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House Wants to Halt CPSC Rule on Voluntary Recalls, Cautions on Information Disclosures

Wednesday, July 23, 2014
Sandler, Travis & Rosenberg Trade Report

The House of Representatives approved July 16 legislation that includes provisions reflecting lawmakers’ concerns about pending Consumer Product Safety Commission proposals on voluntary recalls of defective consumer goods and information disclosures. The Financial Services and General Government Appropriations Act for fiscal year 2015 (H.R. 5016) now moves to the Senate for further consideration.

H.R. 5016 would prohibit the CPSC from finalizing, implementing or enforcing a November 2013 proposed rule on voluntary recalls of defective consumer goods. A report on the bill from the House Appropriations Committee asserts that the existing voluntary recall system “has worked well over the past 40 years” due to a partnership between businesses and the CPSC and states that the committee opposes “unnecessary” changes to this system “that would serve to negatively impact small businesses.” However, a consumer interest group report issued earlier this year claimed that only 10 percent of children’s products recalled in 2012 were successfully corrected, replaced or returned.

The measure also cautions the CPSC about proposed regulatory changes that would ease restrictions on the Commission’s ability to make information about a product public without first notifying the item’s manufacturer. Current law requires the CPSC to take reasonable steps to ensure that any disclosure of information relating to a consumer product safety incident is accurate and fair, and the committee states that this mandate “protects the consumer by facilitating voluntary reporting by companies on potential product hazards and defects, while also ensuring a timely and thorough investigation is done to determine an appropriate corrective action plan.” The report warns that the CPSC’s proposed changes “threaten to undermine a successful partnership based on openness and trust between industry and the Commission” and advises the Commission to “work with industry and stakeholders on ensuring the process for disclosing information on potential product hazards and defects is both timely and accurate.”

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