[Congressional Record Volume 145, Number 23 (Tuesday, February 9, 1999)]
[Senate]
[Pages S1402-S1403]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       THE NATIONAL SALVAGE MOTOR VEHICLE CONSUMER PROTECTION ACT

 Mr. LOTT. Mr. President, I want to talk about America's used 
car buyers. They are looking to this Congress to take prompt action on 
legislation that will curtail the fraudulent practice of ``title 
washing.'' A deceptive scheme that costs consumers and the automobile 
industry over $4 billion annually and places millions of structurally 
unsafe vehicles back on America's roads and highways.
  Last week I brought to your attention a January 8, 1999, Washington 
Post article entitled ``Wrecked Cars, On the Road Again.'' This is 
scary--government crash test cars--deliberately destroyed cars--are 
being rebuilt and sold to unsuspecting consumers as undamaged vehicles. 
One of these crash cars could have been next to any one of us on the 
way to work today.
  I ask my colleagues to think about how they would feel if their son 
or daughter unknowingly purchased a NHSTA crash test car. Aside from 
the significant monetary loss, buyers of these previously totaled cars 
or trucks are also unwittingly risking life and limb. As well as 
everyone with whom they share the road.
  As my colleagues are well aware, Senator Ford and I coauthored 
legislation in the 105th Congress with the intent of putting dishonest 
rebuilders out of business. Our bill would have provided greater 
disclosure to potential used car buyers by establishing national 
uniform definitions for salvage, rebuilt salvage, nonrepairable, and 
flood vehicles. As everyone knows, especially the crooks and charlatans 
who prey on unsuspecting victims, that it is the lack of uniformity and 
the inconsistencies in state automobile titling procedures that allows 
title laundering to flourish unabated.
  Mr. President, the provisions of the National Salvage Motor Vehicle 
Consumer Protection Act mirrored the recommendations of the Motor 
Vehicle Titling, Registration and Salvage Advisory Committee. This 
congressionally mandated committee, overseen by the U.S. Department of 
Transportation, included State motor vehicle officials, motor vehicle 
manufactures, dealers, recyclers, insurers, salvage yard operators, 
scrap processors, federal and state law enforcement representatives, 
and others. While I would like to claim credit for authoring the 
definitions in the title branding legislation, they were in fact based 
on the knowledge and experience of the Salvage Committee and the 
recommendations offered in their final report. So these are not my 
definitions, they are the expert advisory committee's definitions.
  Mr. President, too often Congress lets recommendations from 
commissions we mandate sit on a shelf gathering dust.
  Mr. President, I do not want this to happen here. Title washing is a 
pervasive problem. The salvage advisory group provided a wealth of 
information and recommendations to address this national problem. 
Congress needs to act.
  Aside from promoting the use of uniform definitions, the bill 
requires rebuilt salvage vehicles to undergo a theft inspection in 
addition to any required state safety inspection. These vehicles would 
also have a decal permanently affixed to its window and the driver's 
doorjamb to provide even greater disclosure. Equally important, the 
vehicle's brand would be carried forward to each state where the 
vehicle is retitled. And, the Vehicle Identification Numbers (VIN) of 
irreparably damaged vehicles would be tracked to prevent automobile 
theft.
  Contrary to the misrepresentations about this bill, it allowed states 
to adopt disclosure standards beyond those provided for in the bill. In 
fact, states would have had broad latitude to provide almost unlimited 
disclosure to their citizens. This important legislation merely created 
a basic minimum national standard while allowing states the flexibility 
to adopt more stringent regulations. It also did not create a federal 
mandate on the states as some had proposed. As my colleagues will 
recall, the Supreme Court held in New York v. United States [505 U.S. 
144 (1992)] that states cannot be forced by Congress to execute 
programs that should be administered by the U.S. government.
  Mr. President, Congress came very close to enacting title branding 
legislation last year. The original measure received the formal support 
of 57 of our colleagues in this chamber and a similar bill passed the 
House of Representatives with a vote of 333 to 72. Throughout the 
legislative process, a number of significant changes were made to the 
bill to address the concerns expressed by consumer groups and some 
state attorneys general. In a good faith effort, the following changes 
were included in the modified version of the bill.
  The percentage threshold for defining a ``salvage vehicle'' was 
lowered from 80 percent to 75 percent.
  The final bill included a provision allowing states broad latitude in 
determining which vehicles would be designated as ``salvage.'' The 
compromise permitted a state to maintain or establish a lower 
percentage threshold for defining a ``salvage vehicle.'' So if a state 
set its percentage threshold below the 75 percent level, it would still 
have been in compliance with the bill. Some consumer groups and state 
attorneys general advocated that states be able to set their thresholds 
as low as they desired. This bill would have allowed any state to do 
just that.
  A new provision was added that allowed states to cover any vehicle, 
regardless of age. This is referred to as ``older model salvage 
vehicle.''
  Another new provision in the legislation granted state attorneys 
general the ability to sue on behalf of consumers who are victimized by 
rebuilt salvage fraud and to recover monetary judgments for damages 
that citizens may have suffered.
  The bill's section on ``prohibited acts,'' replaced the House's 
``knowingly and willfully'' standard with a ``knowingly'' standard.
  Two new prohibited acts were included--one related to failure to make 
a flood disclosure and the other related to moving a vehicle or title 
across state lines for the purpose of avoiding the bill's requirements.
  In the original bill, conforming states were prohibited from using 
synonyms of terms defined in the legislation (i.e. reconstructed, 
unrebuildable, junk) in connection with a vehicle. The modified bill 
deleted this restrictive language, giving states increased flexibility 
to provide additional disclosures to their citizens regarding the 
damage history of vehicles.
  The compromise bill added a provision making it clear that nothing in 
the legislation would affect any private right of action under existing 
state laws. Let me say again that a citizen's ability to pursue private 
rights of action would have continued under the legislation.
  At the request of Senator Slade Gorton, the proposed federal criminal 
penalty provision was removed from the bill. As a former state attorney 
general, Senator Gorton was concerned that creating new federal 
penalties would unnecessarily increase the burden on an already 
stressed federal court system, especially in instances where existing 
state civil and criminal remedies would adequately address violations 
of the bill's titling requirements. Senator Gorton's concerns were 
recently buttressed by Chief Justice Rehnquist who recently complained 
about Congress' ``trend to federalize crimes that traditionally have 
been handled in state courts.'' While

[[Page S1403]]

the proposed criminal penalty was dropped, a provision authorizing 
civil penalties was retained.
  At the request of Sen. Ernest Hollings, a new provision was added 
concerning the Secretary of Transportation advising automobile dealers 
of the prohibition on selling vans as school buses.
  Again, these were significant changes aimed at achieving consensus 
and balancing the need for uniformity with the desire to provide states 
with reasonable and appropriate flexibility.
  It is also important to point out that the final title branding bill 
that passed the House with a bipartisan majority last October was 
strongly supported by state motor vehicle administrators. These are the 
very people responsible for implementing titling rules and procedures. 
If there is anyone that Congress should listen to on this topic, it is 
the state DMV directors. They have the most commitment to and 
significant knowledge and experience dealing with titling matters. 
Since they are on the front lines, these administrators know what works 
and what will not. Their only vested interest is to ensure that the 
people they serve in their states have an effective titling system. To 
that end, they have been working with the Department of Transportation 
and the Department of Justice to develop a National Motor Vehicle Title 
Information System that would provide titling offices around the 
country with accurate, reliable, and timely registration information.
  As I have said repeatedly, title branding legislation would 
significantly improve disclosure for used car buyers. It would close 
the many loopholes that exist by establishing uniform definitions. It 
would create national standards that would protect the safety and well-
being of consumers and motorists across America. Enacting this 
legislation would allow our sons and daughters to buy a used car 
without fear that they may be purchasing a totaled and subsequently 
rebuilt vehicle.
  For these reasons, I intend on introducing the National Salvage Motor 
Vehicle Consumer Protection Act as it passed the House last October. I 
have also solicited technical corrections from a number of interested 
and affected sources including the U.S. Department of Transportation.
  Mr. President, I ask my colleagues from both sides of the aisle to 
safeguard our friends and families from title fraud by formally 
supporting this legislation.
  With your help, Congress can put thousands of chop-shop owners and 
con-artists out of business and keep millions of structurally unsafe 
vehicles off our nation's roads and highways. Let us take quick action 
to keep our constituents from buying wrecks on wheels.

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