HTA's Testimony on CPSIA Reform to the House Commerce Committee, April 7, 2011

Hello. My name is Dan Marshall. I am the Founder and Vice President of the Handmade Toy Alliance. The HTA represents 644 small businesses affected by the unintended consequences of the Consumer Product Safety Improvement Act (CPSIA) of 2008.

My wife Millie and I own Peapods Natural Toy Store in St. Paul, Minnesota. I am here today with my daughter Abigail and fellow HTA Board members Rob Wilson of Challenge and Fun in Massachusetts and Randall Hertzler of euroSource in Pennsylvania.

The HTA began in November of 2008, after I began to understand how the newly-passed CPSIA would decimate the small batch manufacturers who supply our store. Since then, I've been working with hundreds of other small business owners to save small batch manufacturers from regulatory burdens of the CPSIA, the greatest of which is the cost of mandated third party testing. These fixed costs, which are easily bourn by mass market manufacturers who make tens of thousands of units at a time, are simply impossible for small businesses that make toys, children's clothing and accessories in batches of a few dozen at a time, often in home-based studios.

These required tests are not limited to lead content testing. Toys, for example, will be subject to mandatory ASTM F963 testing, which requires the destruction of multiple units of each toy. The CPSC's current schedule would mandate ASTM testing as soon as this October. Unless the CPSIA is reformed, hundreds of small American toymakers will not survive that date.

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Unlike similar product safety legislation such as The Food Safety Modernization Act, FDA food labeling rules, or California's Proposition 65, the CPSIA makes no allowances whatsoever for small businesses. Nor does it allow the CPSC any discretion in how it applies third party testing requirements to various types of products. Bicycles, books, hand-knit sweaters, and wooden toy cars are all treated the same.

As a result, the CPSIA as it stands is basically unenforceable. Key provisions have been stayed numerous times. The CPSC is slowly being transformed from public safety guardian into an enforcer of procedures and technicalities dictated by Congress at huge cost. Congressional action has dramatically undermined the CPSC, an agency which has effectively protected the American public for almost 40 years.

Meanwhile, we've watched numerous trustworthy businesses fold because of the CPSIA. Untold others have decided not to pursue their dreams as toymakers or crafters. We've even begun to see secondary effects such as the end of Mothering Magazine, which closed in February after 35 years, citing reduced ad revenues due to the CPSIA's impact on their advertisers.

If the CPSIA is not amended, hundreds more small family businesses will perish for no good reason.

Thanks to the work of this committee, we have a way forward. Our alliance endorses the draft amendment because of the relief it provides for our members. This bill requires either an exemption from third party testing or alternate testing procedures, such as XRF screening for lead in substrates, for products that are produced in small quantities. This is exactly what we have been asking for since the formation of our organization. Small batch manufacturers would be given a safety valve which was originally left out of the CPSIA.

We desire a thoughtful and measured reform worthy of meaningful bipartisan discussions. These issues deserve a full hearing to ensure that a high degree of consumer protection is maintained. We do not wish to create loopholes that would benefit the types of irresponsible companies that created the toy safety scare in the first place.

We urge you to reach out to your colleagues in the Senate to reach a bipartisan agreement. The CPSIA was the product of a strong bipartisan effort in 2008 and its reform requires the same effort. We believe this discussion draft is a suitable foundation for that discussion. We urge both houses of congress to set aside differences and find a way to see this reform process through. Our family businesses are watching the process closely. We're depending on you.

In conclusion, on behalf of our members, I would like to thank this committee for addressing this important issue and urge you to quickly pass meaningful reform of the CPSIA. Thank you.

Press Release: HTA sees new momentum as they prepare to testify; endorsing new bill amending the CPSIA

The Handmade Toy Alliance (HTA) will testify at the upcoming Congressional hearing on April 7, 2011 regarding a discussion draft to amend the Consumer Product Safety Improvement Act (CPSIA) from the House Subcommittee on Commerce, Manufacturing and Trade. HTA Founder and Vice President, Dan Marshall (Peapods Natural Toys -MN) is set to testify on behalf of the HTA and its members endorsing the progress this new bill proposes. Board members Rob Wilson (Challenge and Fun – MA) and Randall Hertzler (euroSource – PA) will accompany Marshall at the hearing and attend legislative visits.

During the last year the HTA and its members have continued to work diligently, to bring meaningful discussion and reform to the CPSIA. The proposed amendment is seen as a step in the right direction toward reaching a middle ground, and ultimately saving many small businesses from the unintended consequences of the CPSIA. HTA Board member Jill Chuckas (Crafty Baby – CT) states, "While this new bill does not give us everything we've been asking for, we believe it saves most of our member businesses from extinction."

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The bill focuses on several key issues that give way to reducing the financial burden the original law inflicted on small businesses. Hertzler comments, “Rather than requiring third party testing for every children’s product, the bill seeks to restore the Consumer Product Safety Commission’s (CPSC's) ability to set its own priorities, allowing the Commission to define specific categories for specific tests, in areas where the benefits from required third-party testing justify the costs.”

The movement towards reform gives the HTA a new wave of momentum as they prepare to travel to D.C. in support of the reform bill. Marshall announced, "The Handmade Toy Alliance plans to endorse this bill both for its text and also for the context we hope it will create—a bipartisan and bicameral dialog which quickly leads to meaningful reform of the CPSIA."

The HTA was formed in November of 2008 in response to the CPSIA, and consist of 643 member businesses, including retail stores, toymakers and children's product manufacturers from across the country who want to preserve consumer access to unique handmade toys, clothes and all manner of small batch children's goods in the USA.

HTA Endorses New CPSIA Reform Bill

On Tuesday, the House Subcommittee on Commerce, Manufacturing and Trade released a discussion draft of a proposed amendment to the CPSIA. This document is the first attempt to begin a meaningful discussion of CPSIA reform since the demise of Rep. Waxman's bill a year ago, which we had endorsed with reservations.

In the intervening year, we've seen more small businesses fold because of the unintended consequences of the CPSIA. And, we've seen a momentous election which drastically changed the political landscape on Capitol Hill.

While this new bill does not give us everything we've been asking for, we believe it saves most of our member businesses from extinction. Furthermore, we are relieved that the bill is by no means a wholesale repeal of the CPSIA but seeks to find a middle ground. We are hopeful that Senate Democrats will see it as a thoughtful and measured reform worthy of meaningful bipartisan discussions.

In general, this bill would restore the CPSC's ability to set its own priorities and would allow the commission to use the tool of third party testing as a scalpel rather than as an axe. Instead of requiring third party testing for every children's product, the commission could target specific categories for specific tests in areas where the benefits of testing would outweigh the costs. This would restore the commission's volition to analyze risk and greatly reduce the need for businesses to repetitively test perfectly safe products.

Furthermore, the bill would exempt one-of-a-kind items from third party testing and would require the CPSC to either exempt small batch manufacturers from third party testing or allow us to use alternative testing methods such as XRF screening for lead in substrates. Small batch manufacturers would be given a safety valve which was originally left out of the CPSIA.

This by far the best bill we've seen to date. The Handmade Toy Alliance therefore endorses this bill both for its text and also for the context we hope it will create—a bipartisan and bicameral dialog which quickly leads to meaningful reform of the CPSIA.

Image by Robert Mahar.

Our (Unpublished) Letter to the Editor of the New York Times

We sent the following letter to the New York Times in response to their staff editorial opposing reform of the CPSIA. One week later, we have received no response and our letter has not been published--nor has any other response to their extremely shallow editorial.

February 24, 2011

Dear Editors,

The past two years have been heartbreaking. Since the passage of the Consumer Product Safety Improvement Act (CPSIA) in 2008, we've seen dozens of our friends and colleagues lose their family businesses. They were forced to close not because their products were unsafe, but because they simply could not afford the costs of third party testing which is mandated by the CPSIA.

Imagine our dismay this morning when your newspaper described the plight of these families as a “canard”, as a misleading fabrication. Much as we wish that the CPSIA effects on small businesses were make-believe, they are, as your own paper has reported, very real and very painful.

A large multinational company like Mattel can afford to spend a few hundred dollars to test a production run of 200,000 plastic toys in China, but a small-batch toymaker in the US simply cannot afford to spend the same amount on batch of 20. The mathematics of the CPSIA are skewed entirely in favor of big business.

As many Democrats, Republicans and even the CPSC itself has said, we need common-sense reform of the CPSIA which protects small businesses while preserving safety. We hope that your newspaper will look past the canard that this is all “part of a standard antiregulation litany” and appreciate the real effects of the CPSIA on real small businesses owned by real people.

Sincerely,

The Handmade Toy Alliance

Video of Jolie Fays's CPSIA Testomony to the House Commerce Committee

Here is Jolie's main testimony from the February 17th CPSIA hearing in the House Commerce Committee:

Jolie also fielded a number of questions from representatives. In the video below, Jolie responds to Representative Harper about the cost of third party testing, based on quotes she received shortly after the CPSIA was passed in 2008:

Mothering Magazine Ceases its Print Publication After 35 Years, in Part Due to CPSIA

We were saddened to learn that Mothering Magazine has ceased it's print publication after 35 years and will now be online only. In a statement, longtime editor Peggy O'Mara wrote:

"Many of our advertisers have been hard hit by the economy. Toy manufacturers have been burdened by the cost of complying with the new regulations of the Consumer Product Safety Improvement Act (CPSIA). Many of our sling and baby-carrier advertisers experienced declining sales or went out of business altogether in 2010 as a result of loss of sales due to the Consumer Product Safety Commission (CPSC) recalls of infant carriers."

This serves as a very unfortunate reminder that the CPSIA has not only affected the small businesses which are burdened by its excessive regulations, but also other small businesses like Mothering which rely on them for support. We wish Mothering the best as it transitions to online-only.

Jolie Fay's Testimnony to House Commerce Committeee CPSIA Hearing

Good afternoon, my name is Jolie Fay. I am the owner of Skipping Hippos. I make
children’s ponchos in my home in Portland, Oregon. I am testifying on behalf of the 619 Handmade Toy Alliance members. We are the people knitting hats on the train, we are the mothers in line with you at the store, and we are the people from your church and home towns who have grown up in families that craft. We are your neighbors, your families and your constituents and we need your help to bring common sense changes to the CPSIA.

Our businesses were born from the desire for safe children’s products. We make them
with care and attention, most often from materials purchased from our local craft stores.Our dreams were to build heritage products that will be cherished and remembered, and saved for generations.

Our broad membership experiences the unintended consequences of the CPSIA indifferent ways.

Micro-sized businesses that craft and retail toys and children’s products make up half of our membership. Often, these businesses are family or single owner businesses with no employees who produce and sell products in very small batches. The CPSIA makes no provision for these businesses to be able to operate. People crafting in their homes are expected to third party test the same way as mass market manufacturers. The costs of 3rd party testing for lead and ASTM standards are prohibitive in very small batches, tracking and labeling requirements are too burdensome and these micro-businesses find the law and its requirements too complex to interpret, understand and apply.

HTA Board members Jolie Fay and Randall Hertzler

For example, at the Hollywood Senior Center in Portland, there is a small retail shop. The items in the shop are exclusively made by their members. Handmade trucks and planes are made by retired loggers in their 70’s and 80’s. They are on an incredibly small fixed income and would never be able to afford a single ASTM laboratory test. The workmanship that has developed over a lifetime helps contribute a small, but very substantial supplement to their monthly income. These projects keep them active and give them meaning to each day. These are artisans, but this law makes them criminals.

Another segment of HTA members are small batch businesses, producing multiple items
and selling in boutiques and on line. They also are not able to absorb the testing costs for their products as the CPSIA makes no provision for these entities to continue to be economically viable after absorbing the costs of full CPSIA compliance. Again, they are treated equivalent to mass market manufacturers. Companies, who create only 20 or so products, producing in batches of 10 and 20 units, simply can not absorb the testing costs and still expect to charge a reasonable price for the added expense.

Representing 19% of our membership, a third group hurt by the CPSIA is small specialty toy retailers. These are the “mom and pop” toy stores tucked into towns all across America. The CPSIA removes the ability for them to sell almost all of the safe local products and many international products. Loss of specialty products from Europe, particularly, tilts the children’s products marketplace in favor of mass produced items and removes an opportunity for specialty retailers to differentiate themselves. Without the ability to offer products unique, which sets their store apart from the competition, there is little reason for the existence of the small specialty toy retailers. So the CPSIA limits consumer choice unnecessarily and creates a regulatory barrier to international small batch manufacturers.

The final group is specialty toy importers, representing 2% of our membership. It is a small percentage, but a big component in the culture of specialty toys in America. Within this “melting pot” culture that we live in, these importers provide access to many safe products from our ancestors’ and countries of origin, enriching the value of play and helping the specialty market survive. The CPSIA treats these small scale importers as if they were mass market manufacturers and therefore they suffer alongside USA based small batch manufacturers.

I grew up in Wyoming, where my great grandparents were homesteaders. For generations, my family has made clothes, toys, saddles, and belts for their children. I cherish these items because they are from my family, and they were made with care, just like what I make. Our members are people like me, from all across the country, making safe products that we simply cannot afford to third party test. I am here today because I want my children to understand and learn from our entrepreneurial spirits. Crafting gives them joy, selling it gives them reward.

While the HTA has worked closely with the CPSC – submitting comments on pending
rules, attending CPSC sponsored workshops, regular email and phone contact with CPSC staff - we feel strongly that the current legislation does not grant the CPSC the flexibility to address our members’ needs. Our membership is in need of a legislative fix that only you, in Congress, can give.

Solving the problems of the CPSIA is not only for our members’ immediate financial
relief, but will save generations of future handmade products. For thousands of years, cultures have been studied through their handcrafted toys. In every museum around the world, there are artifacts of handmade toys –connecting the cultures of the past to societies of today. What will our legacy be if the CPSIA destroys our generations’ ability to share in this piece of history?

Thank you for the opportunity to speak before you today. Please note that in my written testimony, I have shared some of our ideas to rectify the unintended consequences of the CPSIA.