US should ban rentals of recalled cars -Schumer

NEW YORK Tue May 31, 2011 5:50am EDT

NEW YORK (Reuters) - U.S. Sen. Charles Schumer on Monday called for legislation that would prohibit the rental of cars that had been recalled for safety reasons.

Schumer said car rental customers would be endangered if rental agencies were granted a request to decide whether a safety recall warranted taking a vehicle out of service.

The American Car Rental Association ACRA.L, which represents nearly 100 agencies, in April proposed a system that would allow agencies to decide the seriousness of auto recall issues, and whether or not to take a vehicle out of their fleets.

"Under the proposal ... we sadly could see more tragedies," Schumer said in a statement, citing a case of two California sisters who died while driving a rented vehicle under recall.

Schumer said legislation he introduced in March would require car rental companies to operate under the same restrictions as automobile dealerships, which are banned from selling any recalled vehicle until the relevant safety issue is addressed. He called that a "common sense proposition."

Schumer said the association's proposal would "create a vague double standard that defines some recalled cars as safe and others as dangerous," allowing "these companies to shirk their responsibility to consumers' safety."

Schumer said ACRA's proposal would allow each rental car company to set its own policy, which would lead to unsafe cars being rented out.

A National Highway Traffic Safety Administration audit last year of ten recalls on Chrysler and GM vehicles found that rental companies fix only half of recalled vehicles within a year, according to car manufacturers.

Rental companies dispute the findings, saying the data is incomplete and does not include rental cars sold to third parties before the official recall date.

(Reporting by Chris Michaud. Editing by Peter Bohan and David Gregorio)