Obama admin wants bigger fines for failed safety recall disclosures

The Obama administration is now actively seeking an increase in fines levied against automakers for failed disclosures.

Following the series of events that can be described as no less than a media circus after Toyota was involved in a series of investigations stemming from both proven and unproven cases of unintended acceleration, the Obama administration has decided to push for changes to the way automakers are penalized for failing to disclosure safety risks.

The desire to increase the maximum possible fine stems from the case in 2010 when Toyota was fined the maximum possible amount of $16.375 million for each of two charges for failing to notify the National Highway Traffic Safety Administration of safety risks in their vehicles within the allotted time. David Strickland, head of NHTSA, as well as the Obama administration have voiced that the $32.425 million in fines was insufficient, and according to Reuters, both parties seek increases for future violations.

Strickland explained, "We feel it's high time the penalties are reflective of the size of the industry." Strickland's recommendation is being backed up with two different bills, ones in the Senate seeking a maximum of a $250 million penalty, as well as a competing House bill that does not include the increased civil penalties.

House officials argued that the Senate bill wasn't taking the right approach through additional mandates, but rather favored incentives for doing the right thing as opposed to added penalties for inaction.

Strickland admits that automakers operating in the U.S. have become more aggressive in looking into potential safety risks since the debacle that temporarily crushed U.S. sales of Toyota vehicles, but also argued that over time that may not continue to be the case.

Currently, U.S. automakers have five days to notify NHTSA when it is aware of a safety defect before facing potential fines.