Archive for the 'CPSIA' Category



Unfinished Business

In Washington, sometimes repeating something often enough seems to make it true. We see this phenomenon working in the press stories and speeches marking the CPSIA’s fifth anniversary last month.

Although the law has its strengths and weaknesses, the real story is the unrealistic tack that the CPSC has taken in implementing the CPSIA, changing difficult circumstances into nearly impossible ones. Operating from the assumption that if some regulation is good, then more must be better, the agency embarked on a course that seeks to cover all risks—real, speculative, or imagined—rather than crafting regulations to address known unreasonable risks of injury. That our regulations go well beyond what the new law requires is not a fact that seems to concern us. 

One problem with this approach is how divorced it is from the real world. Our regulations are overly-broad and so ultra-complex that only companies with swarms of lawyers can hope to fully understand and comply with them. Thus questions necessarily arise as to how to truly comply with our regulations. And, of course, those questions have been pouring into the agency.

This issue is brought home by a new report from the Handmade Toy Alliance documenting the experiences of small toy manufacturers and importers under the CPSIA and CPSC’s implementation of it over the past five years. HTA members are those who bring excitement, creativity, and imagination to the world of play. None of the products they make presented the safety issues that prompted the CPSIA. Yet this group has felt the brunt of the law more severely than others. Here are some of their observations about the impact of the CPSC’s implementation of the law:

  • “The [testing] rule overwhelmingly favors large manufacturers at the expense of smaller ones. . . . A small business owner could develop what they believe is a reasonable testing program, but it is unlikely to meet the CPSC’s strict interpretation.” HTA points out that we have designed a rule that tilts to the benefit of the large company and which small companies cannot meet.
  • Due to the onerous nature of the requirements, many small businesses will choose “the path of least resistance—to continue doing what they have done for years to assure they produce a safe product [and] use their experience and wisdom to guide design and manufacture, and [to] form relationships with their customers. . . . [S]ome portions of the requirements are adhered to and others are ignored because of costs and complexity.” In other words, small producers will focus on safety and only selectively comply with those portions of our rules they can meet or understand. Creating rules that do not improve safety but contribute to an approach of selective noncompliance is dereliction of our duty as regulators and stands rational regulatory policy on its head.
  • Further, some “handmade toy makers have simply gone out of business or chosen to make products that are not designed for children because the CPSIA and subsequent relief efforts preserve a hurdle too high for small business to clear.” I wonder why those who are praising the passage of the CPSIA find this to be a good result.

Are these not serious flaws attributable to the CPSIA and the agency’s implementation of it? I believe so and they are compounded by this agency’s unwillingness—through over two years of procrastination—to address the unnecessary burdens of our rules as we were directed to do by the Congress. The public has identified ways to ease the burdens, our staff has identified ways to ease the burdens, and I have even added to the list—yet we have not taken any action to implement concrete suggestions, all the while ignoring congressional directions to take action. The HTA report contains a list of actions the agency could take that would ease the burdens of small producers while maintaining safety.

HTA concludes, “The missteps of a few very large toy companies precipitated regulations which damaged thousands of small and micro U.S. businesses and continues to encumber those that survive. . . . Congress and the CPSC must move forward with meaningful solutions that are funded and given priority.”

I have raised these issues with my colleagues repeatedly (and as recently as this month when we voted on our upcoming regulatory agenda). I have been repeatedly outvoted and told that reducing the burdens of our regulations is not a priority of the agency. Again, I ask, when will we turn our attention to correcting the problems we made?

CPSC In Brief

The feature article in this month’s ABA Journal examines the CPSC from the agency’s inception to the present as we implement the CPSIA. It gives an interesting overview of the history of the agency, discusses recent controversial actions the Commission has taken, and provides readers with a good sense of the regulatory philosophy of the Commissioners. The article closes by noting the Commission will soon see an influx of new Commissioners, inviting speculation about the future direction of the agency.

1110 Series: If We Wanted Your Opinion…

Over the past couple days, I’ve talked about how the Commission hid the ball on costs and actively avoided clarity for product bans when we proposed to amend our certificates of compliance rule, the 1110 rule. Today, the issue I wanted to highlight is not our failure to make the rule as intelligible as it should be; it’s my colleagues’ refusal to seek intelligibility in our own deliberative process, specifically in how the new rule will deal with products that are exempt from testing to any applicable safety standard.

Our staff originally proposed what I thought was an acceptable approach: If your product is subject to multiple rules and exempt from testing for only some of them, then you have to certify to the ones in force and claim your testing exemption(s) for the rest. But if your product is exempt from testing under any applicable standard—whether your product has one or more testing exceptions—you don’t need a certificate just to say that. To me, this seemed not only a reasonable opportunity to minimize unnecessary burdens but also more consistent with the law, which bases certificates on testing.  Requiring a certificate with no information other than an exemption is wasteful and contrary to the purpose of the testing regime.

My colleagues were uninterested in these benefits. Arguing that having more pieces of paper to shuffle would expedite work at the ports, they amended the proposed rule to require companies to create, provide, and maintain certificates that say nothing more than, “I’m exempt from testing to the standard.” Although I do not think such a certificate is necessary, I thought public input on the question could be helpful, so I proposed returning to the staff’s original language and asking for comment on the safety, efficiency, and cost implications of my colleagues’ approach. My colleagues were not interested in asking a question, and decided to plow ahead. (My colleagues did less-than-helpfully note that the public could still comment on the approach.)

The rule they insisted on might turn out to be the efficient one. We might hear from commenters that consistency in certificates is more useful than skipping hollow ones. What baffles me is my colleagues’ refusal to even solicit public input on the point, particularly when they are claiming benefits that, if real, the regulated community would likely endorse. Dogged refusal to invite any other perspectives is not the hallmark of reasoned decision-making.

Tomorrow, we’ll continue this discussion of the areas where the 1110 rule could use improvement before it’s final.

Do Consumers Need Protection from Consumer Protection?

As readers of this blog should already know, consumer-protection policies sometimes go wrong. Last week, I had the chance to attend a panel discussion about several examples, moderated by Timothy Carney at the American Enterprise Institute. Entitled “Uber competitive: How bogus consumer laws hurt taxis, toys, and braids” (you can watch the panel at the link), naturally the topic of CPSIA regulations came up. As Randall Hertzler of the Handmade Toy Alliance argued in his remarks to the audience, some of our CPSIA regulations have made competing or just staying in business much more difficult for small- and medium-sized firms making perfectly safe products. This ultimately gives consumers fewer choices and higher prices.

Even liberal Slate blogger Matt Yglesias agreed that health and safety agencies tend to under-estimate the costs and over-imagine the benefits of their work, leaving consumers with net losses. Matt was particularly concerned about pure compliance costs, the paperwork costs of figuring out the regulation and documenting compliance that do virtually nothing to make consumers safer but cost big companies money, small companies jobs or existence, and consumers choice and affordability.

The worst part may be that these costs actually lessen companies’ ability to make consumers safer, because every dollar they spend identifying the hoops and deciphering just how to jump through them is a dollar they can’t spend on innovation, including safety innovation. I have been dismayed by the repeated refusals by some at CPSC to consider the full effects of our rules before imposing them, and this habit is starting to get noticed outside the building. I hope these growing voices lead us to make our work better before Congress has to step in and force us to improve.

It’s He-ere . . .

Today, the CPSC’s children’s product periodic testing and certification rule goes into effect. Perhaps the most sweeping rule in the agency’s history, it was spurred by 2008’s Consumer Product Safety Improvement Act. Even before becoming effective, it has substantially affected the agency, the regulated community, and consumers. Starting today, those effects will grow.

After much debate about its details (more on that shortly), the rule is now the law. It sets massive new requirements for the CPSC’s regulated community. To comply with it, companies and labs should have developed systems and procedures to comply with the new requirements and these should all now largely be in place.

Even so, tweaks to those systems will, of course, be necessary. Some of those changes are things that manufacturers and labs can take care of on their own. Others, however, will probably require attention from agency staff and from the Commission. As you encounter problems with this rule, make sure that the agency and I hear about them. Your voice can make a difference. Already, based on pre-implementation concerns, both Congress and the CPSC have made changes to the rule. And as the rule now goes into effect, we can only expect more concerns to be revealed. When they arise, let us know about them.

Of course, as readers of this blog already know, this rule is not my ideal rule. During the many debates leading up to today, I have already filled enough of this space discussing my disagreements with the Commission’s decisions to belabor them here in any detail. To sum it up, I believe we overstated the necessity for third-party testing, ignored opportunities to make the rule more effective, created “gotcha” traps for companies, and paid lip-service to Congress’s demands that we look to make it less expensive. The result is an unwieldy rule that (because of its name) might make consumers feel safer, but holds only speculative hopes of actually making them safer. All the while, they now have the certainty of fewer choices at higher prices.

Yet, though I remain concerned about the unnecessary damage this rule threatens—and as I continue to work to improve it—make no mistake: It is the law. Companies must heed it even where they disagree with it, and violators should expect a visit from our compliance staff. We have lots of resources for helping businesses understand this rule and how to meet its demands, especially for small businesses. If you have not already figured out your plans for complying with the rule, hurry up and fix that. We surely will all learn a lot along the way, but there is no more time for waiting.

Too Many Cooks?

In a time of budget crises and calls for leaner, smarter government, I’ve spent some time thinking about how the CPSC works and how to make it better. Based on my experience on the commission—starting with three commissioners, then two, then five, then four, and now three again—I have to question the decision to have multi-member commissions—at least here at the CPSC. I have spoken about the subject numerous times, including last fall when I visited with the students and faculty of the Regulatory Policy Program at Harvard University’s Kennedy School of Government. We talked about whether multi-member commissions provide their supposed benefits, and what we should do about it if they don’t. You can read some more of my thoughts in the latest issue of the Cato Institute’s Regulation magazine.

Do It Quick Or Do It Right?

One of the biggest challenges the CPSIA presented the CPSC is the requirement, in §104 of the law, to issue four final rules each year regulating durable infant and toddler products. Young children are our most precious “consumers” and it is critical that the products they use for sleeping, feeding, and playing are safe. Having said that, not all these products necessarily present risks or present risks of the same magnitude.

Congress told us to mandate standards for these durable nursery products based on voluntary consensus standards unless we determined that more stringent requirements are needed. As we have worked to push rules out on the timetable mandated by Congress, I am concerned that the quality of the rules we are issuing is being overshadowed by the need to meet this schedule. Sometimes we propose or mandate requirements that have not had a full vetting by the experts outside the agency. If this happens we need to go back and repair the damage, a process that is resource intensive and  inefficient for the agency and for stakeholders.

I discuss my concern in a statement I filed on an NPR on hand-held infant carriers. I am interested in any ideas from others who share my concern about how to make the process work better than it currently does. You can read my statement here.


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