistleblowers to receive compensation and anonymity for coming 

forward, I have concerns about the bill’s stipulations. Mr. Chairman, you said that it is good that the whistleblower has to report 

their concerns directly to the company first internally. And while 

one could make an argument that this might speed things up, I 

also really worry that provisions would discourage whistleblowers 

from acting and put them at professional risk for doing so, which 

really has been the history of whistleblowers. They have not done 

well vis-a-vis the companies that they work for. 

There is a broader and more impactful legislative alternative to 

improve auto safety, as I said. My Vehicle Safety Improvement Act, 

which is cosponsored by Ranking Member Pallone and nine other 

members of this committee, is the alternative. It increases the 

amount and accessibility of information auto manufacturers must 

share with NHTSA and the public, and the public, about vehicle 

safety issues, and provides new authority to expedite auto recalls 

if they pose an imminent hazard of serious injury or death. 

So that is what I am hoping that we are going to be able to do 

rather than I believe these bills, which kind of nibble around the 

margins. I am not just disappointed, I am actually frustrated. And 

I again urge the subcommittee to take up the Vehicle Safety Improvement Act. And I look forward to a discussion about what 

Volkswagen has been doing. And I yield back. 

Mr. BURGESS. The chair thanks the gentlelady. The gentlelady 

yields back. 

Does anyone on the Republican side seek time for an opening 

statement? Seeing none. Any further members on the Democratic 

side that seek time for an opening statement? Seeing none. 

Again, we want to thank our witnesses for being here today and 

for being willing to take time to give testimony before the subcommittee. Our witness panel for today’s hearing includes: Mr. 

John Bozzella, the President and CEO for the Alliance of Global 

Automakers; Mr. Joe LaFeir, Senior Vice President at IHS Automotive; Mr. Cleveland Lawrence, III, the Co-Director of Taxpayers 

Against Fraud; Mr. William Wallace, the Policy Analyst at the Consumers Union; Mr. Shane Karr, Vice President for Federal Affairs 

at the Alliance of Automotive Manufacturers. 

We do appreciate all of you being here today. We will begin the 

panel with Mr. Bozzella. He will be recognized for 5 minutes to 

summarize his testimony. Mr. Bozzella, you are recognized for 5 

minutes. Thank you. 

5 

STATEMENTS OF JOHN BOZELLA, PRESIDENT AND CEO, ASSOCIATION OF GLOBAL AUTOMAKERS; JOE LAFEIR, SENIOR 

VICE PRESIDENT, AUTOMOTIVE IS&S, INC.; CLEVELAND 

LAWRENCE III, CO-DIRECTOR, TAXPAYERS AGAINST FRAUD; 

WILLIAM WALLACE, POLICY ANALYST, CONSUMERS UNION; 

AND SHANE KARR, VICE PRESIDENT, FEDERAL AFFAIRS, ALLIANCE OF AUTOMOBILE MANUFACTURERS 

STATEMENT OF JOHN BOZELLA 

Mr. BOZZELLA. Thank you, Mr. Chairman, Ranking Member 

Schakowsky, members of the subcommittee, thank you very much 

for the opportunity to testify today. 

I am John Bozzella, CEO and President of the Association of 

Global Automakers. As the ranking member has mentioned, the 

very troubling facts that have come to light involving Volkswagen 

will likely have significant implications for the industry. And I look 

forward to working with the subcommittee and discussing these 

issues as we move on. 

I have been asked for our perspective on two bills, the Motor Vehicle Safety Whistleblower Act and the Improving Recall Tracking 

Act. In 2012, Congress included strong whistleblower provisions in 

MAP–21. We agree that whistleblower protection is a valuable tool 

for ensuring that safety concerns will be promptly identified, investigated, and remedied. The bill before the subcommittee builds on 

this law. Whistleblower protections have been incorporated into the 

safety practices of our members because they recognize that the 

manufacturer and its employees are the first line of defense in 

identifying and remedying safety concerns. Our member companies 

have instituted internal controls that empower employees to communicate with their employer about any problem they observe that 

could impair product quality or safety. For example, manufacturers 

train their employees specifically on product defect and safety 

issues and have dedicated safety officers who are responsible for 

following up on concerns raised by employees. 

In addition, manufacturers have established hotlines that empower employees to communicate potential problems. Such systems 

allow the company to take appropriate remedial steps, in many 

cases before the affected vehicles leave the factory. But no system 

is foolproof. We recognize that whistleblower statutes can play an 

important role in improving motor vehicle safety. 

The implementing regulations should give companies every reason and incentive to be informed of the problems promptly so that 

they can investigate the issues and make any repairs that are 

needed. While it is important for whistleblowers to be able to report safety issues directly to NHTSA, the process should ensure 

that employees are not incentivized to shortcut or circumvent internal systems that would result in quicker problem resolution. Our 

shared goal is to address defects, find remedies, and take care of 

the customer as quickly as possible. This is why the manufacturer 

needs to be a critical part of the process from the beginning. 

The second bill before the subcommittee would establish a national VIN database using registration data collected by State 

DMV offices. We agree DMVs could help improve recall completion 

rates. This bill would allow manufacturers access to the most up 

6 

to date information from the DMVs, which they could use to more 

effectively communicate recall notices to vehicle owners. In addition, DMVs could be encouraged to notify everyone who registers 

a motor vehicle about the recall status of their vehicle. 

This bill also directs NHTSA to enable batch searching and processing of VINs on its SaferCar.gov Web site. We are aware that the 

current NHTSA system has limitations. But it is our understanding that some vendors have developed tools that enable batch 

processing. We believe the subcommittee should ensure that the 

processes created by this bill are not unnecessarily duplicative. 

Increasing recall completion rates is a priority for Global Automakers. That is why we are conducting research along with the 

Auto Alliance to help understand what drives consumers to respond to recall campaigns. We look forward to briefing the subcommittee on the research findings soon. 

Thank you again for the opportunity to appear before you today. 

And I would be happy to answer any questions that you might 

have. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. 

[The prepared statement of Mr. Bozella follows:] 

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Mr. BURGESS. Mr. LaFeir, you are recognized for 5 minutes to 

summarize your testimony please. 

STATEMENT OF JOE LAFEIR 

Mr. LAFEIR. Chairman Burgess, Ranking Member Schakowsky, 

thank you for allowing me to testify, and members of the subcommittee. 

I am Joe LaFeir, Senior Vice President, Information Systems and 

Solutions for IHS, where I lead the company’s automative data solutions business, which includes recall processing. IHS’s foundation 

in the automotive industry reaches back to the advent of the automobile. Since then, IHS has worked with nearly all manufacturers 

to facilitate the recall process. 

IHS remains an industry leader in vehicle recall data processing 

and provides this service to most manufacturers today. The draft 

Improving Recall Tracking Act proposes to establish a national VIN 

database and driver information to aid in recall notification. In addition, the bill requires batch searching of the current 

SaferCar.gov. 

To be clear, we do not oppose the batch searching provision. We 

are here today to express our opposition to the proposed new database. As with any good idea, the private sector has already developed a highly effective and robust solution. So the legislation simply directs the Federal Government to attempt to replicate what already exists. If enacted, the legislation will limit innovation and 

use taxpayer funds to create a Federally-run database that would 

be less efficient and likely less capable than current market solutions. 

Today, the private sector’s real time data processing is accomplished utilizing best in class system technologies. Using processes 

developed over decades, companies like IHS process billions of 

records each year from tens of thousands of sources and thousands 

of file formats. Companies like IHS also employ thousands of people, many of whom are devoted to data processing to support recall. 

IHS acquires, standardizes, assembles data to create mailing 

lists to provide notice to affected consumers. We assist with the fulfillment of recall notices, measurement of campaigns through their 

completion. We provide real time reporting to our OEM customers. 

Further, following completion of recall notice mailings, we gather 

open recall information and provide that to the public through our 

subsidiary CARFAX and its vehicle history report service. 

This bill would require registration information to be gathered 

from each state. Automotive data companies use registration as 

just one data point and many proprietary sources to determine the 

best possible address to contact the owner of a recalled vehicle. As 

proposed, this database would not provide the same level of data 

that we can provide today in the private sector. Using private sector data solutions, we can identify and provide addresses for the 

vast majority of car owners. While there are a few exceptions, recall notification return mail rates typically range in the single digits. And the private sector continues to innovate further to reduce 

these numbers. Given the private sector’s success in providing notice, perhaps the focus should be placed on addressing why some 

notified consumers get their cars remedied and others do not. 

14 

In conclusion, the legislation, while well-intended, does not create a better solution than what exists today. In an era where Federal budgets are limited, this bill would direct NHTSA to attempt 

to duplicate a product and service that the market, using private 

capital, has created decades ago. The private sector continues to innovate, going well beyond the requirements of this legislation. 

I appreciate the invitation to testify, and look forward to your 

comments. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. 

[The prepared statement of Mr. LaFeir follows:] 

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Mr. BURGESS. The chair recognizes Mr. Lawrence for 5 minutes 

for a summary of your testimony please. 

STATEMENT OF CLEVELAND LAWRENCE, III 

Mr. LAWRENCE. Good morning, Mr. Chairman, Ranking Member 

Schakowsky, Ranking Member Pallone, and members of this subcommittee. And thank you for inviting me to testify at today’s hearing on the proposed Motor Vehicle Safety Whistleblower Act. My 

comments will be restricted to that bill only. 

My name is Cleveland Lawrence, III. I am a Co-Executive Director of Taxpayers Against Fraud and its sister organization, TAFEF 

Education Fund, which are two non-profit public interest organizations dedicated to combating fraud against taxpayer dollars 

through the promotion and protection of False Claims Act laws and 

qui tam provisions, which allow whistleblowers with evidence of 

fraud against government entities, to file suit on behalf of the government in exchange for financial rewards of at least 15 and up to 

30 percent of the government’s recovery if their suits are successful. 

My organizations also support the goals of the IRS, SEC, and 

CFTC whistleblower programs, which do not have qui tam provisions but still offer monetary rewards to whistleblowers in exchange for original information about significant tax, securities, 

and commodities fraud. 

I first joined TAF in 2008 and became co-executive director in 

2013. I am an attorney by training and spent the first 6 years of 

my career as an associate at the international law firm of Weil, 

Gotshal & Manges, where, among other things, my practice included defending whistleblower claims brought under the False 

Claims Act. Having examined whistleblower claims from both sides 

over the past 15 years, I can say without reservation that the Federal False Claims Act is the model statute for any effective whistleblower law or program. 

Since that law was overhauled in 1986, the False Claims Act has 

returned more than $40 billion to the U.S. Treasury. This result is 

in large part due to the significant role that whistleblowers have 

played in exposing fraud on the Federal fisc. For example, according to the U.S. Department of Justice, False Claims Act cases have 

recovered $5.69 billion for the Federal Government just last fiscal 

year alone, with nearly $3 billion of that total resulting from lawsuits filed by whistleblowers. The success of the False Claims Act 

over a near 30-year period should not and has not been ignored. 

More than half of the States have False Claims Act statutes now. 

And at the government’s urging, most of these laws mimic the Federal statute. 

Similarly, the IRS, SEC, and CFTC now have provisions that reward whistleblowers, all of which are modeled on the False Claims 

Act. While I applaud and fully endorse the effort to enact whistleblower legislation to make automobiles and road travel safer, I cannot support the proposed Motor Vehicle Safety Whistleblower Act 

in its current form, as it suffers from many of the deficiencies that 

have already been corrected under the False Claims Act, IRS, SEC, 

and CFTC arenas. I will discuss two of the primary weakness of 

19 

the bill, either of which is enough to significantly derail the program. 

First, the bill lacks guaranteed minimum rewards and gives the 

Secretary of Transportation unfettered discretion over the amount 

of an award up to a maximum to give to whistleblowers whose information resulted in monetary sanctions recovered by the government from an automobile manufacturer, parts supplier, or dealership, including the option to award no award at all. Decades of experience make clear that any whistleblower program will inevitably 

fail unless it guarantees minimum rewards for those who risk their 

careers to come forward. 

Before the False Claims Act was overhauled in 1986, it did not 

guarantee minimum rewards either. And the program did not effectively remedy fraud, bringing in only about $54 million dollars in 

the year before it was amended. But since then, we have seen the 

outstanding success of the statute, bringing in billions of dollars 

each year in the recent years. Whistleblowers are simply unable to 

risk their livelihood without the assurance of some compensation 

for doing so and reporting fraud or misconduct by their companies 

to the government. The SEC and CFTC, similarly, have guaranteed 

minimum rewards to whistleblowers for their information, as has 

the IRS. The concept of incentivized integrity works. But a whistleblower program that does not ensure minimum rewards can offer 

little more than an illusory promise. 

The second issue with the bill is the internal reporting requirement. I can think of no other effective law enforcement paradigm 

that requires that the target of the investigation is notified before 

the government can investigate. In my experience, whistleblowers 

often prefer to report internally. But since not all internal compliance programs are equal, they have to make the choice about 

whether or not reporting internally to the company will target 

them for retaliation. In addition, by requiring a whistleblower to 

report internally, the government effectively cuts off access to continued information about the misconduct within the company, giving the company an opportunity to coach further witnesses, destroy 

evidence, or otherwise thwart what could be an effective secret government internal investigation. 

I urge the committee to correct these two issues, because without 

these corrections the program is doomed to failure. I am happy to 

answer your questions. Thank you. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. 

[The prepared statement of Mr. Lawrence follows:] 

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Mr. BURGESS. Mr. Wallace, you are recognized for 5 minutes for 

your testimony. Thank you. 

STATEMENT OF WILLIAM C. WALLACE 

Mr. WALLACE. Good morning, Chairman Burgess, Ranking Member Schakowsky, and members of the subcommittee. 

I am Will Wallace, a policy analyst for Consumers Union, the advocacy arm of Consumer Reports. We are an independent, non-profit organization that works with consumers and for consumers for 

a fair, just, and safe marketplace, and to empower consumers to 

protect themselves. Consumers Union and Consumer Reports have 

fought for decades to make cars safer and hold companies accountable for the products they sell. We have pushed for effective rules 

and laws and for safety features such as seatbelts, air bags, and 

electronic stability control. 

Our auto test center works every day to evaluate safety technologies. And we communicate with millions of consumers to help 

them make informed choices and stay safe. We appreciate the opportunity to testify. 

Today’s hearing is timely, given the news lately about auto safety 

and corporate wrongdoing. The Federal settlement with General 

Motors over ignition switches linked to at least 174 deaths was 

very disappointing because it didn’t nearly go far enough to hold 

auto companies accountable for hiding the truth. Right on its heels 

came the news that Volkswagen had cheated on emissions control 

testing for some 11 million diesel vehicles and covered it up. These 

news items are sending shock waves through the industry, our government, and the public. The resulting erosion of confidence can’t 

be overstated. And lawmakers need to take action to address this 

corporate accountability crisis. 

The discussion draft and bill before you today attempt to address 

pieces of the problem. One, the Improving Recall Tracking Act aims 

to tackle low recall completion rates, while the other, the Motor Vehicle Safety Whistleblower Act, seeks to root out concealed defects. 

While we are pleased that the subcommittee is pursuing these worthy goals, Consumers Union believes that the two proposals fall far 

short both in terms of meeting their objectives and in terms of improving the flawed system that is supposed to ensure safety defects 

are identified and repaired before people get hurt. 

The GM fiasco, along with crises involving defects in Toyota, 

Takata, and Chrysler products among others, made clear that auto 

companies must do far more to ensure their vehicles are safe. And 

NHTSA must do far more to hold auto companies accountable. Yet, 

the drafts before the subcommittee today are strikingly limited in 

their ambition. 

The Improving Recall Tracking Act could possibly help companies reach owners of older vehicles in case of a recall if it were fully 

funded. But the bill doesn’t authorize that funding, despite requiring NHTSA and the States to carry out a substantial amount of 

new work. NHTSA, in particular, needs to be able to hire more 

staff to protect the public the way we all expect, not have them 

stretched more than they already are. 

Similarly, the Whistleblower Act could incentivize auto industry 

employees to give NHTSA information about concealed defects. 

30 

Just imagine how much suffering could have been prevented if a 

GM engineer had reported the flawed ignition switch to NHTSA in 

2006 or 2007. However, we are concerned the bill may not be as 

effective as it could be, primarily because of the lack of an established minimum award that at least covers the loss of earnings a 

whistleblower could face by sacrificing his or her career. 

More broadly, though, the discussion draft and bill today don’t do 

nearly enough for consumer safety. Instead, we urge you to take up 

bolder legislation, such as H.R. 1181, the Vehicle Safety Improvement Act. That bill would address shortfalls in current law, such 

as NHTSA’s inadequate civil penalties authority and the loophole 

that allows dealers to sell recalled used vehicles before they are repaired. In addition to these measures, Consumers Union also encourages the enactment of a criminal penalties provision to deter 

executives from hiding defects. 

The bill would strengthen NHTSA by authorizing the additional 

funding it badly needs, giving it imminent hazard authority like 

CPSC and FDA have, and making sure it receives more detailed information from manufacturers through early warning reporting. 

The bill would empower consumers by giving them free access to 

more safety information and by making NHTSA’s existing databases, which can be clumsy, confusing, and hard for an ordinary 

consumer to use, more timely and more readily searchable. The Vehicle Safety Improvement Act would create an auto safety system 

that is proactive, identifying defects before they reach epidemic 

proportions. And we urge members to advance it. We also urge 

members to create a strong safety title for a possible highway bill. 

In addition to requiring that rental car companies fix recalled vehicles before they offer them to consumers, as the Senate transportation bill does, such a safety title should include the needed reforms just outlined. Thank you. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. 

[The prepared statement of Mr. Wallace follows:] 

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Mr. BURGESS. Mr. Karr, you are recognized for 5 minutes for 

your testimony please. 

STATEMENT OF SHANE KARR 

Mr. KARR. Thank you, Mr. Chairman, Ranking Member 

Schakowsky, Ranking Member Pallone. I appreciate the opportunity to testify on behalf of the Alliance of Automobile Manufacturers today. 

I know that our time is limited. And my complete statement is 

submitted for the record. So I will limit my remarks here and try 

to focus on the big picture. You have asked me to testify about 

these two—the discussion draft and a bill today. Let’s talk first 

about the Improving Recall Tracking Act. Auto manufacturers are 

committed to keeping their products safe. And when a safety defect 

is identified, we want to undertake a recall. And we want all of the 

recalled vehicles to be repaired. 

There are at least two challenges to completing repairs on recalled vehicles. One, of course, is consumer motivation. In this 

country, consumers make the choice whether or not to get their vehicles repaired. We want them all to get their vehicles repaired. We 

urge them to get their vehicles repaired. You all have done that 

from the dais over the course of the last couple of years. But, at 

the end of the day, consumers make that choice. 

In an effort to sort of understand why people wouldn’t get their 

vehicles repaired, my CEO, when he was testifying in front of the 

committee earlier this summer, noted that we were undertaking 

the first of its kind comprehensive study into consumer motivations. Global Automakers and the National Automobile Dealers 

ended up joining us. And we have been working together. And, as 

Mr. Bozzella stated, we are close to wrapping that up and look forward to briefing you all. We have actually been in touch about setting up a briefing for you all next month. 

But putting consumer motivation aside, we know and you all saw 

over the last year or two that reaching all consumers in the first 

place is a significant challenge. It just is. One of the great things 

about the U.S. is we are a highly mobile economy. People move at 

the rate of about 17 percent a year. NHTSA, in analyzing vehicle 

completion—recall completion rates, has said that for those new vehicles in the sort of zero to 4 year-old time frame, about 83 percent 

of those get repaired. It is a very high percentage. But as soon as 

you start tracking further out, the completion rate numbers fall off 

dramatically. 

Five to ten years, 44 percent completion rate. Over 10 years, 15 

percent completion rate. At least part of the explanation for that 

is the challenge associated with actually reaching subsequent owners of vehicles. Mr. LaFeir’s testimony is terrific. My companies, I 

think all of them probably use his service to contact consumers. 

But in reading his testimony, they admit that part of the problem 

is there is not uniformity among the states in the records they keep 

with regard to registration, how quickly those are updated. That is 

part of the reason why his company is so effective and why my 

companies use it is because they reach all these different data 

points beyond registrations so that we can notify consumers. The 

draft not only requires this information to be submitted into a naVerDate Nov 24 2008 12:20 Mar 01, 2016 Jkt 037690 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-78 CHRIS
39 

tional VIN database that would be accessible for recall purposes, 

but it effectively standardizes the information that would be collected and the timetables. 

So it would, in fact, ensure that when we go to undertake a recall, we have a comprehensive set of timely contact information to 

work from and try to reach these owners of older vehicles who are 

still required to register those vehicles in the States. My testimony 

notes some other technical issues with the bill. But I think from 

the big picture standpoint, that is the issue that we are focused on. 

And it’s worthy of further consideration. 

With regard to the Motor Vehicle Safety Whistleblower Act, I 

would say just very briefly, that bill was introduced in the Senate 

last fall. The Alliance immediately reached out to staff on both 

sides of the aisle and Members. That bill had very strong bipartisan support. We expressed our concerns and worked through 

them. I never heard, frankly, in that time the issues that are being 

raised here today. That bill obviously passed by unanimous consent 

in the Senate. And we wouldn’t object to you all taking it up and 

passing it over here. And with that, I will let myself open for questions. 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. 

[The prepared statement of Mr. Karr follows:] 

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Mr. BURGESS. It occurs to the chair that I omitted to announce 

to the subcommittee that members, pursuant to committee rules, 

all members’ opening statements will be made part of the record. 

And then I do want to thank all of you for your testimony this 

morning and sharing your observations with us. We will move into 

the question portion of the hearing. I will start by recognizing myself for 5 minutes. 

And, Mr. Karr, let me come back to you. You mentioned in your 

testimony that the Auto Alliance, joined by the Global Automakers 

and the National Automobile Dealers Association, announced that 

it was conducting the study on what motivates consumers to have 

their recalled vehicles remedied and you mentioned that you were 

going to be having a briefing in the near future. 

Can you pull back the curtain just a little bit and share with the 

subcommittee this morning some of the insights you may have 

gained as to what motives a consumer to have a defect remedied? 

Mr. KARR. I would like to be able to do that, but I just saw the 

preliminaries myself. And, you know, I wouldn’t want to 

mischaracterize anything off the top of my head. We will schedule 

a full briefing and get the folks who actually conducted the survey 

in here as well, so you will all have the opportunity to ask them 

questions as well. 

I guess one thing that is relevant to this hearing that we learned 

is that the vast majority of people who knew that they had had a 

vehicle recalled within the past 2 years, the vast majority of those 

people knew because they were contacted by the manufacturer. 

Even more than we expected. Given all the news media and social 

media and everything else, the vast majority of people—— 

Mr. BURGESS. Let me ask you a question about that if you are 

at liberty to answer it. So they had already been contacted. Had 

they done the follow through to actually schedule an appointment 

or had their vehicle defect remedied at that point? 

Mr. KARR. Remember, part of the reason for doing the survey 

was to find out really why people who didn’t get their vehicles repaired, you know, why they didn’t—why that didn’t happen. So we 

talked to a lot of people who had gotten their vehicles repaired. We 

talked to a fair number of people who intended to get their vehicles 

repaired in short order. And, interestingly, there was a group of 

people who said, ‘‘I know my vehicle is under recall, but I don’t intend to get it repaired.’’ That was a small minority of the folks that 

we talked to. But, yes, we talked to all of those people. 

Mr. BURGESS. Well, this is, of course, with other hearings into 

the air bag issues, one of the things that has really concerned the 

subcommittee; how to get the word out to people to get their vehicles repaired, and the very dangerous situation that may exist in 

some vehicles. 

Apparently the older the vehicle, the greater the risk. And the 

real problem of once you are on the third or fourth owner of a vehicle, it becomes very difficult to track them down. And then, as you 

point out, the compliance rate may be lower. You would think with 

a severe safety defect, something that could blow up in your face, 

your family’s face, you would want it fixed, and it is a little concerning that we haven’t been able to do better with that. 

47 

I am going to assume, and correct me if I am wrong, that the 

manufacturers themselves, we can legislate all we want up here, 

but is there any place for the manufacturer placing an incentive 

out there before the consumer public, hey, we would like to see 

your vehicle in here and we will make it worth your while to do 

so, half price on an oil change or vacuum the floor mats. Are there 

incentive programs that are being looked at? 

Mr. KARR. Yes, I think that there actually are even examples of 

incentive programs that have been undertaken by a couple of my 

members surrounding the recent recalls. So, absolutely, I think 

that that is something to look at. 

Interestingly enough, for a lot of consumers, they apparently 

have concerns if they bring their vehicle in to be recalled, that they 

will be upsold on other things. So part of this may be assuaging 

those concerns going forward. There are a lot of different reasons. 

And it will be interesting, I think you all will find it interesting to 

unpack why people do or don’t do what they do. 

Mr. BURGESS. Well, we anxiously look forward to those briefings 

and perhaps have an opportunity to have you back and discuss 

those. You mentioned in your testimony, the manufacturers are 

committed to keeping their products safe. And you believe that, 

right? 

Mr. KARR. Absolutely. 

Mr. BURGESS. And, Mr. Bozzella, I spent my productive years in 

the healthcare industry, and we talked about something in the 

healthcare industry called continuous quality improvement. You all 

do that in the manufacturing process. Is that just a matter of 

course? 

Mr. BOZZELLA. Yes, it is. 

Mr. BURGESS. And it just seems like it would fit in a culture of 

continuous quality improvement that if someone sees something 

that is not right, you would want them to bring it forward. I can’t 

imagine a culture where an employee would say this is going to be 

a real problem. If I just hang onto this for a while, it might be a 

very valuable lawsuit for me in the future. Nobody wants that kind 

of environment, do they? 

Mr. BOZZELLA. No. No. You are exactly right. And I think the key 

there is not only to create that environment but to continue to enhance and develop it through more training, hotlines, both internal 

and third-party hotlines, the kinds of things that I think you are 

hearing our members’ companies are doing. I think it is critical. 

Mr. BURGESS. Great. Thank you. My time has expired. The chair 

will recognize the ranking member of the subcommittee, Ms. 

Schakowsky, 5 minutes for your questions, please. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. Mr. Karr, with all 

due respect, if Ford or GM said to their stockholders, you know 

what, consumer motivation just isn’t there. This is a free country 

and people are free not to buy our cars. I am having to assume that 

in marketing automobiles, which you can hardly turn on the television, it is either a drug ad or it is a car ad, that consumer motivation is deeply researched and figured out and a lot of money is 

spent to do that. 

So don’t you think that if the manufacturers were really serious 

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48 

search. But this idea that, well, consumers, they just don’t really 

want to do it. Really? They want to drive unsafe cars? 

Mr. KARR. So, I absolutely agree with you that we need to, and 

I think my companies are very clearly demonstrating, and actually 

one of my comments, I should say, in the testimony to the draft bill 

is actually that, the way the draft bill is written, it actually only 

would allow us access to that database for the owner notification 

letters that are required under Title 49. And my guys are doing 

kind of creative and innovative things to reach out and motivate 

consumers. 

And so we would like you all to consider allowing us to use contact information for these more creative means. Having said that, 

I do just want to say that the owner notification letters, they are, 

NHTSA fairly strictly lays out for us what we can say. 

Ms. SCHAKOWSKY. I get them. I get it. And I get them. And there 

has to be a better way. And I wanted to ask Mr. LaFeir, one of the 

things that we know is that nearly 20 percent of recalled cars are 

never repaired, recall completion, 44 percent for vehicles 5 to 10 

years old, 15 percent for vehicles over 10 years old. And, in fact, 

the average age of cars on the road is 11.4 years. 

So what can we do? I know you have this private sector database 

which in my testimony I said I thought, it is sort of unusual for 

me, I am saying let’s not have a government solution, let’s have a 

private sector solution, sort of a reversal here. Anyway, so how do 

we get to the drivers of older cars? 

Mr. LAFEIR. I think we have good tools to get the contact and 

to get the notification out. I think the motivation changes as the 

vehicles get older. I think data and data analytics are advancing 

to the point where we can probably put more energy into understanding are there particular groups that are behaving differently 

than others? And that may be an area to focus on. 

Ms. SCHAKOWSKY. OK. Mr. Lawrence, this is speculation but it 

seems to me since Volkswagen quite deliberately built into their 

cars this fraudulent emissions switch, whatever they call it, do you 

think that if a whistleblower internally had said, oh, this is really 

bad and you have got to fix it, that that would have done the trick? 

Mr. LAWRENCE. Certainly not. In our experience, most whistleblowers actually do report the misconduct of their company up the 

chain of command and, generally speaking, only contact the government after they have suffered the retaliation from the company 

for bringing their concerns to management. 

The False Claims Act takes the exact opposite approach and does 

not require whistleblowers to bring their information directly to the 

fraud feasors. Instead, it requires whistleblowers actually to submit 

their information under seal and only provide it to the government 

so as not to tip off the target that the government might be investigating potential wrongdoing or fraud. 

Ms. SCHAKOWSKY. So it is possible that this requirement could 

actually make cars more dangerous in the sense that it would require this internal communication? 

Mr. LAWRENCE. It certainly adds another step to the process of 

getting the information to the appropriate government officials. 

And that delay could certainly result in a more dangerous environment. 

49 

Ms. SCHAKOWSKY. One quickie for Mr. Wallace, the limit on violations and civil penalties for violations, it seems $35 million for 

GM was too little. What do you think we should do? 

Mr. WALLACE. Well, I think we desperately need to raise those 

in order to provide an effective deterrent against corporate wrongdoing. Especially because we just have to make sure that this is 

not the cost of doing business. These penalties cannot be considered 

merely the cost of doing business. It must be a real deterrent. 

Ms. SCHAKOWSKY. Thank you. I yield back. 

Mr. BURGESS. The gentlelady yields back. The chair thanks the 

gentlelady. The chair recognizes the ranking member of the full 

committee, Mr. Pallone, 5 minutes for questions, please. 

Mr. PALLONE. Thank you, Mr. Chairman. While this is a hearing 

on legislative initiatives relating to safety, our committee has direct 

oversight responsibilities regarding both clean air and deceptive 

practices. And I would be remiss if I didn’t bring up the following 

issue. As you know, last week, the EPA issued a notice of Clean 

Air Act violations to Volkswagen and its related companies stating 

that Volkswagen had manufactured and installed defeat devices in 

certain model year cars that, ‘‘bypass, defeat, or otherwise render 

inoperable elements of the vehicle’s emission control system.’’ 

Volkswagen has not denied the EPA’s assertion so far. In fact, the 

EPA has said Volkswagen has admitted it designed and installed 

defeat devices in these vehicles. 

In my opinion, to think that one of the world’s biggest and most 

established automakers deliberately set out to perpetrate this kind 

of scam on consumers is mind boggling and an outrage that harms 

both consumers and producers. On the one hand, we have consumers who trusted that Volkswagen played by the rules and that 

purchased cars had the attributes the company said they had. Dare 

to learn the truth about clean diesel was one of Volkswagen’s advertisements. The reality appears to be that its diesel isn’t clean 

and the ads are not true. 

Nearly half a million U.S. consumers and millions more around 

the world have been lured by the idea of a more efficient, less polluting fossil fuel vehicle that now looks to be neither. And those 

people who are now saddled with vehicles that if repaired, and I 

am not sure that is the right word, probably won’t meet the fuel 

economy standards that these consumers thought they were paying 

for. And the cars, themselves, have probably lost a tremendous 

amount of their resale value. 

On the other hand, you have Volkswagen casting doubt on the 

industry as a whole. The company hasn’t just harmed itself, it has 

harmed the entire industry. Volkswagen’s actions, if everybody is 

wondering whether Volkswagen is the only one with this problem. 

So to that end, EPA released a letter being sent to vehicle manufacturers notifying them that the agency is adding new evaluations 

designed to find potential defeat devices. 

Mr. Bozzella and Mr. Karr, what do you say to the American consumer, and how do we ensure that they are compensated not just 

for the economic loss, but for the fraud that appears to have been 

perpetrated on them? Let’s start with Mr. Bozzella and then Mr. 

Karr. 

50 

Mr. BOZZELLA. Ranking Member Pallone, thank you very much. 

As I mentioned a few minutes ago in my testimony, the very troubling facts that have come to light involving Volkswagen will likely 

have significant implications for the industry. So I do look forward 

to working with you and the committee discussing these issues as 

we go forward. 

Mr. PALLONE. Mr. Karr, can you respond? 

Mr. KARR. Thank you, Ranking Member. Unfortunately, I don’t 

have any more insight into the facts than have been publicly recorded. I think this is a very unfortunate situation. Volkswagen is 

a company that has shown its commitment to the American market, including producing vehicles in the United States. But these 

allegations are not good. And it will clearly have ramifications 

going forward, as it should. 

Mr. PALLONE. Thank you. Mr. Wallace, representing Consumers 

Union, the policy division of Consumer Reports, would you care to 

comment? 

Mr. WALLACE. Yes. This is a very serious, calculated violation of 

the law. We at Consumer Reports, we pulled our recommendations 

of the diesel versions of the Passat and the Jetta. And our CEO, 

Marta Tellado, recently called for the company and the government 

response to this betrayal to be significant enough to right the 

wrongs that have occurred and to bring true justice to the consumer, because this is just that egregious. 

Mr. PALLONE. It appears to be totally intentional. That’s the 

point. 

Mr. WALLACE. Exactly. 

Mr. PALLONE. That is the most important point. I don’t know 

what you say to people at Consumer Reports who are duped into 

recommending some of these cars to the public and how you convince all of us and our constituents that Volkswagen is an anomaly 

and that we can afford to trust the industry at all. Mr. Wallace, 

did you want to comment? The concern now is that this isn’t just 

one car manufacturer, there might be others. 

Mr. WALLACE. Well, I work here in our policy office in D.C. But 

I know that we have a team of committed engineers and technicians up at our test track. And I can tell you that as an organization, Consumer Reports will absolutely put pressure on the manufacturer to make sure that it makes things right. 

Mr. PALLONE. All right. Thank you very much. Thank you, Mr. 

Chairman. 

Mr. BURGESS. The chair thanks the gentleman. The chair would 

note to the gentleman that his concerns are not—they are actually 

shared by both sides of the dais on the subcommittee as to where 

the appropriateness of this investigation is. And it is a work in 

progress. So watch this space. Mr. Butterfield, you are recognized 

for 5 minutes for questions please. 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. And I 

apologize for being in and out of the room. But the developments 

this morning regarding the Speaker’s impending resignation has 

just caused a lot of telephone traffic in my office both from the 

media and from constituents. And so I have been back and forth. 

But, Mr. Chairman, one of the laudable goals of the VIN lookup registration legislation is to enable manufacturers to reach more 

51 

owners of recalled vehicles so that more vehicles will get repaired. 

And so I would like to focus my questions today on the rental car 

safety bill that I introduced with the support of Ranking Member 

Schakowsky and Congresswoman Capps, H.R. 2198. Companion 

legislation passed the Senate with bipartisan support as part of the 

Senate’s highway bill. 

The legislation will help maximize the number of recalled cars 

that get fixed. That bill is the Raechel and Jacqueline Houck Safe 

Rental Car Act, which is supported by the rental car industry. Yes, 

it is. Consumer organizations, General Motors, Honda, and others. 

That is very impressive. It would ensure that rental car companies 

fix recalled vehicles in their fleets before, before renting or selling 

them. And so to you, Mr. Wallace, what is the Consumers Union’s 

position on 2198 if you all have one? 

Mr. WALLACE. We strongly support the bill. We think it is well 

past time that it passes this Congress and close this safety gap 

that exists. We would also note that it has very, very broad support. And it is only now, it is just up to Congress to get it through. 

Mr. BUTTERFIELD. Would it be correct to say that this legislation 

is critical and it is important? 

Mr. WALLACE. Yes. 

Mr. BUTTERFIELD. All right. And to you, Mr. Karr, does your organization support 2198? 

Mr. KARR. The Alliance does not support the bill as introduced. 

We have had numerous conversations with staff, primarily on the 

Senate side, where the counterpart originated, and proposed a 

number of possible changes to address our concerns, and would be 

happy to meet with you all and your staff. 

Mr. BUTTERFIELD. Can you quantify this for me? What percentage of recalled vehicles are subject to a do not drive warning? 

Mr. KARR. Subject to an actual do not drive, it is a small percentage, under 10 percent. 

Mr. BUTTERFIELD. That is what we have been informed, yes. Are 

there any Federal safety standards that dictate when manufacturers must issue the do not drive warning? 

Mr. KARR. There are not. However, manufacturers, when a manufacturer issues a recall, before they do that, that has to be basically approved through NHTSA. We submit the language and the 

proposal for the recall to NHTSA. And they review it and approve 

it before it goes out. 

Mr. BUTTERFIELD. Thank you. I am standing between my colleagues and votes on the floor. 

Mr. Chairman, I ask unanimous consent that two letters be submitted for the record, one from LKQ Corporation and the other 

from the American Car Rental Association and others. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BUTTERFIELD. In addition, Ms. Schakowsky, as she was leaving, asked that I present for the record a statement from the American Association of Motor Vehicle Administrators. I ask unanimous 

consent. 

Mr. BURGESS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BUTTERFIELD. Thank you. I yield back. 

52 

Mr. BURGESS. The gentleman yields back. The chair thanks the 

gentleman. The chair does want to thank the panel for being here 

this morning and for your time and the expert testimony that you 

have provided to us. 

Seeing no further members wishing to ask questions, I would like 

to take a moment to recognize the contribution of our clerk, Kirby 

Howard, who after many years of service to the subcommittee on 

the staff is leaving for new career opportunities. And we obviously 

wish him well in his future endeavors. 

And also before we conclude, I wanted to include the following 

document to be submitted for the record by unanimous consent, 

that will be easy, a letter on improving the Recall Tracking Act 

submitted by Experian. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. BURGESS. Pursuant to committee rules, I remind members 

they have 10 business days to submit additional questions for the 

record. I ask the witnesses to submit their responses to these questions within 10 business days upon receipt of the question. 

And, without objection, further proceedings of this subcommittee 

are adjourned. 

[Whereupon, at 11:00 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Everyone knows I’m from Michigan—the auto state—and that is something I take 

great pride in. Folks also know that I am disappointed that this committee has been 

forced to hold multiple hearings over the past few years on motor vehicle recalls. 

But even when facing these issues, I remain an optimist. I believe that cars are 

safer today than ever before and the data shows that. The new technologies that 

are being developed and deployed will make us even safer on the road. Today, we 

continue our work to keep families in Michigan and across the country safe on the 

roads by focusing on two bills to improve safety. 

The Motor Vehicle Safety Whistleblower Act goes great lengths to ensure that 

safety violations don’t go unreported. Almost fifteen years ago, in the wake of the 

tragic circumstances involving Ford-Firestone, I authored the bipartisan TREAD Act 

to get automakers to identify and fix defects earlier and remove flawed cars from 

the road immediately. While that law has prevented several safety issues from becoming serious disasters, the early warning reporting regime is greatly dependent 

on the commitment of the auto industry to make it a success. The safety incentives 

provided in the Motor Vehicle Safety Whistleblower Act are meant to help foster 

that commitment because as we know, reporting delays cost lives. 

The Improving Recall Tracking Act is another legislative proposal we will review 

today. With any recall, consumers must be notified of the defect so they can get 

their vehicles fixed. It is unacceptable that there continue to be vehicle owners that 

have not been notified of a defect or serious safety risk because they cannot be located. Currently, we have 50 different state systems to notify consumers of safety 

issues leading to unfortunate delays in getting lifesaving information out to the 

right people. I am also troubled that the challenge of notifying consumers could get 

worse as the development of new technology platforms enable owners to sell vehicles 

in nontraditional ways. 

Consumer notification is a key part of ensuring that the recall process works. 

During today’s review of the Improving Recall Tracking Act, I look forward to hearing about how the private sector is working with the auto industry to identify consumers affected by a safety recall. I also look forward to hearing how driver registration and vehicle identification numbers are kept up to date in databases maintained by manufacturers and commercial entities, and what considerations are 

being made to improve the consumer notification process. 

As I have said before, there can be no margin of error when it comes to vehicle 

safety. Lives are on the line—and the public deserves the peace of mind that they 

53 

are safe every time they get behind the wheel. I thank Chairman Burgess and this 

subcommittee for its continued commitment to protecting the driving public. 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

Thank you Mr. Chairman. Today we are discussing two bills related to automobile 

safety; one intended to help automakers more easily find the current owners of recalled cars and one intended to provide incentives for whistleblowers to submit safety defect information to the National Highway Traffic Safety Administration or 

NHTSA [NIT-suh]. 

While I appreciate the effort by this Committee to take action on auto safety, 

these measures fall short. 

According to NHTSA, more than 32 thousand people lost their lives on U.S. roads 

in 2014. Much more needs to be done to improve the system for detecting and reporting safety defects to NHTSA, and to reduce the number of defective cars that 

reach consumers in the first place. 

Earlier this year, Subcommittee Ranking Member Schakowsky and I, with a number of other members, introduced the Vehicle Safety Improvement Act of 2015 

(V.S.I.A.). Our bill would address a number of urgent auto safety issues. 

V.S.I.A. improves the Early Warning Reporting system by making more reported 

information public and requiring manufacturers to provide significantly more information about any fatality involving a safety defect. It includes imminent hazard authority for NHTSA, allowing the agency to expedite a recall order, and increases 

fines for manufacturers that violate vehicle safety laws. 

In addition, it will eliminate geographically limited regional recalls and require 

reviews of safety standards for back seat passengers and pedestrians. 

Regarding today’s two bills, I am concerned that they will have little impact on 

auto safety and divert scarce resources. I cannot support them as currently drafted. 

I hope that we can work together to ensure that these bills will truly improve 

auto safety. And I also hope that together we can take broader actions that will 

make a larger impact on auto safety. 

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