Politics & Government

Car dealers would see new rules under California ballot initiative

Add buying a car to the growing list of consumer transactions California voters could be asked to regulate during the 2014 election.

In a Wednesday morning conference call, Sen. Hannah-Beth Jackson , D-Santa Barbara, and advocates announced the filing of a proposed ballot measure that would impose new restrictions on automotive sales.

Car sale safety has already been a focus for Jackson, who last session authored a stalled bill that would bar dealers from selling or leasing cars that have been targeted by safety recalls unless they’ve repaired the cars. Jackson said she plans to revive the legislation during the upcoming legislative session, an effort that would now proceed against the backdrop of an initiative push.

“We should be able to rely on these vehicles as being safe, particularly when they’re purchased from a car dealer,” Jackson said during Wednesday’s call.

The proposed ballot initiative includes similar provisions on selling cars under safety recalls. It would also tighten the rules around car purchases, prohibiting dealers from charging markups on loans and from altering contracts after a sale has been made, and limit the New Motor Vehicle Board’s ability to overrule California Department of Motor Vehicles decisions disciplining dealers for consumer fraud.

“We need the DMV to be the cop on the beat for us,” Rosemary Shahan, president of Consumers for Auto Reliability and Safety, the ballot measure’s proponent, said on Wednesday.

A handful of organizations representing car dealerships opposed Jackson’s bill, arguing that a lack of available data on recalled cars meant the legislation could penalize dealers unaware they had sold unsafe cars.

Larry Laskowski, executive director of the Independent Automobile Dealers Association of California, said it would make more sense to hold off until the completion of a federally mandated database, currently under construction, intended to serve as a national clearinghouse for car data.

“We opposed it because there was not a database to be able to get the information in place,” Laskowski said, adding that the lack of a comprehensive source of car information would expose dealers to unwarranted liability.

Protections against identity theft also play a role in the proposed ballot measure, including language prohibiting dealerships from hiring employees with past convictions for identity theft or forgery.

“The auto dealers hold the keys to the kingdom when it comes to identity theft” given their access to rich troves of personal data, Beth Givens of the San Diego-based Privacy Rights Clearinghouse said on the conference call.

Consumers for Auto Reliability and Safety spent just over $65,000 on lobbying during the 2013 legislative session, according to filings with the California secretary of state. Shahan said the organization has so far paid for the polling and legal work surrounding the proposed initiative but is still recruiting potential donors for a signature-gathering campaign.