Opposing legislation that NADA contends would add new penalties, inspections and reporting requirements for franchised dealers, the organization’s president Peter Welch testified Tuesday before a Senate consumer protection subcommittee on S. 921, a bill concerning rental car recalls.

If this bill passes, a rental vehicle would have to be put “out of service” if the part needed was unavailable, NADA reported.

During the president’s testimony, he stressed the important role that dealers play in fixing recalled vehicles and how this bill would potentially hinder their work.

Welch told senators that “recall work can sometimes be delayed because the part needed to remedy the recalled vehicle has not yet been designed or manufactured.”

Welch also expressed concern against regulating “multinational corporations with fleets of hundreds of thousands of rental vehicles” the same as “auto dealers with fleets of five loaner vehicles.”

Also, Welch contended that the bill may subject dealers to new federal inspections, new federal reporting requirements and “stiff new penalties.”

For a copy of Welch’s testimony, click here.

To view the hearing, click here.