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Would you be willing to pay the original builder a fee when you resell your home? That’s an obligation some developers are trying to slap on homeowners in their communities.

Many condo and townhouse dwellers are already familiar with the "flip tax," more formally known as a resale fee. Typically calculated as a percentage of the sale price, it’s a fee due to the condo association or community when an owner sells. These charges fund common-area maintenance or provide a boost to reserve funds, which benefits the association’s homeowners.

But in some new developments, homebuilders are including in contracts a 1% fee to be paid to them every time the house is sold — for 99 years. And the money doesn’t go for improvements or upkeep: It’s just money in the builders’ pockets.

That has the real estate industry and consumer protection groups up in arms.

"It’s of no benefit to consumers," said Kathleen Day, of the Center for Responsible Lending. "It’s another innovative way to price gouge. Every extra dollar they suck out of people’s wallets takes away from other spending. It’s not good for the economy."

The issue has attracted the attention of Washington, where Rep. Brad Sherman, D-Calif., is leading a charge against the fees. "Consumers are not in a position to deal with another level of complexity, one that pits plain vanilla homes against ones that come with fees," he said.

Freehold Capital Partners, the New York-based financial company that is developing the program, claims it has already signed up thousands of developers nationwide, representing hundreds of billions of dollars of development.

The company’s plan is to monetize that future income — essentially allowing developers to get paid now rather than later. To do that, Freehold would bundle together the estimated income from the future fees and sell that package to investors. It claims this new "asset" would be worth about 5% of the original home prices.

One company that is working with Freehold is Thieman Enterprises, a developer based in Ohio. "I think it’s a fantastic program," said owner Ted Thieman. "I can get my development going again."

He said he needs the upfront cash to fund the building of infrastructure — roads, sewers and other essentials. Working with Freehold to sell the fee package on to investors would potentially give him enough cash to get projects going and land construction loans more easily.

Ohio, though, has banned the practice. Thieman thinks that removing this potential funding source will discourage development low interest personal loan. He said he will relocate one of his development plans to West Virginia, where he has acquired land. He’s disappointed for his home state.

"We can bring billions into Ohio and jump-start the economy," he said.

A Utah builder, Development Associates, initiated a similar program several years ago in order to recover some of the up-front costs of its developments. But after complaints from homebuyers, who said they were unaware of the fees, the company withdrew them.

Some developers regularly include "transfer fees" in their sales contracts, including Lennar, one of the nation’s largest builders. But the fees Lennar collects go to local housing-assistance organizations and charities, not back into its own pocket. That has helped keep the practice off lawmakers’ radar.

Still, most real estate experts are against these fees. A coalition of real estate industry organizations and community groups recently sent a letter to Treasury Secretary Tim Geithner recommending that he not allow Freehold’s securitization plan to go forward.

In the letter, the coalition quoted Rep. Sherman, who called the fees "a new predatory scheme."

In the past month, the Federal Housing Finance Agency proposed restricting Fannie Mae and Freddie Mac from buying or backing any mortgages that include home resale fees.

Freehold, of course, defends the program. Chief Operating Officer William White argues that the 1% resale fee will actually benefit consumers by lowering home prices: "No one will pay the same for a home with a [resale fee] as they would for the same home without the fee," he said.

That would make buying a home easier — but reselling one at a profit harder. Meanwhile, builders could offset their lower initial selling prices by either collecting on the back-end income stream from future sales, or selling those future earnings off to investors.

No securitization package has yet been created, according to White. But he’s optimistic: "We have been pleased with Wall Street’s response to date."

Whether the program will ever gets off the ground is an open question: 18 states have already banned or restricted the practice, and if the FHFA proposal goes through, it could derail it entirely.

Sherman does not think the idea is dead. Not yet.

"We’ve wounded the beast, but we haven’t put a stake through its heart," he said. 

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Home sales heated up like never before in the month of June with the number of transactions climbing to 1,379, easily the highest recorded in this decade by the Buffalo Niagara Association of Realtors.

The trade group reported 1,379 closed deals for that period – a 24 percent leap from 1,111 sold June 2009. The previous high sales total for any month since 2000 was 1,188 in August 2007.

For the first half of the year, home sales in the Buffalo area are running 5 percent ahead of 2009 at 4,364 compared to 4,164.

Real estate observers have cited the continuation of a federal tax credit for home buyers as one reason for the spike in home sales in recent months.

Prices also rose to new highs in June with the median tag up 4 percent to $119,000 and the average single-family home price having increased 3 percent to $139,231 from $134,927 year-over-year.

Total dollar volume in the market spiraled 22 percent to $192 million from $157.7 million.

Active listings continued to expand, rising 11 percent to 6,281 from 5,934 while new listings declined 14 percent to 1,650 from 1,912.

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New York state legislators approved more emergency spending, a new menu of business tax incentives and higher cigarette taxes in votes on Monday.

Legislators enacted another one-week emergency spending plan, staving off a government shutdown while everyone waits on a budget for the full fiscal year to be finalized in ongoing closed-door negotiations.

The state budget is nearly three months late and it must resolve a $9.2 billion deficit.

Lately, Gov. David Paterson has used the short-term spending plans to force votes on slices of the overall state budget, a rare piecemeal process.

After Monday’s separate votes, legislators have locked in roughly 70 percent of the budget for the total fiscal year, according to Democratic estimates.

To date, $5.53 billion of the state deficit has been erased through a mix of actions that raise revenue, and some spending cuts.

Legislators have yet to address $3.65 billion in red ink, according to Sen. Carl Kruger (D-Brooklyn).

The latest emergency spending plan, approved Monday, keeps bare-bones operations going through June 27. The bill passed the Senate 33-28, with Sen. Roy McDonald (R-Saratoga) breaking ranks with his party to vote for the bill. The legislation passed by a wider margin in the Assembly, which is dominated by Democrats.

“This year’s assault on taxpayers’ wallets has only just begun,” said Senate Minority Leader Dean Skelos (R-Long Island).

In addition, a majority of senators approved a budget bill setting full fiscal-year funding in the areas of transportation, economic development, public protection and the environment.

The bill passed the Assembly late last week by a 79-52 vote. A Senate vote count was not immediately available.

The bill enacts a transportation plan allotting $1.8 billion for roadwork this fiscal year, a drop of 9 percent, or $187 million, from last year.

The bill cuts a range of business benefits. The state is shrinking a range of hi-tech programs by $25 million, including matching grants and technology transfer incentives.

The bill also eliminates a $71 million subsidy for small businesses providing mandated coverage for mental health treatment, known as Timothy’s Law. Businesses will still be required to continue the coverage for employees.

Also, the bill enacts the state’s new menu of business tax incentives, called Excelsior Jobs. It replaces the signature Empire Zones program, which shuts off to new applicants after June 29.

Business lobbies have hammered the Excelsior Jobs benefits as mere shells of the incentives the state offered under Empire Zones. The new incentives are limited to specific industries, and the state will spend $50 million on them this fiscal year—compared with $550 million in annual Empire Zone spending.

Upstate Democrats indicated more needs to be done to help businesses.

“The Excelsior Jobs program is a good start. We will continue to develop incentives,” said Sen. William Stachowski (D-Buffalo). “This program lays the foundation for additional strategies.”

Skelos and other Republicans accused Democrats of gutting the state’s economic development tools.

“Surely now other states will be stepping up their efforts to lure companies that want to escape New York’s high taxes,” Skelos said.

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The numbers being batted around when it comes to how much the oil spill will ultimately cost BP and the local Gulf of Mexico economies are huge. $3 billion. $14 billion. One politician put it at over $100 billion.

The range is so big because two important questions remain unanswered: When will the leak be sealed, and will most of the oil wash ashore? Until those are answered no one will know the pricetag of the damages for sure.

But there have been studies done looking at what’s broadly at stake, and the number is quite large indeed.

The four biggest industries in the Gulf of Mexico are oil, tourism, fishing and shipping, and they account for some $234 billion in economic activity each year, according to a 2007 study done by regional scholars and published by Texas A&M University Press.

Two thirds of that amount is in the United States, with the other third in Mexico.

If the Gulf of Mexico were a country, it would be the 29th largest economy in the world.

Oil and gas

Ironically, the largest chunk of that money is generated by the oil and gas industry, and they may ultimately be the ones that lose the most.

Oil and gas interests generate $124 billion or 53% of the total money, according to Jim Cato, a former economics professor at the University of Florida and one of the authors on the study.

As of Thursday, all new offshore drilling in U.S. waters in the Gulf remained closed following the sinking of the Deepwater Horizon oil rig last month, which claimed 11 lives and left an uncapped oil well leaking thousands of gallons a day into the water.

Oil production from existing wells has been largely unaffected and drillers have been busying themselves with wells begun before the explosion. But the longer the ban remains intact, the harder the economic bite.

"If the moratorium is continued through June, lost revenue from shallow water drilling is estimated at $135 million," said a letter Friday from ten senators urging a lifting of the ban.

The ban may eventually be lifted, but how much more the oil industry will have to pay for royalties or spill prevention, plus restricted access to new drilling sites, remains to be seen.

Tourism

Tourism is the second largest industry in the Gulf, and it ranks right behind oil. About 46% of the Gulf economy, or over $100 billion a year, is from tourism dollars, according to the A&M report.

With tourism, it’s not necessarily the oil that washes up on the beach that hurts the industry, but how much oil people think will wash up on the beach. And people seem to think it will be bad.

In Florida, state tourism officials recently told CNN they’re getting cancellations as far as three months out.

In Mississippi it’s even worse.

Ken Montana, President of the Mississippi Gulf Coast Tourism Commission, said cancellation rates are running at nearly 50%.

"The perception is that everybody has oil on the beach and we are all closed up," Montana told CNN. "No beaches are closed, period."

Fishing and shipping

Fishermen are perhaps the most directly impacted by the spill. The government has already closed over 20% of federal waters for fishing activities and many of them are out of work.

But commercial fishing and shipping together only account for 1% of the Gulf’s total economic activity.

While the number is small in terms of Gulf cost dollars, it does not factor in the impact a shut down in shipping could have, which could halt grain and other cargo from traveling up and down the Mississippi River.

According to the Port of New Orleans, no disruption in shipping is foreseen. The Coast Guard has set up five washing stations for ships to get scrubbed if they come into contact with the oil, but so far none have been used, said a port spokesman.

What’s at stake

Obviously, the oil spill isn’t going to shut down the Gulf’s entire economic output.

When the spill first happened, researchers at the Harte Research Institute for Gulf of Mexico Studies, who also contributed to the A&M report, estimated the economic damages might be $1.6 billion. That number included $400 million in direct economic costs, and another $1.2 million in services provided by wetlands that might be compromised - things like water filtration and such.

But that number was arrived at when the oil spill was estimated to be 1,000 barrels a day, said David Yoskowitz, chair of socio-economics at Harte.

BP (BP) estimates for the oil leak are now 5,000 barrels a day, and some say it could be 10 times that.

Moreover, both the Harte study and the A&M report only look at the Gulf of Mexico. Yet there are reports that the oil is getting caught up in the so-called loop current, which could bring it up the eastern seaboard.

"If that happens, all bets are off," said Yoskowitz.  

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Construction is to begin in May on a boutique hotel that Lawrence Group and St. Louis University plan for the vacant Interiors Unlimited building on Olive Street just north of the SLU campus.

The 51-room Hotel Ignacio will be named after St. Ignatius of Loyola, founder of the Jesuit order that runs SLU. The hotel, located at 3407 Olive, will open early next year, Steve Smith, president of Lawrence Group said Wednesday.

Peter Pierotti, director of real estate at SLU, said the lobby area will have rotating displays of art from university collections. The artwork will help connect the hotel and the Grand Center arts district, Smith said.

They declined to divulge the project’s cost. SLU does not publicize the cost of projects built without private donations, a university spokesman said. The project has historic preservation tax credits and $5 million in federal New Markets Tax Credits, Smith said.

Adjoining the five-story Interiors Unlimited building is Triumph Grill, which is in a structure owned by Smith.

He said the two buildings will be connected to allow the restaurant to provide the hotel’s food service.

Built in 1905 as the Morgens laundry, the Interiors Unlimited building has been vacant for years. SLU bought it and other properties in the vicinity several years ago when it considered building an arena in Grand Center.

Instead, the project eventually became Chaifetz Arena, which opened in 2008 on SLU’s southeast corner.

Hotel Ignacio will feature the usual amenities, including a business center and spa. The parking area on the building’s east side will be landscaped as part of a new main entrance. Guest parking will be on a university-owned lot just north of the hotel.

"We don’t have to create any more asphalt," Smith said.

Pierotti said the hotel will invigorate an area near the SLU campus.

"We want to get people in the street, enliven the street," he said.

As part of the deal, Lawrence will get a stake in the hotel.

Already under way a block from the hotel site is work on another project by SLU and Lawrence Group. Two buildings in the 3300 block of Locust are being renovated as 25 apartments and street-level store space.

The apartments, scheduled to open this fall, will be marketed to SLU students as well as the public.

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Falls Church security contractor DynCorp International Inc. has agreed to be acquired by private investment firm Cerberus Capital Management LP for $1.5 billion.

Terms of the proposed transaction call for Cerberus to pay $17.55 in cash for each share of DynCorp International common stock, approximately $988 million in cash based on the approximately 56.29 million shares of stock outstanding. Assumption of debt would make up the balance of the purchase price.

The cash price of $17.55 for DynCorp shares (NYSE: DCP) is a 49 premium to its closing price Friday of $11.75 per share. DynCorp went public in May 2006 at $15 a share. The stock reached its peak in Jan. 2008 when it traded at $27.58.

As a security contractor, DynCorp has been active player in U.S. security missions around the globe, especially Iraq. In its latest profit report, DynCorp earned $20.3 million, or 36 cents per share, on revenue of $915 billion.

The acquisition by Cerberus has been approved by DynCorp’s board of directors and recommended to shareholders, but is contingent on approved by a DynCorp shareholder vote.

DynCorp has the opportunity to get more from a sale. The acquisition agreement gives DynCorp 28 days to solicit alternative proposals from third parties and the company said Monday it intended to consider any such proposals. But at least one big block of owners think the Cerberus offer is good enough to take. Affiliates of Veritas Capital FundManagement LLC, which hold nearly 35 percent of DynCorp International shares, have agreed to vote in favor of the transaction.

Assuming the deal is approved by shareholders and government regulators, both firms expect the transaction to close in the third or fourth quarter of 2010. After that, DynCorp would become a private company wholly-owned by Cerberus.

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Employment dropped in nearly all of the 334 largest U.S. counties from September 2008 to September 2009, and Kansas City-area counties didn’t escape the declines.

Clay County took the greatest local hit, with employment falling 5.7 percent, or 86,600 jobs, according to figures the U.S. Bureau of Labor Statistics released Thursday. Johnson County trailed close behind, with employment diving 5.6 percent, or 299,400 jobs. Jackson County experienced a decline of 4.4 percent, or 353,100 jobs. Wyandotte County saw a drop of 2.7 percent, or 78,800 jobs, which was the 35th-best showing in the nation.

See the complete report here.

None of the drops were as severe as in Elkhart County, Ind., where employment fell 14.5 percent during the period, mostly because of manufacturing job losses.

The greatest gain came in Yakima County, Wash., where employment rose 1.7 percent.

The nation’s average weekly wage slid 0.1 percent during the third quarter of 2009, the first year-to-year drop in three quarters and one of only five drops since 1978. Average financial activities wages fell 2.3 percent; average manufacturing wages fell 0.2 percent. Wage changes ranged from a 6.6 percent gain in Bell County, Texas, to a 13.2 percent loss in Rutherford, Tenn.

Here’s how the Kansas City-area counties stacked up in terms of average weekly wage and the percent change year to year:

• Clay County, $785, up 2.7 percent

• Jackson County, $858, up 0.7 percent

• Johnson County, $858, down 0.9 percent

• Wyandotte County, $812, down 2.2 percent

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Lee Sachs, a counselor to Treasury Secretary Timothy F. Geithner, plans to step down this year as the banking crisis wanes and the Obama administration winds down its emergency programs.

As an adviser on domestic finance, Sachs helped conduct stress tests on the biggest banks and reshape the $700 billion bailout. He also helped manage trillions of dollars in additional government borrowing and advised Geithner on the market implications of issues from the Greek budget crisis to housing finance.

Sachs says he’s leaving now that markets have stabilized and Geithner has had time to set up a permanent team. “I came back down here to help the president and secretary to design and execute their response to the financial crisis,” he said in an interview. “The financial system is in a much stronger position today than it was a year ago.”

His departure comes as the crisis-response team he established becomes a permanent part of the Treasury Department. A former senior managing director at Bear Stearns Cos., the New York-based investment bank bought by JPMorgan Chase & Co. in 2008, Sachs will be one of the most senior of Geithner’s advisers to step down.

“I am likely going to head back to the private sector at some point in the next couple of months,” said Sachs, 46. He says he’ll take some time off before deciding on his next move, to recover from “running 100 miles-an-hour around the clock to stabilize the financial system” alongside regulators and White House officials.

Sperling May Follow

Another Geithner counselor, Gene Sperling, may also be leaving the Treasury soon. Sperling is under consideration for the post of deputy director of the Office of Management and Budget, according to a person familiar with the matter.

Geithner, 48, yesterday credited Sachs with showing “great judgment and skill in helping the president navigate the greatest financial crisis since the Great Depression.”

One of Sachs’ legacies will be the Office of Capital Markets and Housing Finance, successor to an informal crisis- response team he helped establish in the Treasury’s domestic finance division. Led by Matthew Kabaker, a former executive at Blackstone Group LP, the unit fulfilled one of Geithner’s goals at the start of the new administration.

“In transition, we recognized that the Treasury Department did not have a staff capability to deal with capital markets and finance-related issues,” Sachs said. “We need this team.”

Fannie, Freddie

The Treasury is moving into a long-term planning phase after 18 months of primarily managing the aftermath of the financial crisis. Priorities this year include pressing for an overhaul of financial regulation and starting to design plans for the future structures of mortgage finance companies Fannie Mae and Freddie Mac to bring to Congress in 2011.

Since taking office, the Obama administration has tried to change the $700 billion Troubled Asset Relief Program from a bank rescue into a financial-stability plan. TARP, enacted in October 2008, expires in October.

Geithner’s department last year set up the Public-Private Investment Program with the goal of removing as much as $1 trillion in troubled assets from bank balance sheets. The program has moved forward on a much smaller scale, committing as much as $30 billion in government money for participating funds.

The Treasury also held several additional rounds of capital injections for small banks. Those programs drew few applicants, as banks feared customers and investors would shun firms that accepted money from the TARP.

Clinton Years

Other regulators say Sachs’ strength has been his ability to understand the government’s role in the crisis, which allowed him to start work immediately after the 2008 presidential election. He was already known on Wall Street and in Washington from his early career, which spanned 13 years at Bear Stearns followed by a tour in the Clinton administration under former secretaries Robert Rubin and Lawrence Summers.

“When he called me in November, right away we were communicating, I knew I could trust him, I knew I was working with somebody who knew what they were talking about,” Federal Reserve Vice Chairman Donald Kohn said in an interview. “He’s really knowledgeable about financial markets and financial institutions. He’s seen that world from both sides.”

Kohn, who will step down in June after a 40-year central bank career, described Sachs as “even-tempered,” with a sense of “quiet authority creditreport.” He says they worked closely together when Sachs served in the Clinton administration and spoke daily, sometimes more often, during the height of the financial crisis.

“I have found him an important ally for the Federal Reserve,” Kohn said. “He was very sensitive to the issue of Federal Reserve independence.”

Capital Injections

One example of Sachs’ influence came when regulators were debating how big banks should repay capital injections they received in 2008 at the height of the crisis. Sachs advised regulators on how quickly banks could be expected to raise private capital, as well as how markets might react.

Sachs forged ties to his current boss during the Clinton administration, when Geithner worked in the Treasury’s international affairs division. With Sachs in domestic finance, the two worked on debt crises in Russia and Asia, while also competing on the tennis court and in triathlons.

Geithner is faster. “I think he called me from home as I was crossing the finish line,” Sachs said of one shared racing experience.

Wall Street Resume

Critics said Sachs’ financial-market experience isn’t an automatic advantage. His ties to Rubin, who hired Sachs in 1998, could be seen as a liability after the country’s biggest banks required bailouts, said William Black, a law professor at the University of Missouri-Kansas City.

“‘Market experience’ from individuals that screwed up the markets is an interesting concept,” said Black, who served as a federal bank regulator during the savings-and-loan crisis of the late 1980s and early 1990s.

The post-crisis stigma attached to Wall Street resumes accompanied Sachs to the Obama administration: Since joining the team in late 2008, he was never nominated for a Treasury position that required Senate confirmation.

Instead, Sachs was one several counselors serving Geithner in the first months of the administration, when the Treasury Department had no Senate-confirmed senior officials other than the secretary. Congress has since confirmed Deputy Secretary Neal Wolin and a number of assistant secretaries, without approving the administration’s picks to lead the Treasury’s international affairs and domestic finance divisions.

Nominations Weighed

As a result, nominees Jeffrey Goldstein and Lael Brainard have been serving alongside Sachs, Jake Siewert and Gene Sperling as counselors, while the Senate weighs their nominations. Goldstein, a former private equity executive, has been tapped as the undersecretary of domestic finance. Brainard, who served as Clinton’s deputy director of the White House National Economic Council, has been nominated as the undersecretary for international affairs.

The lack of Senate-confirmed Treasury officials came as the White House fended off criticism from lawmakers including Senator Maria Cantwell, a Democrat from Washington state who has repeatedly faulted Obama administration proposals as being too soft on the financial industry without doing enough to close regulatory loopholes.

In the Clinton administration, market experience was viewed as an asset and not a handicap. Gary Gensler, chairman of the Commodity Futures Trading Commission and Clinton-era Treasury official, said he remembers being “delighted that somebody of Lee Sachs’ caliber and values was willing to join the team.”

Mariner Investment

After Clinton left office, Sachs was a partner at New York- based Mariner Investment Group, which owned a stake in at least one company that specialized in collateralized debt obligations — a type of investment that fueled the crisis.

Before joining President Barack Obama’s transition team after the 2008 election, Sachs earned more than $3 million in salary and partnership income at Mariner in 2008, according to his financial-disclosure forms.

In the 1980s and 1990s, Sachs rose to head of global capital markets and the board of directors at Bear Stearns after graduating from Ohio’s Denison College. Sachs is married to Whitney Sachs, a former attorney, and they have two 14-year-old daughters.

“You can work for the secretary of the Treasury of the United States,” said Michael Berman, president of the Duberstein Group, a Sachs family friend who helped him link up with Rubin’s Treasury. “But when it comes right down to it, the twins are in charge.”

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WGY, 810 AM has added conservative talk show host Glenn Beck to its morning lineup.

Beck will make his debut on the Albany, N.Y. news/talk station on March 1, broadcasting live from 9am-Noon. He will replace Al Roney in the WGY lineup.

“Glenn has one of the hottest shows in all of radio right now and we simply could not pass up the opportunity to add him to our on-air team,” said Chuck Custer, director of news and programming for WGY. “With Don Weeks, Glenn Beck, Rush Limbaugh and Sean Hannity, you have arguably the biggest names and best talent in the radio business make quick cash. It’s truly a world class lineup.”

Beck had been airing locally on WROW, 590 AM until Feb. 8, when that station dropped its news/talk format in favor of a nostalgia music format.

WGY did not return a phone seeking comment.

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Government regulators said Tuesday they have demanded documents from Toyota to determine if the automaker conducted its recent recalls in a timely manner.

The National Highway Traffic Safety Administration said it has ordered Toyota to provide documents showing when and how it learned of the defects affecting approximately 6 million vehicles in the United States.

Federal regulations require all automakers to notify NHTSA within five days of determining that a safety defect exists and promptly conduct a recall, the agency said.

"Safety recalls are very serious matters and automakers are required to quickly report defects," said U.S. Transportation Secretary Ray LaHood.

The move comes amid a spike in customer complaints lodged against Toyota in the NHTSA database, including some that allege fatal crashes were caused by sudden acceleration in Toyota cars since Jan. 27.

The probe will examine how Toyota learned of the defects. For example, regulators want to know if Toyota discovered the problems through consumer complaints or factory testing.

The investigation will also focus on whether the company found the problems before the vehicles in question were produced or after they had already been built.

In addition, regulators will check whether Toyota has covered all affected models in its recent recalls to make sure the automaker didn’t miss any problems.

NHTSA said it has demanded documents from Toyota on customer complaints, production data, dates of meetings and other pertinent details.

Toyota will have 30 days to provide the documents pertaining to the timeliness of the recalls and 60 days to submit information related to the adequacy of its ongoing recall efforts, according to a Department of Transportation official.

Cindy Knight, a Toyota spokeswoman, said the company is reviewing NHTSA’s request and will provide all the information they have requested.

"Toyota takes its responsibility to advance vehicle safety seriously and to alert government officials of any safety issue in a timely manner," she said.

Toyota has recalled more than 8.1 million vehicles worldwide for problems related to sudden acceleration and unresponsive brake pedals, among other things. The company has apologized for the safety lapses and pledged to repair the recalled vehicles quickly.

The recalls under investigation include two related to the entrapment of gas pedals by floor mats. Those recalls were announced last fall and expanded early this year. The third, announced in January, involved sticking gas pedals.

If the investigation determines that Toyota violated its statutory obligations, NHTSA said the manufacturer could be liable for a fine of up to $16.4 million.

That’s the maximum penalty under a 2000 law that established stiffer civil, and even criminal, penalties for automakers that fail to promptly report safety defects to federal regulators in a timely way.

The Transportation Recall Enhancement, Accountability and Documentation Act, or TRED, was passed in response to dozens of deadly Ford Explorer rollover crashes caused by faulty Firestone tires. No fines were ever levied in that case.

The biggest fine that’s ever been levied was just $1 million taken from General Motors in 2004 for failing to deal promptly with a windshield wiper issue, an amount that was negotiated down from the $3 million NHTSA originally asked for. 

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