August 12, 2011... Breaking News About CPSIA Reform
The Enhancing CPSC Authority and Discretion Act, H.R. 2715—legislation which reforms portions of the CPSIA—was signed into law by President Obama on August 12, 2011. The twenty-nine page bill has provisions to exclude used children's products from the lead limit bringing long due relief to the resale industry.
It is a relief and victory to see some "common sense" applied to the CPSIA. NARTS is gratified that our industry’s strength and perseverance have contributed to H.R. 2715 which includes measured steps to address some of the issues raised by our industry.
Consumer Product Safety Improvement Act of 2008
President Bush signed the Consumer Product Safety Improvement Act of 2008 (H.R. 4040) into law August 14. The CPSIA was passed to protect children from unsafe toys after the widely publicized recalls of 2007 which shook the publics trust. (Recalled toys included those with dangerously high lead content, toys with unsafe small part, toys with improperly secured and easily swallowed small magnets and toys made from chemicals that caused illness). However, the CPSIA does not just encompass toys. It regulates ALL products for children under 12 years of age. Clothing, cloth diapers, car seats, books, bicycles, jewelry, electronic products, blankets, sheets, bibs, strollers—EVERYTHING. The new law expands the definition of products covered to include “any consumer product designed or intended primarily for children 12 years of age or younger.”
The Act is ornately complex—and is a daunting piece of legislation to digest even for experts. The most significant issues are the standards of lead content and phthalates. (Details in Summary of Act below.) Our industry became affected later when the CPSC General Counsel, Cheryl A. Falvey, issued an opinion making the new lead standards retroactive. When the bill was signed into law no one said they intended to make it retroactive. The new lead content standards for all children's products sold take effect on Feb 10, 2009. Phthalate standards are NOT retroactive - at least not at this time. However, on December 4, 2008 the Natural Resources Defense Council and Public Citizen filed a lawsuit to have the phthalate standards made retroactive. Only products manufactured AFTER Feb. 10, 2009, will need to meet the new phthalates restrictions.
This legislation, while well intentioned, has unintended consequences that threaten the children's resale industry. The CPSC is working diligently with NARTS and other industry associations to provide clear guidance or issue regulations on how the new lead rules should apply to apparel and other products that are inherently lead free. The repercussions of making the lead standards retroactive can be enormous to our industry. Large portions of inventory that were safe and legal to sell on February 9th will be defined as "banned hazardous substances" overnight—regardless of whether these products contain dangerous materials.
Summary of Act:
For products subject to the new law, the law limits the amount of lead to trace levels beginning in February 2009. Further, it greatly reduces the amount of phthalates (used in plasticizers to make plastic softer and more malleable.) Under the new rules, the affected products must undergo testing (by certified third parties as of August 12, 2009), must comply with additional labeling requirements and must meet certain documentation requirements.
- Ban on children’s products containing lead above certain levels:
- 600 PPM for lead in any part, effective 180 days (February 10, 2009) after enactment.
- 300 PPM for lead in any part, effective 1 year (August 14, 2009) after enactment.
- 100 PPM for lead in any part, effective 3 years (August 14, 2011) after enactment (unless CPSC determines this standard is not technologically feasible).
- If CPSC determines 100ppm is technologically unfeasible, CPSC will establish a new standard lower than 300ppm.
- Every 5 years the CPSC must review and revise downward the lead limit based on technology available.
Prohibition on Sale of Certain Products Containing Specified Phthalates
- Children’s toys or child care articles that contain concentrations of more than 0.1 percent of DEHP, DBP or BBP are banned. Effective 180 days (February 10, 2009) after enactment.
- Children’s toys that can be placed in a child’s mouth or a childcare article that contains concentrations of more than 0.1 percent of DINP, DIDP or DnOP are banned for an interim period (pending an investigation by the chronic hazard advisory panel) beginning 180 days (February 10, 2009) after the date of enactment and until a final rule is promulgated by the CPSC.
Is it true that the CPSC Press Release issued on January 8 exempted resale & thrift shops from the law?
NO... NO... No... The law remains UNALTERED! Please read it VERY CAREFULLY! This is NOT a ruling, exemption or exception to the CPSIA... it is a Press Release. It is NOT definitive! It is a step in the right direction toward open communication, however nothing has changed. We have ALWAYS fully understood that manufacturers are required to test for lead, not resellers, but how is a store to know definitively if a product violates the lead requirements unless it tests. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties. Quite a dilemma!
What does this mean for shops that carry children's products?
If this law goes into effect UNALTERED it will be illegal to sell anything that does not meet the new safety standards. Anyone who does not comply will face penalties outlined under the new law.
How will we know if products meet the new safety standards?
That is the $64,000 question! Manufacturers claim that most products already meet the new safety standards and they most likely do. However, there is no way of proving the lead content when they come in resale shops. The required GCCs (General Conformity Certifications) are sent to distributors and retailers with their shipments and will not reach the secondary market. Manufacturers will certainly not test discontinued products, so even if they meet the new safety standards when manufactured, there would be no way of verifying. Products manufactured after August 14, 2009 will be required to have tracking labels for identification; however, there will be a transition period until you will start getting tagged merchandise.
How will this affect consumers?
The cost of testing that manufacturers face will be passed on to consumers, resulting in higher costs and fewer choices for them. It will become even more imperative for the resale industry to be able to provide a practical and affordable shopping choice to consumers. What happens to us will affect resale customers and suppliers.
We believe the public will be confused and upset when they realize the scope of this Act—as many consumers believe it is only about toys. They are just beginning to realize the affect it will have on them and the environment. If every shelf in resale and thrift shops across the country was cleared and ton upon ton of existing goods “taken to the curb,” the negative impact on the environment would be unmeasurable! What will parents do when they cannot sell or consign their children's clothes? Many parents have to sell last year's clothes in order purchase next years.
Who will enforce the Act?
Under the new law the State Attorney General (AG) offices have joint enforcement power. (Some states also have their own product safety laws.) This means... you have two agencies policing you! To enforce the Act they will have to police everything from ports of entry, manufacturers, wholesalers to retailers—encompassing very known stream of commerce.
What are the penalties?
Under the new law, civil penalties for failure to report and other violations of the act are significantly increased. Penalties will increase from $8,000 to $100,000 for each violation, and the current maximum penalty of $1.825 million is increased to $15 million. Criminal penalties will include higher fines, and prison sentences can reach five years under the new law.
Can I believe all I read & hear?
Do NOT believe everything you read and hear about this issue—untruths, misconceptions and rumors are running rampant. Some reporters are not presenting accurate information, usually due to the complexity of the issue and their lack of understanding. If there is any breaking news, we will notify our members immediately via broadcast email and will post a notice on this Web page.
Related Links - Letters, Articles, Blogs & Videos
Scrap the CPSIA - Part I - Forbes Commentary - A Must Read Series of Commentaries!
Maybe I'm slow but I don't get it... - Response to CPSC Video - This is Must Read!
Lead article - Amer. Council on Science and Health - Dr. Gilbert Ross - 1/9/09 - Letter to Editor of LA Times
Disclaimer: This information is provided as an overview of the legislation for the convenience of NARTS members and other resale professionals, and should not be considered an authoritative account or interpretation of the Act. Significant work is left to be done by the CPSC to propose and adopt implementing regulations, and there is substantial room for interpretation of various provisions of the Act.