St. Louis Post-Dispatch, October 1, 2014

In dual victories for Ameren Missouri, Missouri regulators dismissed on Wednesday an overearnings complaint against the utility and a request from Noranda Aluminum to reconsider its case for a lower electric rate.

The Missouri Public Service Commission’s order denied the southeast Missouri smelter’s rehearing request in a case that began in February. The smelter initially sought a rate that would lower its $170 million annual power bill by about $50 million a year, but the state’s consumer advocate later proposed a compromise after the PSC indicated it would reject the original request.

Noranda and the Office of Public Counsel sought a rehearing so the PSC could more fully consider the compromise proposal, which would have reduced Noranda’s rates by about 16 percent rather than nearly 25 percent. A lower rate for Noranda would likely have led to higher rates for Ameren’s other customers.

PSC Chair Robert Kenney urged the parties to present their compromise proposal when hearings begin early next year on Ameren’s ongoing rate case.

“There is an opportunity in the rate case to present those intriguing proposals yet again and the parties are encouraged to do that,” he said.

Noranda Aluminum is Ameren Missouri’s largest customer, and it already pays a lower rate for electricity than other, smaller customers. Ameren asked the PSC in July to raise rates on all of its customers by 9.7 percent.

Noranda has argued it faces a liquidity crisis and that it needs a lower electric rate to conserve cash or it will be forced to close. In early September, it announced it would lay off 125 to 200 people over the next six months while it waited for the PSC to reconsider its rate request. A more favorable ruling, Noranda said, might allow it to save some of those jobs.

While Noranda initially argued it would be forced to close without a lower rate, aluminum prices have recovered in recent months as warehouse stocks and global production fell. Bloomberg reported Wednesday that consumption of the metal is expected to exceed production by 806,000 tons this year. Last month, Goldman Sachs upgraded Noranda to a “buy” rating from neutral, and its stock has risen by about 20 percent over the last three months.

The company said it “vigorously pursue” the public counsel’s compromise proposal during Ameren’s general rate case.

“Unfortunately, since rate relief from that path, if any, would not under normal circumstances be effective until June 2015 it will likely be too late for the 125 to 200 employees whose jobs will be lost based on the PSC’s decision,” Noranda spokesman John Parker said in an email.

The PSC also formally denied an overearnings complaint from Noranda and consumer groups that had the potential to lower bills for all customers. Commissioners last month indicated they were unconvinced Ameren had earned above its allowed return.

Consumer groups cited quarterly surveillance reports, which indicated the utility was earning above its allowed return on equity, or profit.

While the PSC and its staff did not dispute the figures, they said those reports measure earnings differently than a cost of service study conducted to set rates. Utility earnings sometimes rise above allowed earnings, but the PSC pointed out times in the last several years when earnings have fallen below the allowed rate of return.

The surveillance reports also don’t take into account ongoing spending, such as environmental controls at Ameren’s Labadie power plant and solar rebates. A more comprehensive study adjusts earnings for one-time costs such as abnormally hot or cold seasons.

“Failing to consider all relevant factors when adjusting a utility’s rates is condemned as single-issue rate making and is generally prohibited in Missouri,” the commission said in its order.

The commission also voted to keep the latest surveillance report confidential. Noranda and its allies had requested it be made public, which the PSC had done for past reports during the overearnings case. Now that the case is closed, though, “there is no reason to set aside the provision of the rule that makes the surveillance report highly confidential,” the PSC said in its order.

St. Louis Post-Dispatch, September 4, 2014

Missouri utility regulators want to limit the relationship between the companies they regulate and the payday lenders where some customers pay their bills.

A majority of the Missouri Public Service Commission expressed support for a new rule keeping utilities from using payday lenders as “authorized pay stations,” which are locations authorized by a utility to accept bill payments.

“There’s still a long way to go before we have a final rule,” said acting Missouri Public Counsel Dustin Allison, whose office advocates for utility customers before the PSC. “But the commission took a good step today in enhancing consumer protection.”

The commission’s staff last month recommended against a rule keeping payday lenders from acting as payment stations for utilities, concluding it wasn’t clear the PSC had the legal authority to do so.

But chairman Robert Kenney said on Wednesday that restricting utilities’ official use of payday lenders as pay stations is “good policy.”

“I do not think that it’s questionable whether we have the authority to do this or not,” he said.

The PSC still needs to approve an order initiating a rulemaking, which comes with a process of its own that requires further review and public comment. But commissioners’ support for a rule is a reversal from 2011, when they did not act on a proposal to restrict payday lenders as bill payment posts.

“I think we should roll up our sleeves, start drafting a rule and get it in place as soon as possible,” Commissioner Daniel Hall said.

Consumer advocates have railed against the industry for years because of high interest rates and the fees and penalties its short-term loans levy on borrowers in mostly poor neighborhoods. The public counsel’s office had proposed restrictions on the use of payday lenders as payment stations for utilities five years ago, citing concern that utility customers might be lured into a loan while paying their bill.

Utilities often contract with places such as grocery stores to act as bill-payment stations, but relatively few payday lenders are used.

Only four of 247 authorized Ameren Missouri pay stations are payday lenders, according to information submitted to the PSC. Laclede Gas uses five payday lenders out of an authorized payment network of 184, and Missouri American Water said only eight of its pay station locations are at payday lenders, less than 1 percent of its total network.

Laclede and Ameren did not respond to a request for comment, and Missouri American said it would comply with any PSC rules.

But the Missouri Energy Development Association, which represents the state’s for-profit utilities, said in comments submitted to the commission that the PSC had not received any complaints regarding authorized payday loan companies and a rule prohibiting their use as pay stations would amount to “a solution in search of a problem.”

Randy Scherr, executive director of the United Payday Lenders of Missouri, said it’s “a problem that simply does not exist” because his group’s member companies don’t extend loans to borrowers without a checking account.

“Those people who are walking in and cashing a check and paying their bills are doing it because they don’t have a checking account,” Scherr said. “They’re chasing after a ghost here.”

The commission still must decide what language to advance. Kenney endorsed a staff proposal that bars only payments from authorized lenders. The public counsel’s more restrictive proposal would bar payments from all payday lenders to utilities, whether they are authorized by the utilities as pay stations or not.

“At a minimum, they need to prohibit the practice of formally associating, of contracting with payday lenders,” said John Coffman, an attorney for the Consumers Council of Missouri. “When the utility’s logo is on the door, on the wall, I think there’s a sense that this is a safe place to do business.”

AG Letter to Ticketmaster 8-8-14

National Consumers League, August 19, 2014

With fall concert series being announced, the NFL season ready to kick off, and MLB playoffs just around the corner, it is a great time to be a live music and sports fan. However, ticket sellers such as Ticketmaster, artists, sports teams, and venues do not always have consumers’ best interests at heart. NCL wants to make sure fans have the information they need to make the best ticket buying decisions they can.

Below are just a few of the anti-consumer practices we want consumers to be aware of.

Restricted Ticketing

A growing number of artists, including Eric Church, Arcade Fire, and The Black Keys are using credit card entry or “paperless” ticketing this summer and fall for the most desirable seats in the house. Garth Brooks, who is going back on the road for the first time in 12 years, is using restricted ticketing for his upcoming tour.

This ticketing system replaces a paper ticket, a PDF, or a print-at-home ticket with the original purchaser’s credit card and photo ID and the tickets are non-transferable.  If you purchased tickets to your favorite concert and then had to change your plans because of a work or family emergency, you are now stuck with tickets you cannot use, resell, or even give away. And if you are one of the 30 million Americans who do not have a credit or debit card, you won’t be able to purchase this type of ticket in the first place.

In addition, because restricted ticketing may only apply to the best seats, it decreases the supply of tickets available on the secondary market, inevitably leading to higher prices.

Undisclosed Price Floors

Often times the secondary market can provide consumers with great deals on sports tickets. Unfortunately, some ticket resale websites, such as Ticketmaster’s TicketExchange, set an arbitrary minimum on the price of tickets. For example, the Buffalo Bills TicketExchange sets its price floor at face value, even for pre-season games. For the pre-season game against the Detroit Lions, a ticket in Section 139 with a face value of $58 can only be listed on TicketExchange for $58, while SeatGeek showed other resale sites selling tickets for as low as $3. And of course, there is no notice to unsuspecting fans that such a price floor exists.

In addition, last year, the New York Yankees and Los Angeles Angels of Anaheim opted out of Major League Baseball’s deal with StubHub because the resale website would not allow the teams to set a price floor.

Deceptive Websites

For too long, unscrupulous ticket resellers have been taking advantage of unsuspecting consumers and deceiving consumers into believing they are purchasing a ticket from the box office website or official primary ticket seller at face value. These resellers use Internet ads or other advertising, along with pictures of the venue and descriptions such as “official” tickets, to dupe consumers.

The Federal Trade Commission and the Connecticut Attorney General recently settled a $1.4 million case with a group of ticket resale websites for violating the FTC Act and the Connecticut Unfair Trade Practices Act.

This is a strong step in the right direction towards protecting consumers from unfair practices, while still allowing good actors in the secondary market to offer consumers choices and flexibility when purchasing live event and sports tickets.

To help fans avoid these, and other common, ticket-buying pitfalls, the National Consumers League (NCL) developed the following tips and suggestions.

1.  Read the Fine Print: Artists are increasingly selling restricted tickets, also known as paperless or Credit Card Entry tickets, which require the buyer to show up at the stadium and present the purchasing credit card and photo ID. The fine print indicates these tickets are nontransferable and cannot be given away as gifts or resold. Consumers can easily miss this important information unless they pay close attention during the ticket buying process.

2.  Look into Presales: Popular artists, venues, and ticket vendors tend to allocate large blocks of tickets to fan club members, VIPs, premium credit card holders, and personal acquaintances, leaving only a small portion of tickets to the general public. For example, a 2011 Justin Bieber concert in Nashville, only made 1,001 out of 14,000 seats available to the general public.

3.  Beware of Hidden Price Floors: When purchasing resale tickets on secondary sites, check multiple sources to make sure you get the best price. Some teams and ticket vendors dictate the minimum price that tickets can be sold for, preventing consumers from buying tickets at the cheapest price possible.

4.  Use Reliable Sellers: If you’re unsure whether a company is legitimate, check its ratings with the Better Business Bureau. Also be sure to be certain as to whether you are buying tickets from the box office, official ticket agent, or a reseller. Some ticket resellers hide the fact that they are a reseller or even pose to look like the official ticket agent. If purchasing from a ticket broker, check to see if it is a member of the National Association of Ticket Brokers, whose Code of Ethics requires members to adhere to basic consumer protections. Be especially careful buying tickets from Craigslist or resellers on the street since they offer no refund guarantees.

5.  Check your ticket vendor’s guarantee policy: For example, websites like StubHub, TicketExchange, Ace Tickets, and members of the National Association of Ticket Brokers guarantee every ticket sold on their sites and will replace them or provide refunds to consumers if the event that they receive the wrong tickets, their tickets are invalid, or an event is cancelled.

6.  Buy with a Credit Card: Regardless of where you buy tickets, be sure to use a credit card so you can dispute any unfair or unauthorized charges. Before entering your credit card information online, double check the company’s URL to ensure you don’t get duped by an imposter and be sure the site has “https://” at the beginning of its address.

7.  Check if the Price Includes Additional Fees: Unlike airline tickets, which are now required by law to disclose all taxes and additional fees upfront, the ticket price listed at the start of the purchasing process will likely not be your final price. If you are shopping between multiple websites to compare prices, make sure you know if you are comparing ticket prices that include fees.

St. Louis Post-Dispatch, August 5, 2014

If you rely on Ameren Missouri for electricity, as most people in the region west of the Mississippi do, here is what you need to know about the utility monopoly’s months-long rate battle with its largest customer:

One way or another, you are going to pay more.

In March, Noranda Aluminum, which operates a huge smelter in New Madrid in southeast Missouri, said it needed lower rates to stay competitive in a depressed aluminum market. Manufacturing aluminum requires tremendous amounts of electric power; industry-wide, it is estimated that electricity represents about a third of the cost of an ingot of aluminum.

When Noranda made its rate request, it also asked the Public Service Commission to punish Ameren for earning more than the investor-owned monopoly’s regulated return on investment.

The PSC could rule on one or both cases any day.

The simple math is that consumers lose if Noranda wins. Also, consumers lose if Ameren wins. In Missouri, consumers lose no matter what because the game is entirely rigged against them.

The dispute over whether Ameren has earned more than the 9.8 percent profit established by the PSC makes that painfully clear.

The PSC sets that target return on investment whenever a utility seeks a rate hike, by balancing the company’s need for growth and profit with consumers’ need for affordable, consistent rates for electricity. Because Ameren is a monopoly, the PSC’s role is to provide the pressures that might otherwise be provided in a competitive environment. To keep Ameren honest, the company is required to file “surveillance reports” to show whether it is earning more than is allowed.

But the PSC has determined those reports are confidential. So, for several months, a select number of attorneys and others involved in the previous rate case have known what the reports show: That Ameren has over-earned by tens of millions of dollars over the past year.

Those attorneys couldn’t talk about it, however. They asked the PSC to release the reports and the PSC said no. Ameren claimed it wasn’t over-earning, but it also sought to keep the reports confidential.

Here’s how Noranda described the situation in its opening statement in the over-earnings case:

“What is the point of requiring surveillance monitoring reports … if, when those reports evidence over-earning, the commission does nothing about it?”

Late last month, just before the PSC’s hearing on Ameren’s over-earning was to begin, a judge finally opened up the reports. From July 2012 to March 2014, they show a consistent pattern of Ameren earning above its regulated rate of return. It can be argued that money rightfully belongs to Ameren’s consumers, not its shareholders. The over-earning, depending on who is doing the counting, is currently somewhere between about $25 million and $60 million a year.

But it gets worse for consumers.

The standard for showing whether those figures actually constitute the legal definition of over-earning involves a complicated and expensive process. Ameren employs lots of lawyers and experts. The staff of the PSC, and the Office of Public Counsel, which is supposed to represent consumers, don’t have the resources to complete.

Meanwhile, Ameren’s next rate increase request, in which a full analysis of its books will take place, is about to start. Worth noting: Ameren has been successful in increasing its rates by more than 40 percent in the past six years.

The way the system is set up right now, Ameren has no incentive to not gouge consumers because the regulators are too weak to do anything about it. The Legislature could fix that, but Ameren also employs lots of lobbyists and makes lots of campaign donations.

All of that explains why consumers are supporting what amounts to a massive subsidy to Noranda. The aluminum company is the only consumer, it seems, with deep enough pockets to take on Ameren at either the PSC or in the Legislature.

In March, when the two cases were filed by Noranda, we wrote: “Our hope is that the PSC dials back the gluttony of both behemoths.”

The PSC could still do precisely that. A group of consumers has negotiated a possible settlement to Noranda’s request to decrease rates that would allow a subsidy of about $21 million a year for the next five years, subject to Noranda maintaining its job base in southeast Missouri.

That’s much less than Noranda asked for. Even so, the subsidy would raise the average residential consumer’s rates by less than 1 percent. But if Ameren’s No. 1 customer folded up shop and left Missouri, everyone else’s rates would go up even more.

The PSC should agree to that settlement, while also returning to consumers a similar amount in over-earnings that Ameren has pocketed over the past two years. The surveillance reports and the testimony in the over-earnings case tell the PSC commissioners all they need to know. Ameren has over-earned. Make them give some of the money back.

Ultimately, the Legislature should get serious about protecting consumers by funding the Office of Public Counsel to a level that would negate the need for consumers to have to rely on Noranda or other large industrial companies to do their heavy lifting for them.

We won’t hold our breath over that one.

Kansas City Star: Missouri Road Tax Increase a Study in Bad Behavior

St. Louis Post-Dispatch: MoDOT’s List of Shiny Objects Can’t Obscure Problems with Amendment 7

JimmyCsays: The proposed 3/4 cent state sales-tax increase for transportation is a bum deal for taxpayers

Ray Hartmann in St. Louis Magazine: Indecent Proposals

Sen. John Lamping in Missouri Times: Missouri Road Tax Proposal A Cynical Grab by Special Interests

St. Louis Post-Dispatch, July 27, 2014

When it comes to electric rate fights, Ameren Missouri is undefeated over the last decade.

Rate increases: 5. Rate decreases: 0.

On Monday, consumer groups will take another go at the St. Louis-based electric utility.

The Missouri Public Service Commission carved out the whole week to take testimony and evidence in the case, which accuses Ameren Missouri of earning more profit than regulators allow. Not only that, they will argue that the percentage return regulators do allow — the most important number for utilities and their consumers — is too high and should be reduced.

For customers, it won’t mean much on their bills. The latest testimony from PSC staff says Ameren earned about $25 million more than it should have during 2013. Spread that over 1.2 million customers, and it’s not much.

But after years of rate hikes — about $867 million, or a 42 percent increase since 2006 — consumers aren’t likely to say no thanks. It’s simply a matter of fairness, said John Coffman, a former Missouri public counsel who is now an attorney for the Consumers Council of Missouri and the AARP.

“If you told the average consumers that their utility was overearning by $25 million, I think they would like to have that reflected in their rates,” he said.

It’s not the first time the utility’s own numbers have showed it earning above its allowed rate of return. But to win an overearnings case, critics have to show that kind of earning will continue, and the groups seeking to hold the utility accountable don’t always have deep enough pockets to prosecute a complex regulatory action in front of the PSC.

Noranda Aluminum, on the other hand, does. Not only does it say Ameren earned more than it was legally allowed, it says the utility’s allowed return on equity of 9.8 percent is too high and should be reduced to 9.4 percent. That would put the utility’s 2013 excess earnings at $50 million.

Ameren has consistently said the numbers are a snapshot and not the full picture. Earnings fluctuate above and below the allowed rate of return, the utility argues, and just because it earned a little more than it’s allowed doesn’t mean it will continue to do so.

It appears to have the PSC staff on its side. Testimony submitted last month from Mark Oligschlaeger, who manages the PSC’s utility auditing unit, indicated staff would only conduct a full earnings review if the commissioners direct it to.

“The results of staff’s analysis of Ameren Missouri’s calendar year 2013 earnings … do not indicate that Ameren is materially or continually overearning at the present time when its recent actual earnings levels are analyzed in light of traditional Missouri ratemaking practices,” Oligschlaeger said in written testimony.

To do a comprehensive audit would be redundant, Ameren said after the complaint was originally filed in February. The utility pointed out it planned to file a general rate increase in July, and a comprehensive audit could be done then, which it said would show it was actually underearning.

It kept its word, filing a 10 percent, or $264 million, rate increase just as Independence Day weekend was getting underway.

Not since 2002 has a group succeeded in rolling back the rates of the state’s largest utility. That was the year consumer groups won $442.5 million in rate reductions and social-welfare benefits phased in through 2005. Ameren also saw its rates reduced in the late 1980s, and between 1988 and 2006, customers didn’t experience a single rate increase.

But the two prior rate reductions have two stark differences from the one underway. Each was launched in response to a marked outside change — a drop in the federal tax code in the mid 1980s that gave the utilities more money, and the end of an experimental regulatory regime in the early 2000s that allowed the utility to tweak its books to keep more customer cash.

Perhaps even more important, each overearnings complaint was initiated and prosecuted by the PSC staff, the closest thing to a counterbalance to the experience and manpower the utilities bring to bear at the commission.

Generally overearnings cases are triggered by some sort of outside change, such as a merger, said Charles Fishman, a utilities analyst with Morningstar. A rate reduction isn’t something that weighs heavily on the minds of investors. It does happen, but regulators know that if investors stop seeing regulated utilities as stable, secure sources of income, that could hurt electric reliability.

“Missouri regulation has been pretty consistent the last few years,” he said. “Every once in a while you run into events that create regulator mischief, where regulators don’t act as consistently as they have in the past. We see that every once in a while, but not that often.”

Needless to say, rolling back Ameren’s rates is no easy feat. The utility fended off a court order to roll back rate increases three years ago, when a Cole County judge ruled then invalid and put the utility at risk of losing $300 million or more a year in rate revenue. Consumer and industrial groups, initially cheered by the ruling, lost on appeal.

In 2006, the utility’s regulator, the Public Service Commission, ordered its staff to investigate Ameren’s earnings at the behest of some of the state’s largest industrial consumers. But the PSC staff came back and said they didn’t have the manpower to do it.

While Missouri law allows anyone to file an overearnings complaint, the barriers are high, Coffman, the former public counsel, said.

Earnings information filed in periodic reports is classified unless confidentiality agreements are signed. The time and expense it takes to launch an overearnings case precluded even his group and the office of public counsel from filing a complaint last year after Ameren financial data showed it made some $80 million more than its allowed return.

“The office of public counsel hasn’t had that kind of resource,” Coffman said. “If they had that kind of staff, I think they would be able to do it on their end.”

Kansas City Star, July 18, 2014

Many utilities allow payday lenders to collect utility bill payments from customers, but Missouri regulators are considering whether to stop the practice.

The dispute has simmered for years. Critics say it’s ridiculous to collect utility payments at places they say provide loans at sky-high rates and target cash-strapped consumers. Customers pay off their utility bills but may find it too convenient to take out a loan to do so.

Utilities defend it as the best and most convenient option for some customers. And payday loan companies argue that very few utility customers paying their bills also take out a loan.

The issue erupted at a recent meeting organized by the Missouri Public Service Commission that was attended by payday lenders, utilities and consumer groups. Next month the commission’s staff will deliver a report with a recommendation on whether to proceed with drafting a rule to ban the practice.

“We’ve been fighting this for years, and it’s finally getting some momentum,” said John Coffman, an attorney for the Consumers Council of Missouri.

Most utility customers pay their bill by mail or online. But a small percentage don’t have a bank and have to pay in cash. A couple of decades ago, utilities had storefront locations that accepted payments, but those were closed to cut costs.

KCP&L said 2.6 percent of its customers now use walk-in authorized pay stations, such as grocery and convenience stores. But the utility has an arrangement with eight of those authorized pay stations in Missouri and one in Kansas that offer check-cashing services or payday loans.

“We only use one when we have no other way to have a walk-in payment option,” said Katie McDonald, a KCP&L spokeswoman.

The utility has had no complaints from customers about using payday lenders, McDonald said.

The Missouri Energy Development Association, which represents the state’s investor-owned electric and natural gas utilities, said in a document filed with state regulators that in the absence of a compelling showing of abusive business practices, it would be arbitrary to restrict who can be authorized pay agents.

The payday loan industry is often the target of criticism, especially in Missouri with its lax oversight of the business. Earlier this month, Gov. Jay Nixon vetoed payday loan legislation, saying it fell far short of the serious reform needed and would still allow the lenders to charge 912.5 percent for a 14-day loan.

“Payday lending often perpetuates an endless cycle of debt for consumers who can least afford it,” he said in a statement.

Berta Sailer, co-founder of Operation Breakthrough, a Kansas City social services group, attended the recent PSC meeting and hopes regulators will ban utilities from using payday lenders.

“People who turn to high-interest loans are desperate for money,” she said, “especially if they’ve fallen so far behind on payments that their utilities are turned off.”

QC Holdings, one of the state’s largest payday lenders and speaking on behalf of two others, said in a letter to state regulators that accepting utility bill payments and offering short-term loans were separate transactions.

It contended that very few utility bill payment customers took out payday loans. And it pointed out that the $1 average fee collected for each utility payment doesn’t cover the cost of handling the payments.

“We strongly contest the unsupported opinion that payday loan stores are taking advantage of bill pay customers,” Matt Wiltanger, vice president of QC Holdings, said in the letter.

In 2009, the PSC staff reviewed the issue and didn’t recommend that utilities stop using payday lenders to accept payments. In 2011, regulators said the relationship between the lenders and utilities was a concern, but it wouldn’t seek to ban them.

The Office of the Public Counsel, a state agency that represents consumers on utility issues, has been a critic of the relationship for years. Recently in a regulatory filing, it said its concerns were unabated.

“A bill payment at these locations … becomes an opportunity to solicit the utility customer to borrow money at an extremely high rate,” the Office of Public Counsel said.

Office of U.S. Sentator Charles Schumer, July 16, 2014

General Motors is First Major Car Manufacturer to Support Bill Closing Dangerous Loophole

Schumer: GM’s Support for Our Bill Shows the Real Danger of Having Defective Cars on the Road and Opens Door for Other Manufacturers to Endorse the Bill and Keep Consumers Safe

U.S. Senator Charles E. Schumer (D-NY) has announced that General Motors is the first major car manufacturer to support his legislation that would close a dangerous loophole and prohibit rental car companies from renting or selling vehicles under manufacturer recall. The legislation is co-sponsored by Senator Barbara Boxer. Current law bans only auto dealers from selling a new car under recall unless the defect has been remedied.

The Raechel and Jacqueline Houck Safe Rental Car Act would, for the first time, hold rental companies to the same standard as auto dealers.

The bipartisan legislation, which already has the support of all the major rental car companies, the American Car Rental Association, Consumers for Auto Reliability and Safety and a broad coalition of auto safety and consumer groups, was first introduced in 2013 by Senators Schumer, Lisa Murkowski and Barbara Boxer.  The bill is named after sisters Raechel and Jacqueline Houck who were killed driving a rental car that had been recalled for a power steering hose defect but had not been repaired.

General Motors announced its support for the legislation in a letter to Senator Schumer. It comes after bill sponsors negotiated new legislative language to make clear the authors’ original intent not to change the status quo or interfere with contractual obligations between the auto manufacturers and rental companies regarding loss of use liability.

“When buying or renting a car, the last thing we should worry about is if the car is defective or recalled,” said Senator Schumer. “I thank General Motors for endorsing our common sense legislation and hope it opens the door for more car manufacturers to do the right thing and support our bill to keep consumers safe.”

“The safety of anyone who drives or rides in a GM vehicle is extremely important to us,” said GM CEO, Mary Barra.  “We have worked constructively with Senator Schumer, and the cosponsors of The Raechel and Jacqueline Houck Safe Rental Car Act. Through those conversations we have addressed our concerns, and with changes agreed to by the sponsors, GM is able to support their legislation. If enacted, it will give those who rent a vehicle, regardless of make or model, the peace of mind that the car they are in is safe.”

“I welcome GM’s support for Senator Schumer’s bill, named after my treasured daughters and co-sponsored by my Senator Barbara Boxer,” said Carol “Cally” Houck, mother of Raechel and Jacqueline Houck. “It’s time for the rest of the auto manufacturers and the auto dealers to follow the rental car industry, and GM, and support the bill.”

“General Motors’ endorsement is an important step in our campaign to pass the Raechel and Jacqueline Houck Safe Rental Car Act and keep unsafe rented vehicles off the roads,” Senator Boxer said. “Today I am calling on all the other automakers who currently oppose this common-sense bill to join GM in supporting this effort to protect American families.”

A copy of the letter from Lee R. Godown, Vice President of Government Relations at General Motors, indicating support for the legislation can be found below:

Dear Senator Schumer:

On behalf of General Motors, I would like to thank you, as well as the cosponsors, for reviewing our proposed changes to S. 921 as described in my June 26, 2014, letter to you (herewith again attached).

With these changes made to the committee-reported text of S. 921, “The Raechel and Jacqueline Houck Safe Rental Car Act of 2013,” such a revised bill will have the support of General Motors.

Let me offer our appreciation to you, as well as to your staff for their professionalism, as we worked through this process.

Sincerely,

Lee R. Godown
Vice President
Global Government Relations