Tuesday, 31 August 2010 17:18

California Congresswoman Jackie Speier Talks with Autobody News

California Congresswoman  Jackie Speier talked with Autobody News about her long-time consumer interests, including finance reform, insurance andautomotive repair issues, replacement parts and steering.

She knows far more than most politicians about these issues because she’s carried much related legislation in California.

 

Collision repairers nationwide need to pay attention. In an interview conducted by Ed Attanasio, he asked her:

 

“You first came to national prominence as a shooting victim —the prelude to the grisly nine hundred murder-suicides in Jonestown, Guyana, in 1978. At that time you were a 28-year old lawyer and legislative aide accompanying Congressman Leo Ryan to inquire about Jim Jones’ Peoples’ Temple cult. Many of our readers know that five of your party, including Congressman Ryan, were killed, and that you were left for dead for nearly 24 hours before help arrived. What readers likely don’t know is that after your rescue you endured a dozen surgeries to recover from five gunshot wounds, and that you still had bullet fragments in you when you first ran for Congress. Tragedy struck again in 1994 when your first husband was killed when his car was hit by an unlicensed driver with faulty brakes. What no one but you knows is how these horrific experiences shaped your political views and perceptions. Tell us how they did”

 

Can you tell us how your views on political or consumer issues may have been shaped by those horrific experiences?

Personal tragedy has strengthened my resolve not to waste a day of my life. I’ve chosen public service as a way to give back. Simply put, I am drawn to finding out the facts when the voice of special interests attempt to drown out the truth—this mindset has frequently put me in the position of protecting consumers.

 

In 1986 you won a seat in the California State Assembly. You were reelected five more times, the last as the nominee of both the Democratic and Republican parties. In the Assembly you authored more than 300 bills that were signed into law by both Democratic and Republican Governors. One of your key achievements was passing the California Financial Privacy Act, which took effect in 2004 and was called by Consumers Union “the strongest financial privacy legislation in the nation.”—Why were the foundations of this act of such importance to you?

Personal privacy is foundation of our freedom. Corporate greed has been responsible for the invasion of our privacy and the diminishment of our freedom to choose the path that is best for us. I don’t want to restrict our right to seek and obtain information, I simply oppose those entities that want to sell our personal financial information without our consent. SB 1 struck a blow for protection from special interest manipulation.

Another legislative victory was your authorship of California’s anti-steering law in 2003. How did you come to understand that steering was a threat to consumer and repairer’s interests?

I chaired the Senate Insurance Committee in 1999 which investigated auto insurance fraud. Committee staff interviewed hundreds of consumers, auto repair dealers and insurance adjusters. They documented that that insurers were pressuring shops to repair cars quickly and cheaply, sometimes at the risk of compromising proper repair procedures. This pressure was embodied in confidential agreements between the insurer and shops. It was if insurers wanted to run the shops without accepting any liability. I authored SB 1648, approved by the State Senate, that would have prohibited insurers from owning repair facilities. The bill failed passage by the full Assembly despite stellar advocacy efforts by consumer groups and the collision repair industry. Since that effort fell short, I carried legislation to protect consumers from the harmful effects of direct repair agreements, the backbone of illegal steering practices.

Now that I am in Congress, I am taking a broader approach by examining the use of aftermarket safety parts, such as reinforcement bars, that appear to violate laws requiring replacement repair parts to perform as well as the OEM. Specifically, the aftermarket industry has failed to provide proof that its replacement parts are crashed tested to insure that they will perform the same as OEM in collision situations.

In 2005 you sponsored a bill to regulate sub-prime loans which, unfortunately, did not succeed. We all know how unregulated sub-prime financing has since cut the legs from the U.S. real-estate market and played a huge role in our near financial meltdown in the last years of the Bush administration. How did you come to be aware of how dangerous sub-prime financing was likely to be?

Consumers Union, Center for Responsible Lending and the California Reinvestment Coalition had documented the abuses that were happening to real families. The information was compelling, but the frenzy was too great and the banking and mortgage broker industries were too powerful. Let’s face it, they were making a truckload of money selling these products. California was more unprotected than many because of the high cost of homes and the lack of strong regulation in the mortgage industry at both the state and federal level and lack of consumer protections for home buyers and homeowners.

In Congress on July 11, 2008, you introduced your first federal bill, The Gasoline Savings and Speed Limit Reduction Act, which would set a national speed limit of 60 mph in urban areas and 65 mph on less-populated stretches of highway. Tell us your reasoning on those issues.

This is a clear example where safety, energy conservation and saving consumers money should all go hand in hand. I’ve been working on these issues for a long time, including introducing an earlier speed limit bill in Sacramento. Slowing down may not be a popular idea, but the benefits are real and that’s why I’m for it. I should also mention I introduced a bill to give consumers rebates for more fuel efficient cars, similar to Cash for Clunkers which went into effect later on. We need to keep pushing fuel economy, if for nothing else to tackle our addiction to oil, to clean up our air and to save lives—an estimated 4,000 annually if the nation’s highest speed limits were reduced.

You have recently met with OEM technical staff and some California repairers to discuss what can be done about substandard aftermarket collision parts. This is another issue in which consumers and collision repairers interests align (at least in regard to the efficiency of installation of OEM parts). Can you tell us what the state of those discussions is? Do you think the OEMs should be more proactive in pushing back on insurers for OEM part usage?

As I noted before, I am examining the use of aftermarket safety parts, such as reinforcement bars, that appear to violate laws requiring replacement repair parts to perform as well as the OEM. Specifically, the aftermarket industry has failed to provide proof that its replacement parts are crashed tested to insure that they will perform the same as OEM in collision situations. Rather than rush in with a bill, I am waiting for vehicle manufacturers to provide engineering data to support the contention that aftermarket parts don’t perform as well as OEM. In some respects, it should be on the shoulders of aftermarket producers to prove their products are equivalent. But I believe auto makers can make a significant statement by releasing crash data.

Federal law may be needed to protect consumers from unsafe aftermarket parts. But ideally consumers should be educated to ask for and to demand that safety-related vehicle replacement parts be OEM and they should avoid insurers that refuse to put their safety first.

Tell us how you originally got involved in the collision repair industry and related legislation?

I got involved part because I was chairing the Insurance & Financial Institution Committee, finding myself sparring with the insurance industry and they were often times looking at ways to shave their costs. I just think that when a consumer pays for an insurance product, they should get precisely what they pay for, so the whole idea of steering to particular a specific body shop because they’re in a DRP, or because they’re going to put inferior parts on the vehicles, it just doesn’t sit right with me. So, that’s how I first got involved back in the late ‘90’s.

It just grew from there. More recently I’m on a committee in the House in which has oversight authority over the automotive industry, and we had a hearing with the CEO of Toyota, Akio Toyoda, recently. He was questioned and during the course of the questioning, it became apparent to me that we need to have some legislation on event data reporters and mandate them in all new vehicles, so that there isn’t this dispute based on whether there was driver error or faulty brakes, for instance. That type of information should be communicated to NHTSA in a timely fashion, so that we catch them before these problems become tragedies.

Will recent federal insurance reform have any impact on the collision repair industry in the near future?

I don’t believe so. I worked really hard to make sure that the consumer protections and state law was not trampled on in an effort to create some national insurance regulatory construct. For instance, in California the Insurance Commissioner will still have the authority to take action on any number of consumer issues, based on California law.

Recently, I started looking at the aftermarket collision parts issue, and there is really an alarmingly potential for important safety equipment on a vehicle to be compromised, because aftermarket parts are being used. In part, I was looking at the reinforcement bars in some vehicles and how they’re critical to activating the car’s airbags. If they’re not a proper fit, they can in fact compromise the airbags from being activated.

Do you think the constant tug-of-war between the insurance companies and body shops has gotten better, or will it never stop?

Well, it got better. I carried legislation [in California] to prevent steering, and then two years later I left the Legislature and the insurance industry went to a member to start and undo that. I worry that the Legislature has become so beholden to the insurance industry; that the only way for consumers to be protected in this environment and for auto repair shops to be able to make professional decisions relative to the repair of a vehicle, will have to be done in the courts. I really object to insurance companies telling consumers one thing in their ads and then delivering something completely different when you really need them. We were successful in preventing Progressive Insurance from owning its own repair shops when I was in the Legislature, and I know that at one point Allstate was looking at it as well.

What is your position about Right to Repair?

It should be a requirement for the car manufacturers to cooperate with the repair shops. [Otherwise] that would be like a medical diagnostic company not sharing information about the equipment that they’re selling to the doctors to diagnose a health condition.

Has the ‘bailout’ for the American car manufacturers been a success in your opinion?

I’m smiling when you say that, because I was at the committee and asked the question of General Motors, when they were coming to us with their hats in their hands for assistance from the federal government. And I made a case when I told them, ‘you want something from the people of this country, how about offering something back, such as meeting these guidelines for lower emissions or higher gas mileage at a faster rate?’ And they said ‘No, we couldn’t possibly do that.’

That was in the fall of 2008 and look at where we are now. Now [we are about to have] the Volt and 100,000-mile warranties—so I think it was important for the federal government to step in, because it saved a lot of jobs. It saved the economy in part and I think in time all the loans will be repaid. American car manufacturers got leaner and better at making products. We need to make a concerted effort to create manufacturing jobs in this country, so saving the carmakers is a critical part of that.

 

Where do you think the collision repair industry will be in 5–10 years?

The industry needs to align itself with the consumer more and find opportunities to work with consumer organizations to make the case that they’re looking out for the owner of the vehicle. The repair shops don’t want to be compromised in doing a good job for the car owner and they’re often times put into a conflict of interest by the insurers, and we really need to prevent that from happening. They need to work together to push the customer to the top of the list.

Thank you very much. Last Question: Is it true that as a child you wanted to study ballet but your father insisted you learn Judo instead?

True. But I earned a brown belt, so I can’t complain.

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