Conversations with Consumers

This week, I’ve examined the Commission’s shortcomings in proposed changes to Part 1110, our rule on certificates of compliance: we hid costs, we failed to clarify how certificates intersect bans and testing exemptions, and we created discordant “harmonization” in recordkeeping. Today, I’ll wrap up my thoughts on the proposal with three questions, one question my colleagues were willing to ask and two where they found the notion of hearing from you bafflingly uninteresting.

Electronic Records Access

The proposal requires electronic certificates to be in an accessible location without password protection and identified on the product, its packaging, or its invoice, so our staff, our partners at CBP, distributors, and retailers can have ready access. In principle, that requirement seems reasonable. My concern, however, is that this makes them available to everyone (something the statute does not require), even people who might use them for illegitimate purposes. We have included a request for comment on how to ensure easy access only for the people who need the certificates.

Direct-to-consumer International Sales

I recently purchased from a British company whose shoes are unavailable in the US. Who should certify them? The company, with no U.S. expertise (and, arguably, no legal title to them after they accepted my payment)? The shipper, with no direct knowledge? Me? And what value would that certificate have?

I wanted to consider exceptions for single transactions between entirely foreign companies and US consumers. I did not expect agreement on the idea, but I also did not expect vehement opposition to even thinking about it.

First, my colleagues worried reasonably that we lack the authority to make an exception. But this was merely a question, and we plainly have statutory authority for that. A lack of authority might be a hurdle to a solution, but it should not prevent us from exploring a problem. Second, they raised policy disagreements. Those are fine reason to vote against the policy but insufficient justification for squelching debate.

Redundant Certificates

I wanted to request comments about potential redundancy. For example, we have a rule governing small parts in toys for children 3 or under and a broader toy standard that incorporates that rule. As it stands, a certificate will have to show compliance with the overarching standard—which incorporates small-part compliance—and compliance with the small part rule. This redundancy adds to the proposal’s nearly half-billion dollar annual price-tag, so it we should at least inquire into its value.

My colleagues rejected the notion, calling my question “murky” and expressing preference for the status quo. With respect, dissatisfaction with language calls for improving it, not dismissing it wholesale, and defaulting to the status quo is the hallmark of unresponsive government. An idea that has outlived or exceeded its usefulness should not survive by inertia.

One colleague added that he was initially inclined to include my question, but reversed after our staff suggested redundancy eases enforcement. This is the kind of discussion we could and should have had with the public, and it demonstrates we lack information public comment could provide. Perhaps consensus would have formed that the enforcement benefits outweigh any waste, but we should solicit public input, not presume it.

Even though my colleagues were unwilling to ask these questions, nothing prevents you from answering them anyway. The comment period will run 75 days after the proposal hits the Federal Register, and we will all be better off the more we hear from the all corners of the public about what we got right and what we could do better.

While I have focused on issues raised in the public discussion of this proposed rule, there are other equally (if not more) important issues that need to be addressed.  For example, requiring electronic certificates is an important change that merits public input, as is the proposed mandate for common carriers, as “importers of record,” to be liable for certificates.  The new content requirements are also important changes.

I do hope that the agency will take the time and make the effort to craft a certification rule that improves safety without imposing undue burdens.  But if any hope of doing that demands public input. So, you need to provide that input, and we need to listen to it.

Last week, the Commission proposed an update for our rule for certificates of compliance, known as the 1110 rule (part 1110 of title 16 of the Code of Federal Regulations). As the final piece in the testing and certification puzzle created by 2008’s Consumer Product Safety Improvement Act, this rule needed changes. While my colleagues were willing to improve some  problems with the way this rule has functioned in the market—and get public participation in this revision— I was disheartened that we could not find more common ground in trying to craft a rule that would rationalize the certificate requirements.

One of my biggest frustrations was that my colleagues were unwilling not just to do more to reduce the annual costs of this rule but even to be upfront in the way we presented its costs to the public. I wanted to include a chart that would lay out what we expect this change to cost in concert with the rule it replaces and the rules it supports (parts 1107 and 1109, the testing and certification rules for children’s products and their component parts). My colleagues insisted that we only needed to talk about the costs presented in the analysis prepared for this specific set of amendments. None of our rules operates in a vacuum, and the original 1110 rule was short on economic analysis because of the tiny 90-day window we had to pass it, so I thought it more transparent to give the public a chance to see and comment on the total tab. After all, companies don’t have the choice of conforming just with the new language—they have to follow all of our rules—so it is inconsistent with reality to tell people about only the new costs.

Since my colleagues refused to include this vital information, I have posted it here. The chart below breaks down how each component of the certificate rule adds to the prices consumers pay. Remember these are annual costs—and will be incurred year after year. Note also that this does not account for the actual set-up costs already expended to create and maintain the certificates, nor does it necessarily account for the costs of changes needed to comply with this proposal. And remember that these numbers apply only to paperwork—the costs of these sister rules are surely much, much larger.

I’ll talk about more of my concerns with the rule change we just proposed—and the stilted process that led to it—the rest of the week, but I wanted to put the bottom line up front, just as we should have done in the rule.

Yesterday, the CPSC proposed a rule for soft infant and toddler carriers. The rule uses § 104 of the Consumer Product Safety Improvement Act, which requires us to take the voluntary standards from bodies that include representatives from industry, consumer groups, and government and make those standards mandatory. I voted against this NPR because I believe it exceeds our authority under § 104 and because our data does not demonstrate that soft carriers demand regulation.

First, these carriers don’t fit § 104, which tells us to regulate “durable infant or toddler products.” The Department of Commerce has an oft-cited definition of durable goods: those with “an average life of at least three years.” But based on our data, most parents don’t use these carriers past a child’s first year, and less than a third in use are second-hand. This is not surprising since these items are generally low-priced—some sell for as little as $20. So, in general, soft carriers are not durable within a generally accepted definition. To regulate soft carriers under § 104, we would have to presume Congress meant nothing by “durable.” But that is not how we normally read statutes, and ignoring the word essentially amends the statute, something we cannot do. Since I believe this rule exceeds our authority under § 104, I cannot support it.

Second, the data on soft carriers does not show that they pose an unreasonable risk of injury, the test we would have to apply to regulate them outside of § 104. Per our staff’s estimates, 2.6 million carriers are in use each year and 108 children are injured while using them, an injury rate of 0.004%. Other products we’ve regulated under § 104 include play yards and hard-sided carrier, with injury rates that are 10 to 100 times higher. Further, about 65% of estimated injuries come when the adult wearing the carrier falls, and tripping is a hazard we cannot regulate away.

I don’t want to diminish the effects of any injuries—we must view them through the lens of our obligations. We are to regulate unreasonable risks, not every risk, and we have to work judiciously. That means putting our resources where they can do the most good for the most people. This rule does not fit that model.