```

[Senate Hearing 114-220]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-220

                        CONSUMER PRODUCT SAFETY 
                         AND THE RECALL PROCESS

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON CONSUMER PROTECTION,
                       PRODUCT SAFETY, INSURANCE,
                           AND DATA SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 8, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                         U.S. GOVERNMENT PUBLISHING OFFICE 

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                          Washington, DC 20402-0001

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

  SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, INSURANCE, AND 
                             DATA SECURITY

JERRY MORAN, Kansas, Chairman        RICHARD BLUMENTHAL, Connecticut, 
ROY BLUNT, Missouri                      Ranking
TED CRUZ, Texas                      CLAIRE McCASKILL, Missouri
DEB FISCHER, Nebraska                AMY KLOBUCHAR, Minnesota
DEAN HELLER, Nevada                  EDWARD MARKEY, Massachusetts
CORY GARDNER, Colorado               CORY BOOKER, New Jersey
STEVE DAINES, Montana                TOM UDALL, New Mexico

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 8, 2015..................................     1
Statement of Senator Moran.......................................     1
    Letter dated January 30, 2014 to Robert S. Adler, Acting 
      Chairman, U.S. Consumer Product Safety Commission from 
      Senators Robert P. Casey, Jr. and Patrick J. Toomey........     3
    Letter dated May 30, 2014 from Ann Brown to Hon. Fred S. 
      Upton, Chairman, and Hon. Henry A. Waxman, Ranking Member, 
      Committee on Energy and Commerce, U.S. House of 
      Representatives............................................     3
Statement of Senator Blumenthal..................................     6
Statement of Senator Klobuchar...................................    18
Statement of Senator Daines......................................    20
Statement of Senator Nelson......................................    25
    Prepared statement...........................................    25

                               Witnesses

Hon. Elliot F. Kaye, Chairman, Consumer Product Safety Commission     7
    Prepared statement...........................................     9
Hon. Ann Marie Buerkle, Commissioner, Consumer Product Safety 
  Commission.....................................................    11
    Prepared statement...........................................    12
Frederick (Rick) Locker, Partner, Locker Greenberg & Brainin, 
  LLP, on behalf of the National Association of Manufacturers....    31
    Prepared statement...........................................    33
Jonathan Gold, Vice President, Supply Chain and Customs Policy, 
  National Retail Federation.....................................    41
    Prepared statement...........................................    43
Cheryl A. Falvey, Partner, Crowell & Moring LLP; former General 
  Counsel, Consumer Product Safety Commission....................    45
    Prepared statement...........................................    47
Nancy A. Cowles, Executive Director, Kids In Danger (KID)........    50
    Prepared statement...........................................    51

                                Appendix

Walt A. Sanders, Washington DC Counsel, Safe Fields Alliance, 
  prepared statement.............................................    61
Letter dated July 20, 2015 to Hon. Elliot F. Kaye, Chairman, U.S. 
  Consumer Product Safety Commission from Darren Gill, Vice 
  President, FieldTurf; Rom Reddy, Managing Partner, Sprinturf; 
  and Heard Smith, President, Astroturf..........................    62
Al Garver, President, Synthetic Turf Council, prepared statement.    63
Response to written questions submitted to Hon. Elliot F. Kaye 
  by:
    Hon. Jerry Moran.............................................    64
    Hon. Cory Gardner............................................    69
    Hon. Bill Nelson.............................................    70
    Hon. Richard Blumenthal......................................    71
    Hon. Edward Markey...........................................    71
Response to written questions submitted to Hon. Ann Marie Buerkle 
  by:
    Hon. Cory Gardner............................................    73
    Hon. Bill Nelson.............................................    73
    Hon. Edward Markey...........................................    74
Response to written questions submitted by Hon. Bill Nelson to:
    Cheryl A. Falvey.............................................    74
Response to written questions submitted to Nancy A. Cowles by:
    Hon. Bill Nelson.............................................    75
    Hon. Richard Blumenthal......................................    75
 
                        CONSUMER PRODUCT SAFETY 
                         AND THE RECALL PROCESS

                              ----------                              

                       THURSDAY, OCTOBER 8, 2015

                               U.S. Senate,
      Subcommittee on Consumer Protection, Product 
              Safety, Insurance, and Data Security,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:02 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Jerry Moran, 
Chairman of the Subcommittee, presiding.
    Present: Senators Moran [presiding], Blunt, Gardner, 
Daines, Nelson, Klobuchar, and Blumenthal.

            OPENING STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Good morning. I call the Subcommittee 
hearing to order and welcome our guests.
    This is our second of this Congress as efforts to provide 
oversight to the Consumer Protection--excuse me. Let's do this 
again.
    [Laughter.]
    Senator Moran. Good morning. Welcome. We are glad to have 
you here. And this hearing is now called to order.
    This hearing is our Subcommittee's second of this Congress 
as it relates to oversight of the Consumer Product Safety 
Commission. And we have the Chairman and Commissioner Buerkle 
with us, and we are delighted to hear what they have to say in 
just a few moments.
    Then we will be joined by a second panel of experts who are 
involved in the consumer product community and particularly on 
the issues that are scheduled to be discussed in this 
subcommittee hearing today.
    Product safety is not a Republican or Democrat issue; it is 
something that I can't imagine that anyone doesn't care about. 
The hearing today will focus on CPSC's recalls, the 
Commission's efforts to spot emerging hazards and remove 
potentially dangerous products from the marketplace quickly.
    Specifically, I look forward to discussing the Retailer 
Reporting Program, a voluntary program through which 
participating retailers submit weekly and product-specific 
reports to the Commission.
    We will also discuss the Commission's proposed rule on 
voluntary remedial actions and guidelines for voluntary recall 
notices, commonly known as the Voluntary Recall Rule. We will 
also discuss how the proposed rule may impact the longstanding 
Fast Track Product Recall Program.
    CPSC has a long history of success in its mission to keep 
Americans safe. The Commission's track record, specifically on 
consumer product recalls, has been marked by innovative thought 
and engagement with relevant stakeholders.
    A prime example of this out-of-the box thinking was the 
creation of the Commission's Fast Track Program in the 1990s, 
where it instituted alternative recall procedures to work 
closely with companies to expedite the recall process. The 
result of this program was to allow for an open exchange of 
critical information between the Commission and the recalling 
company and to create flexibility to remove potentially harmful 
products from shelves more quickly.
    Ultimately, it was American consumers and families who 
benefited. The Ford Foundation and Harvard University named 
CPSC the winner of the Innovations in American Government Award 
for its work on this program. And it has received high marks 
from consumer groups and industry stakeholders alike.
    CPSC adopted a similarly innovative approach to its market 
surveillance and emerging hazards identification activities 
when it instituted the Retailer Reporting Program more than a 
decade ago. This program created incentives for participating 
retailers to hand over detailed and product-specific incident 
reports to the Commission in exchange for recognition by the 
Commission that participation in the program satisfied 
statutory reporting obligations.
    This recognition was a true benefit to participating 
companies, as it provided a measure of certainty on how to meet 
the obligations. In exchange, the Commission gained access to a 
trove of near-realtime data about consumer product trends in 
the marketplace.
    Recent Commission activity, however, indicates a potential 
shift with respect to CPSC's attention on these matters. With 
respect to Fast Track, recent attempts to advance the proposed 
Voluntary Recall Rule have drawn overwhelmingly bipartisan 
concern that the proposals would unnecessarily delay the recall 
process.
    Last year, Senators Casey and Toomey sent a letter to then-
Acting Chairman Adler stating that the proposed changes seemed 
to jeopardize the efficiency of the existing process, which 
could increase the risk of harm to consumers.
    In a letter dated May 30, 1914--2014--I thought my glasses 
would make a difference.
    [Laughter.]
    Senator Moran. In a letter dated May 30, 2014, former CPSC 
Chairwoman Ann Brown voiced similar concerns. Chairwoman Brown 
described the Fast Track Program as hugely successful, 
resulting in recalls being announced faster and better 
protecting consumers from injury. She believed the proposed 
rule would undermine the Fast Track Program, removing 
incentives for firms to participate in the first place.
    And I ask unanimous consent that these letters be entered 
into our record.
    So ordered.
    [The information referred to follows:]

                                       United States Senate
                                   Washington, DC, January 30, 2014
Robert S. Adler,
Acting Chairman,
U.S. Consumer Product Safety Commission,
Bethesda, MD.

       Re: Proposed Rulemaking on Voluntary Product Recalls

Dear Chairman Adler:

    We have recently become aware of a proposed rule by the Consumer 
Product Safety Commission (CPSC) that could greatly increase the cost 
and complexity of recalling harmful consumer products.
    As you know, the agency currently operates a ``Fast Track'' program 
that is well regarded and has a history of success. Since its inception 
in 1997, the program has allowed companies to recall products when they 
have reason to believe their products will harm consumers. The vast 
majority of companies across the Nation comply with the program, and 
companies in Pennsylvania often initiate product recalls as a 
precautionary measure, even where there is no evidence of injury to 
consumers. As the CPSC itself points out, the advantage of its award 
winning program is that it permits companies to remove potentially 
hazardous products from the marketplace as quickly and efficiently as 
possible, without requiring CPSC staff to make a preliminary 
determination that the product is hazardous. Because the program makes 
recalls voluntary and utilizes standard-form documents that can be 
expeditiously reviewed and executed, product recalls occur rapidly and 
efficiently.
    Unfortunately, the proposed changes seem to jeopardize the efficacy 
of the existing process, which could increase the risk of harm to 
consumers. The proposed rule makes ``voluntary'' product recall Action 
Plans legally binding and requires companies to state with specificity 
each instance in which a product causes harm. We worry that these 
changes may discourage companies from initiating precautionary recalls 
and increase compliance and administrative costs. Companies that recall 
products will have to utilize lawyers to negotiate their ``legally 
binding'' documents and will involve upper corporate management to 
approve forward-looking obligations. Similarly, the CPSC will have to 
devote more time and personnel to negotiating recall documents and may 
be subject to litigation to determine whether a particular product is 
hazardous. Given these issues, we are concerned that the proposed 
change could ultimately keep harmful products on store shelves for 
longer periods of time, and thus increase the risk of harm to 
consumers.
    Given the longstanding success of the Fast Track program, and the 
paramount importance of maintaining effective procedures for recalling 
dangerous products, we encourage the Commission to very carefully 
consider any changes it seeks to make to its Fast Track recall program.
            Sincerely,
                                      Robert P. Casey, Jr.,
                                                 United States Senator.
                                         Patrick J. Toomey,
                                                 United States Senator.
                                 ______
                                 
                                                       May 30, 2014
Hon. Fred S. Upton,
Chairman,
Committee on Energy and Commerce,
U.S. House of Representatives,
Washington, DC.

Hon. Henry A. Waxman,
Ranking Minority Member,
Committee on Energy and Commerce,
U.S. House of Representatives,
Washington, DC.

Dear Chairman Upton and Ranking Minority Member Waxman,

    I had the privilege of serving as Chairman of the U.S. Consumer 
Product Safety Commission from March 1994 until November 1, 2001. 
During my time as Chairman, we prevented numerous deaths and injuries 
through enforcement actions, product recalls and working with 
consumers, consumer groups and firms regulated by the Commission. 
Product safety is best accomplished when government, industry and 
consumers work together.
    Under the Consumer Product Safety Act (CPSA), manufacturers, 
distributors, and retailers of consumer products must report certain 
potential product hazards to the Commission. They must report 
immediately if they obtain information which reasonably supports the 
conclusion that a product (1) fails to comply with certain mandatory or 
voluntary standards, (2) contains a defect which could create a 
substantial product hazard, or (3) creates an unreasonable risk of 
serious injury or death.
    If the Commission believes that a product presents a substantial 
product hazard to the public, it may pursue corrective action. Early in 
my Chairmanship, I learned that some number of companies were offering 
to conduct product recalls but because of entrenched procedures, those 
firms were not allowed to proceed with a recall until the CPSC staff 
performed a technical evaluation of the product involved, agreed that 
there was a product safety problem by making a ``Preliminary 
Determination'' (PD) of hazard, and then sent a letter to the firm 
advising it of the preliminary determination of hazard and requesting a 
product recall.
    This process could and often did take many months-months without a 
recall, months where consumers were at risk, even though the firm was 
ready, willing and able to proceed with a recall at the time of its 
report. We changed this bureaucratic process early in my tenure as 
Chairman by creating the Fast Track Product Recall program in August 
1995.
    Originally called the ``No PD'' program, firms who reported to 
CPSC, identified a product safety problem, agreed to and initiated a 
recall within 20 working days of their report, no longer required a 
staff technical evaluation of the problem reported. Rather than 
performing a technical evaluation to confirm the product problem 
reported upon, the CPSC staff evaluated the remedy proposed to assure 
that it adequately addressed the problem identified and spent time 
working with the firm on conducting the product recall.
    The Commission made this Fast Track program permanent on March 27, 
1997, and it has been hugely successful. More than one-half of all CPSC 
recalls are now conducted through the Fast Track Program. Recalls 
conducted through this program benefit consumers, the recalling firm 
and the CPSC. Recalls are announced faster better protecting consumers 
from injury. Recalling firms do not receive a letter stating that the 
CPSC staff has preliminarily determined their product is a substantial 
product hazard. And the government spend less resources investigating a 
product that a company has already agreed should be recalled.
    The CPSC staff received a ``Hammer'' Award from Vice President 
Albert Gore's National Partnership for Reinventing Government for the 
Fast Track Product Recall Program. This award honored Federal employees 
for significant improvements to customer service and for making the 
government work more efficiently. Also in 1998, the Fast Track Program 
was named a winner of the prestigious Innovations in American 
Government award, an awards program of the Ford Foundation and Harvard 
University, administered by Harvard University's John F. Kennedy School 
of Government in partnership with the Council for Excellence in 
Government.
    Now this award winning program appears to face the risk of being 
unintentionally undermined by a rule proposed by the CPSC in November 
2013 that is intended to enhance voluntary recalls by setting forth 
principles and guidelines for the content and form of voluntary recall 
notices that firms provide as part of corrective action plans. One of 
the CPSC's proposals is to prohibit firms desiring to conduct a 
voluntary recall from disclaiming that there is a hazard presented by 
their product unless the Commission agrees to the disclaimer. I am 
concerned that this proposal if adopted could undermine the efficacy of 
the Fast Track program. Another proposal would classify a voluntary 
Corrective Action Plan (CAP) as ``legally binding'' thus transforming a 
CAP into a Consent Decree, potentially delaying an otherwise effective 
recall weeks or even months due to haggling over legalities. A Fast 
Track procedure would be rendered impossible under these circumstances.
    CPSC urges firms to err on the side of caution by reporting 
potential product safety problems and conducting recalls. It is my 
understanding that virtually every firm that reports under the CPSC 
mandatory reporting requirement and requests to participate in a Fast 
Track recall,asserts that their product does not present a substantial 
product hazard, but nonetheless they wish to conduct a recall. If 
reporting firms are not allowed to make this disclaimer, they have no 
incentive to participate in the Fast Track Program.
    Not making the disclaimer may be perceived in product liability 
litigation as akin to admitting that the product reported on is a 
substantial product hazard. If so, reporting firms might just as well 
report to CPSC, not offer to conduct a recall, and take the chance that 
the CPSC staff might conclude their product is not a substantial 
product hazard and that no recall is necessary.
    If this occurs, recalls would be delayed, CPSC would be required to 
use substantial technical resources to evaluate products so that the 
staff can determine whether to make a preliminary determination of 
hazard, and consumers are left unprotected potentially for many months.
    I respectfully request that the Committee urge the Commission to 
consider its proposed rule carefully and to assure that it does not 
adversely affect CPSC's Fast Track Product Recall Program.
            Sincerely,
                                                 Ann Brown.
    CC:

The Honorable Lee R. Terry, Chairman
Subcommittee on Commerce, Manufacturing and Trade

The Honorable Jan Schakowsky, Ranking Member
Subcommittee on Commerce Manufacturing and Trade

The Honorable John D. Dingell
Member of Congress

The Honorable Robert A. (Bob) Adler, Chairman
U.S. Consumer Product Safety Commission

The Honorable Marietta S. Robinson, Commissioner
U.S. Consumer Product Safety Commission

The Honorable Ann Marie Buerkle, Commissioner
U.S. Consumer Product Safety Commission

    Senator Moran. Despite these concerns, the Voluntary Recall 
Rule is explicitly included in the Commission's Fiscal Year 
2016 rulemaking agenda and operating plan, released just a few 
weeks ago. This rule would require that the terms of a 
corrective action plan, once entered into, be legally binding 
upon manufacturers and would prohibit them from disclaiming the 
presence of a product hazard.
    Previously, the Chairman has indicated this rule is not a 
priority for the agency, so I am anxious to hear from the 
commissioners what has prompted its inclusion in the Fiscal 
Year 2016 rulemaking agenda and discuss the merits of the rule 
as it pertains to the fundamental objective of the Commission 
and this subcommittee: ensuring consumer safety.
    The Commission's current Retailer Reporting Program allows 
participant firms to report, on a voluntary basis, timely, 
detailed, and product-specific information. The chairman has 
often said that he believes the Commission to be a data-driven 
agency. At the same time, some on the Commission have expressed 
concerns about CPSC's ability to handle large volumes of 
product safety data and to make sophisticated safety inferences 
from that reporting.
    This summer, CPSC staff went so far as to inform RRP 
participants that the Commission would no longer consider RRP 
submissions to satisfy the Commission's voluntary reporting 
requirements and that it would no longer accord confidentiality 
to those reports.
    The program remains a pilot program, despite having been 
initiated nearly a decade ago, and there is growing 
consternation among program participants who want clear 
guidance from the Commission of its intentions with respect to 
RRP.
    It is intuitive that this data could be used to identify 
trends on emerging product safety hazards, and thus the program 
clearly has potential to improve consumer safety and save 
lives. But if the program is not functioning properly and 
generating positive results, if there is not a clear benefit to 
the Commission and to program participants, then we ought to 
have a serious discussion on how to improve it, because in my 
view the consumer would ultimately benefit.
    As the Commission weighs its decision, it would be useful 
to hear directly from commissioners and other stakeholders 
today about CPSC's data analytical capabilities and how it can 
best leverage existing resources, including cooperative 
partnerships with the private sector, to make critical safety 
inferences from retailer data.
    Before I turn the microphone over to the Ranking Member, 
Senator Blumenthal, I want to reiterate that we all share this 
common goal of protecting consumers, and, on these issues that 
I have mentioned, there is a clear and reasonable oversight 
role for this subcommittee to provide toward that end.
    Thank you to all of our witnesses for being here today, and 
I look forward to the testimony and a conversation that will be 
productive as we discuss these issues.
    And I welcome and thank my Ranking Member, Senator 
Blumenthal, and recognize him.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Senator Moran. Mr. Chairman, 
thank you for having this hearing, which is enormously 
important to consumer protection.
    Thank you to our witnesses, Chairman Kaye and Commissioner 
Buerkle, for being here today. Thank you for your very diligent 
and dedicated work on a commission and a mission that is 
paramount in importance to ordinary Americans, working 
families, and consumers, who rely on the safety of their 
products when they buy and use them. And they often are, 
unfortunately, unaware of the dangers that are created by those 
products, particularly defects in those products.
    This committee, unfortunately, knows quite a bit about 
recalls. We have seen what happens when companies fail to 
disclose or report, whether by neglect or deception, dangerous 
and sometimes deadly product defects to oversight agencies like 
yours.
    We also know all too well the dangers that are posed by 
recalls that are not conducted with sufficient diligence and 
haste. And this committee and its members are keenly aware of 
the needless, preventable tragedies inflicted on Americans 
because they are all too often kept in the dark, and are not 
notified of hazards by corporations or individuals with the 
responsibility to do so.
    I have been fighting on the issue of automobiles for better 
disclosure. And the reason is, and I think also the reason for 
Americans' increased interest, is the latest instance with GM, 
where 120-plus people were killed by a defective ignition 
switch, known to the company for years before it was disclosed, 
and then only disclosed because of public pressure and because 
of investigative work by some of the government agencies with 
responsibility. But it was too late, much too late, for those 
120-plus people who were killed, as well as their families, and 
for others who were injured as a result.
    Americans deserve and need to know whether their cars, 
toys, or appliances or any other products are unsafe, and they 
should be notified not years down the road but right away.
    The sad reality is that recalls, whether for cars or 
consumer products, so often fail to inform the public 
adequately and so often fail to get defective and unsafe 
products off the road or out of homes. Kids in Danger, whose 
executive director is testifying today, has research showing 
that the recall completion rate for children's products, 
whether they are fixed or destroyed, is only about 10 percent. 
That is absolutely shocking.
    Among the children's products that were already in 
consumers' hands by the time they were recalled, the recall 
completion rate is a woeful 3.96 percent. Such figures are 
appalling and astonishing, to say the least, and even more so 
when they concern a vulnerable population, like our children, 
who couldn't tell you about the CPSC or any other government 
agency that is supposed to protect them or about the nature of 
the corporations that manufacture those products.
    And let me stress this point--that is why the CPSC's 
proposed rule for correction action plans to put in place 
commonsense baseline responsibility for companies that agree to 
voluntary recalls is so critically important. Too few consumers 
are ever notified about product recalls. The notices, even when 
they get them, are vague and ambiguous and, in fact, sometimes 
downright confusing and deceptive. And they all too often also 
fail to stress the urgency of taking remedial action.
    When the CPSC has no mechanism to ensure that these 
companies are actually keeping their word and faithfully 
conducting their recalls, too much uncertainty and danger are 
left for the American consuming public.
    I know certain members of certain industries are up in 
arms. I know that there is opposition to this proposed rule and 
that making voluntary recalls legally binding is said to be 
somehow too onerous, financially burdensome or cumbersome on 
these companies.
    But the simple fact of the matter is, all we are saying is 
that companies should have to do what it has committed to do: 
to warn consumers of a potentially dangerous product and then 
let them clearly know the steps they can take to avoid the 
danger. It is about accountability. It is just fair, and it is 
also common sense.
    Whether a recall occurs because the CPSC mandates it or 
because the company volunteers a fix, the risk posed to 
consumers is the same from an unsafe or defective product, and 
it ought to be remedied.
    While the mechanisms to initiate a voluntary or mandatory 
recall may be different--and they are, often---- neither 
process should mean that a company is absolved of 
accountability and from their corporate responsibility and 
trust to make things right. That is a very simple, 
straightforward, commonsense principle that animates and 
supports this proposed rule.
    And I look forward to your testimony.
    Thank you.
    Senator Moran. Thank you, Senator Blumenthal.
    We now recognize our first panel. And that panels consists 
of Mr. Elliot Kaye, Chairman of the Consumer Product Safety 
Commission, and Ms. Ann Marie Buerkle, a commissioner of the 
Consumer Product Safety Commission.
    Chairman Kaye, welcome. And please begin your testimony.

          STATEMENT OF HON. ELLIOT F. KAYE, CHAIRMAN, 
               CONSUMER PRODUCT SAFETY COMMISSION

    Mr. Kaye. Thank you. Good morning, Chairman Moran, Ranking 
Member Blumenthal, and the members of the Subcommittee. Thank 
you for the invitation to come speak about the United States 
Consumer Product Safety Commission's recall process. I am 
pleased to be joined today by my friend and colleague, 
Commissioner Ann Marie Buerkle.
    U.S. Government agencies with recall authority have 
struggled for decades with effectively reaching consumers about 
recalls. Our experience at the CPSC has mirrored that of our 
sister agencies.
    When I became Chairman last summer, I asked our staff to 
take a fresh look at how we and other agencies process and 
monitor recalls, with an eye on reaching more consumers and 
reaching them more quickly. My primary objective is a recall 
process that is even more focused on consumer protection.
    Toward that end, we are taking numerous steps to enhance 
the effectiveness of the recalls that we announce. These 
include: one, shortening the length of time it takes to alert 
the public to a product recall; two, working with individual 
recalling companies to ensure the monthly progress reports that 
they submit are accurate; three, identifying priority recalls 
so that the agency can provide enhanced monitoring of those 
critical recalls; and, four, urging recalling firms to use 
social media and search engine optimization to broaden the 
notice of recalls.
    We also continue to consider whether enhancing or changing 
our regulations could have a positive effect on this process. 
And I hope, as we go through that process, that there is room 
for us to exercise our independent, objective judgment and to 
reach different conclusions from others, potentially, and not 
feel like that process is an unfair one.
    As far as notifying consumers sooner, in Fiscal Year 2015, 
we announced recalls to consumers, on average, 4 to 5 days 
faster than we did in the previous fiscal year.
    In terms of broader dissemination, in addition to the 
hundreds of recalls that we have conducted in cooperation with 
Canada in the past 7 years, we have increased our coordination 
with safety agencies in other countries. Since 2013, we have 
conducted 7 trilateral recalls with both Canada and Mexico, 3 
of which were announced simultaneously in all 3 markets, 
including a recall last month of 1.3 million bicycles involving 
13 recalling manufacturers and distributors. Coordinated recall 
announcements increase efficiency and lead to less confusion 
for consumers.
    The improvements we are making to the process will still be 
insufficient, though, without a significantly increased effort 
by recalling companies. There is no way around that fact.
    As we all have experienced as consumers, companies spend a 
tremendous amount of effort and resources, including time, 
money, and creativity, on marketing their products to us. But 
at the CPSC, we often do not see a commensurate effort on the 
recall side.
    Parents of young children, of which I am one, in 
particular, are extremely busy. Many companies seem to embrace 
that fact when marketing their products and seem to ignore it 
when recalling those same products.
    I believe that companies should dedicate the same effort to 
recalling dangerous products as they do marketing them. In 
doing so, companies should use all of the tools at their 
disposal to inform and motivate consumers to take action. We 
have seen companies have successful recalls by offering 
incentives, such as gift cards for small amounts or free or 
discounted products, to motivate consumers to take advantage of 
the recall remedy.
    We have also seen some companies recall effectively using 
their social media platforms. Others, unfortunately, have used 
lesser-followed social media accounts to disseminate 
information or they bury the recall information under a 
difficult-to-find ``Recalls'' tab on a website.
    While such actions might check the box for publicizing 
recalls, they do not lead to effective ones, and they certainly 
do not strike me as a genuine attempt to protect consumers. I 
expect companies to ensure that recall information is featured 
prominently on their websites and social media sites instead of 
making consumers search for that information.
    Beyond a more prominent website placement, the use of 
social media needs to become more prevalent. For many 
companies, social media is an ideal medium to reach a large 
number of consumers simultaneously. Companies can use their 
social media sites to collect and monitor data regarding the 
reach of their recall message, and Facebook is a perfect 
example of this. It is the largest social media site today. 
Nearly all companies have a Facebook presence for marketing 
purposes, and they should be using this for recall purposes as 
well.
    Unfortunately, the CPSC itself does not yet have a Facebook 
presence. And I would think and hope that those who support 
government transparency, informing consumers, and genuine 
recall effectiveness would endorse CPSC going onto Facebook.
    We certainly welcome all feedback and ideas as we continue 
to enhance our recall effectiveness efforts. Thank you again 
for the invitation to speak to you about the CPSC's recall 
process and the lifesaving work undertaken by our staff. I look 
forward to answering any questions you may have.
    [The prepared statement of Mr. Kaye follows:]

         Prepared Statement of Hon. Elliot F. Kaye, Chairman, 
                U.S. Consumer Product Safety Commission
    Good morning Chairman Moran, Ranking Member Blumenthal and the 
members of the Subcommittee. Thank you for the invitation to come speak 
about the United States Consumer Product Safety Commission's recall 
process. I am pleased to be joined today by my friend and colleague, 
Commissioner Buerkle.
    U.S. Government agencies with recall authority have struggled for 
decades with effectively reaching consumers about recalls. Our 
experience at CPSC has mirrored that of our sister agencies. Expanding 
technologies simultaneously create new challenges in capturing 
consumers' attention and present new opportunities to do the same.
    When I became Chairman last summer, I asked our staff to take a 
fresh look at how we and other agencies process and monitor recalls 
with an eye on reaching more consumers and reaching them more quickly. 
My primary objective is to move to a recall process that is even more 
focused on consumer protection.
    Toward that end, we are taking numerous steps to enhance the 
effectiveness of the product safety recalls that we announce. These 
steps include: (1) shortening the length of time it takes to alert the 
public to a product recall; (2) working with individual recalling 
companies to ensure monthly progress reports provided to the Commission 
accurately reflect the steps taken by the recalling company and 
ensuring the accuracy of their data; (3) identifying priority recalls 
so that the agency can provide enhanced monitoring of those critical 
recalls; (4) improving technology so recalling companies can provide 
recall progress report information to the staff through a one-stop 
business portal; (5) expanding the use of social media by the CPSC to 
reach targeted audiences; and (6) urging recalling firms to use social 
media and search engine optimization to broaden the notice of safety 
recalls to reach as many owners of recalled products as possible. 
Beyond these steps, we continue to consider whether enhancing or 
changing our regulations could have a positive effect on this process.
    We have placed a priority on getting recall information to the 
public more quickly and more broadly, two elements critical to a more 
effective recall. In Fiscal Year 2015, we announced recalls to 
consumers, on average, 4-5 days faster than we did in the previous 
fiscal year. In addition to the hundreds of recalls that we have 
conducted in cooperation with Canada in the past seven years, we have 
increased our coordination with safety agencies in other countries. 
Since 2013, we have conducted seven trilateral recalls with both Canada 
and Mexico, three of which were announced simultaneously in all three 
markets, including a recall last month of 1.3 million bicycles 
involving 13 recalling manufacturers and distributors. Coordinated 
recall announcements increase efficiency and lead to less confusion for 
consumers.
    The improvements we are making to the process will still be 
insufficient without a significantly increased effort by recalling 
companies. There is no way around that fact. As we all have experienced 
as consumers, companies spend a tremendous amount of effort and 
resources, including time, money and creativity, on marketing their 
products to us. But, at CPSC we often do not see a commensurate effort 
on the recall side. Parents of young children, in particular, are 
extremely busy. Many companies seem to embrace that fact when marketing 
their products and seem to ignore it when recalling those same 
products. I believe that companies should dedicate the same effort to 
recalling dangerous products as they do marketing them.
    Companies should use all of the tools at their disposal, including 
customer lists, incentives and social media, to inform and motivate 
consumers to take action. Recalls are more effective when customers are 
directly notified and for many products, companies have the ability to 
do this through their existing customer records. We have seen companies 
have successful recalls by offering incentives, such as gift cards for 
small amounts or free or discounted products, to motivate consumers to 
take advantage of the recall remedy. These are some of the creative 
solutions that we believe companies can use to improve recall 
effectiveness.
    We have seen some recalling companies effectively use their social 
media platforms. Others, unfortunately, have used lesser-followed 
social media accounts to disseminate information or bury recall 
information under a difficult-to-find recalls tab on a website. While 
such actions might ``check the box'' for publicizing recalls, they do 
not lead to effective recalls; they certainly do not strike me as a 
genuine attempt to protect consumers. I expect companies to ensure that 
recall information is featured prominently on their websites and social 
media sites, instead of making consumers search for the information. As 
consumers, we can all easily recognize when looking at a company's 
website what is a priority and what is not.
    Beyond far more prominent website placement, the use of social 
media needs to become more prevalent. For many recalls, social media is 
the ideal medium to reach a large number of consumers simultaneously, 
especially when compared with some of our historic notification methods 
such as posters in retail locations. Through social media sites, 
companies can collect and monitor data regarding the reach of their 
recall message.
    Facebook is the largest social media site today, boasting nearly 
1.5 billion monthly active users as of this past summer. Nearly all 
major companies have an active presence on Facebook for marketing 
purposes, which should also be used to disseminate recall information 
more widely to consumers. Unfortunately, the CPSC itself does not yet 
have a Facebook presence. Those who support government transparency, 
informing consumers and genuine recall effectiveness should endorse 
CPSC going onto Facebook.
    I welcome feedback aimed at increasing recall effectiveness. 
Earlier this year, the non-profit advocacy group, Kids In Danger, 
issued a report that examined children's product recalls during the 
last ten years. I give credit to them for reporting on our 
effectiveness and encouraging others to focus on this important issue. 
Their work has better informed our processes and amplified our call 
that companies have a far greater role to play.
    Thank you, again, for the invitation to speak to you about the 
CPSC's recall process and the life-saving work undertaken by our staff. 
I look forward to answering any questions that you may have.

    Senator Moran. Mr. Chairman, thank you very much.
    Commissioner Buerkle?

  STATEMENT OF HON. ANN MARIE BUERKLE, COMMISSIONER, CONSUMER 
                   PRODUCT SAFETY COMMISSION

    Ms. Buerkle. Thank you, Mr. Chair.
    Chairman Moran, Ranking Member Blumenthal, and 
distinguished members of this committee, thank you for holding 
today's hearing on compliance activities at the Consumer 
Product Safety Commission.
    In my testimony before this subcommittee last June, I 
mentioned some concerns, and today's hearing gives me an 
opportunity to further explain them.
    The first concern I have is the proposed Voluntary Recall 
rule. The Consumer Product Safety Improvement Act of 2008 
required CPSC to issue guidelines for notices in mandatory 
recalls, which the Commission can order only after a trial-type 
hearing. The vast majority of CPSC recalls are not mandatory, 
but voluntary, and, of those, approximately 60 percent are 
Fast-Track recalls.
    The House committee said nothing about a regulation for 
voluntary recall notices. It merely said that it expected 
similar information would be provided in voluntary recalls. 
Remarkably, the CPSC majority produced a proposal that goes far 
beyond the concept of a voluntary recall. It also ignored the 
serious concerns expressed by the Office of Compliance.
    My concerns with the Voluntary Recall Rule, as it is 
proposed, are as follows: Number one, the proposed rule would 
require all corrective action plans, the voluntary plans 
submitted by the private party executing the recall, to be 
legally binding.
    This is a startling departure from the status quo. In 1978, 
the Commission intentionally decided that corrective action 
plans should not be legally binding. Without the legally 
binding provision, the Commission observed, and I quote, ``The 
hazard is remedied faster, and the consumer is protected 
earlier.''
    My second concern has to do with the Voluntary Recall Rule 
reversing another longstanding rule, which allows a recalling 
firm to state that submission of a voluntary corrective action 
plan does not constitute an admission that a substantial 
product hazard exists. Uncertainty on this point would 
discourage many companies from conducting voluntary recalls at 
the Consumer Product Safety Commission.
    Number three, the notice provisions of the proposed rule 
are not consistent with congressional intent.
    Number four, the proposal specifies certain cases in which 
recalling firms would have to include a plan for future 
compliance plans. Every company should have a plan for how they 
will meet their obligations under the law, but if we try to 
force that type of requirement into a voluntary recall plan, it 
will significantly delay the recall announcement and leave the 
consumer at risk for a longer time.
    Senators from both sides of the aisle have weighed in on 
this, and one of the most outspoken critics has been the former 
CPSC chair Ann Brown, a Democrat and consumer advocate. She 
recognized the disclaimer provision would destroy the key 
incentive to participate in the highly successful Fast Track 
Recall Program.
    We are now at the start of a new fiscal year, and it is 
time for resolution. My Democrat colleagues have had several 
opportunities to withdraw this proposal, but they have refused. 
And, in fact, they have moved in the wrong direction, voting to 
approve the CPSC's fall reg agenda with an expectation that the 
Voluntary Recall Rule will be finalized by September 2016. In 
the meantime, this proposal looms large over the regulated 
community.
    Adding to that uncertainty, it has been over a year since 
the CPSC changed the legal understandings of the successful 
Retailer Reporting Program, no longer assuring the reports meet 
their obligations and the information will be kept 
confidential.
    Adding further to the uncertainty is another 2013 proposal 
that relates to section 6(b) of the Consumer Product Safety 
Act, requiring our agency to take reasonable steps to ensure 
that public statements about specific products are fair and 
accurate.
    Add to this the Chairman's public statements that he wants 
the Office of General Counsel to seek higher civil penalties 
and that Compliance has been without a permanent leader for 5 
years, and the result is a regulated community that is 
alienated, beleaguered, and uncertain.
    The voluntary recall proposal must be withdrawn. CPSC can 
do a much better job. And the Chairman talked about it in his 
opening statement; we all believe in consumer safety. And I 
firmly believe we can do a far better job of protecting the 
consumer if we regain the trust of the regulated community and 
find ways to collaborate with them rather than to intimidate 
them.
    I thank you for this time and for holding this hearing, and 
I look forward to your questions.
    [The prepared statement of Ms. Buerkle follows:]

      Prepared Statement of Hon. Ann Marie Buerkle, Commissioner, 
                   Consumer Product Safety Commission
    Chairman Moran, Ranking Member Blumenthal, and distinguished 
Members of the Committee, thank you for holding today's hearing on 
compliance activities at the Consumer Product Safety Commission.
    In my testimony before this subcommittee last June, I mentioned my 
concern that the Commission seems to be turning its back on some of the 
highly successful compliance programs that depend on close 
collaboration with industry and moving instead towards a more 
adversarial posture. Today's hearing gives me an opportunity to further 
explain my concerns.
    Perhaps the most vexing example of the problem is the proposed 
``voluntary recall'' rule.\1\ The original idea behind that proposal 
was to establish guidelines for the information to be included in 
voluntary recall notices (mostly press releases that are negotiated 
between CPSC and firms conducting a voluntary recall). The Consumer 
Product Safety Improvement Act of 2008 (CPSIA) required CPSC to issue 
such guidelines for notices in mandatory recalls, which the Commission 
can order only after a trial-type hearing.\2\ The vast majority of CPSC 
recalls are not the mandatory type, but voluntary. Recognizing this, 
the report accompanying the House version of CPSIA, after discussing 
the requirement for mandatory recall notices, said ``the Committee 
expects that similar information will be provided, as applicable and to 
the greatest extent possible, in the notices issued in voluntary 
recalls.'' H.R. Rep. No. 110-501.
---------------------------------------------------------------------------
    \1\ Voluntary Remedial Actions and Guidelines for Voluntary Recall 
Notices, 78 Fed. Reg. 69793 (Nov. 21, 2013).
    \2\ See 15 U.S.C. Sec. 2064(i). CPSC issued the required notice 
regulation for mandatory recalls in 2010. Guidelines and Requirements 
for Mandatory Recall Notices, 75 Fed. Reg. 3355 (Jan. 21, 2010). The 
rule was codified at 16 C.F.R. part 1115, subpart C.
---------------------------------------------------------------------------
    The House Committee said nothing about a regulation for voluntary 
recall notices--it merely said that it expected similar information 
would be provided in voluntary recalls. Remarkably, while citing that 
modest expectation, the CPSC majority produced a proposal that goes far 
beyond the content of press releases and would, if adopted, 
fundamentally defeat the concept of a voluntary recall. It also ignored 
the serious concerns expressed by the Office of Compliance.
    My concerns are as follows:

  1.  The proposed rule would require all corrective action plans--the 
        voluntary plans submitted to the Commission by the private 
        party executing the recall--to be legally binding agreements. 
        For those who deal with CPSC on a regular basis, this is a 
        startling departure from the status quo. In the original 
        voluntary recall rule, which was adopted in 1978, the 
        Commission intentionally decided that corrective action plans 
        should not be legally binding.\3\ The Commission recognized 
        that in the vast majority of recalls, allowing voluntary 
        corrective action plans, subject to staff approval, would save 
        considerable time and effort that would otherwise have to be 
        spent in negotiating a legally binding consent order agreement. 
        Saving that time, the Commission observed, means that ``the 
        hazard is remedied faster, and the consumer is protected 
        earlier.'' \4\
---------------------------------------------------------------------------
    \3\ See 16 C.F.R. Sec. 1115.20(a). The regulation expressly 
reserves to the Commission ``the right to seek broader corrective 
action if it becomes aware of new facts or if the corrective action 
plan does not sufficiently protect the public.'' Id.
    \4\ Substantial Product Hazard Reports, 43 Fed. Reg. 34988, 34996 
(Aug. 7, 1978).

  2.  The proposed voluntary recall rule would also reverse another 
        longstanding rule of the Commission, which allows a recalling 
        firm to state explicitly that submission of a voluntary 
        corrective action plan does not constitute an admission that a 
        substantial product hazard exists.\5\ Under the proposed rule, 
        as amended by the Commission majority, a recalling firm could 
        no longer disclaim a defect unless the Commission staff agrees. 
        Given the enormous consequences a negative ruling could have 
        for product liability cases, uncertainty on this point would 
        discourage many companies from conducting voluntary recalls 
        with CPSC.
---------------------------------------------------------------------------
    \5\ 16 C.F.R. Sec. 1115.20(a)(1)(xiii).

  3.  The notice provisions of the proposed rule are not consistent 
        with Congressional intent as they require participants in a 
        voluntary recall to do much more than is required of firms who 
        are ordered to do an involuntary or mandatory recall after 
---------------------------------------------------------------------------
        unsuccessful litigation against the Commission.

  4.  The proposal specifies certain cases in which recalling firms 
        would have to include a plan for future compliance as part of 
        their immediate corrective action plan. While I think every 
        company should have a plan for how they will meet their 
        obligations under the law, my objection is that if we try to 
        force that type of requirement into a voluntary recall plan, 
        particularly one that would be legally binding, it will 
        significantly delay the recall announcement and leave consumers 
        at risk for a longer time.

    Opposition to the proposed voluntary recall rule did not come only 
from businesses. Senators from both sides of the aisle have weighed in 
against it. One of the most outspoken critics of the proposed rule has 
been former CPSC Chairman Ann Brown, a Democrat and leading consumer 
activist appointed to the Commission by Pres. Bill Clinton. She 
recognized that the proposed disclaimer provision would destroy the key 
incentive to participate in the CPSC's highly successful Fast Track 
recall program, which was instituted during her tenure as Chair. She 
added that a Fast Track procedure would be ``rendered impossible'' in 
any case if corrective action plans were required to be legally 
binding.
    Last July, the House of Representatives voted to defund any CPSC 
activity connected to the voluntary recall proposal. It was in the 
aftermath of that action that my colleague Mr. Kaye took over as 
Chairman of the agency. When asked about the controversial recall 
proposal and how he planned to handle it, he indicated in a number of 
public statements that he planned to focus on other activities that 
would have ``clear safety justifications.''
    I agreed with that position because the voluntary recall proposal, 
if finalized, would seriously undermine our Fast Track and voluntary 
recall programs and thus could not be justified on safety grounds. Now 
we are at the start of another Fiscal Year and it is time for 
resolution. My Democrat colleagues have had several opportunities to 
withdraw the proposal, but they have consistently refused. Most 
recently, they moved in the wrong direction, voting to approve the 
CPSC's fall Regulatory Agenda with an expectation that the voluntary 
recall rule would be finalized by September 2016.
    In the meantime, the proposal continues to loom large over the 
regulated community. There are a number of other actions or inactions 
that compound the uncertainty. More than a year ago, CPSC abruptly 
changed the legal understandings on which the successful Retailer 
Reporting program has operated for more than ten years. After the 
participants strenuously objected, the staff backtracked and undertook 
a more thorough review of the program. At the staff's request, most of 
the participants have continued to provide the same type of reports to 
the Commission. But without the former assurances that the reports will 
satisfy statutory reporting obligations and the information will be 
kept confidential, the uncertainty has grown intolerable and at least 
one major retailer has given up on the program.
    Adding further to the uncertainty is another 2013 proposal that 
relates to section 6(b) of the Consumer Product Safety Act, 15 U.S.C. 
Sec. 2055(b). The statute generally requires CPSC to take reasonable 
steps to ensure that public statements about specific products are fair 
and accurate. The proposed rule would weaken the protections of the 
current CPSC regulation and deviate from the intent of Congress.
    Add to this the Chairman's frequent public statements that he wants 
the Office of General Counsel to seek higher civil penalties for 
reporting violations, as well as the fact that the Office of Compliance 
has been without a permanent leader for five years now, and the result 
is a regulated community that is feeling alienated, beleaguered and 
uncertain.
    The CPSC can do a better job of protecting consumers if we regain 
the trust of the regulated community and find ways to collaborate with 
them rather than intimidate them. To that end, the voluntary recall 
proposal must be withdrawn. We have accomplished the original 
objectives of the Congress. There is no need to disturb or disrupt the 
current, successful recall process.

    Senator Moran. Commissioner, thank you very much.
    Chairman Kaye, let me start with you. It does seem that in 
the past you indicated that safety issues were your greatest 
priority and discounted the idea of moving forward with this 
topic, this rule.
    Let me ask you, is this--and yet, in the Fiscal Year 2016 
regulatory agenda, this rule remains. Is it the intention of 
the Commission to move forward on this rule?
    Mr. Kaye. Thank you, Mr. Chairman.
    Yes, it is accurate that I have said that. I have been very 
clear about that. My colleague sitting to my left knows that I 
have said that, and it is true.
    Every day, at the end of the day, I get daily death 
reports. I look through them and they are about 2-year-olds who 
drown, 35-year-olds who are poisoned to death from carbon 
monoxide from a portable generator, or a 50-year-old who has an 
ATV crush them.
    This is what I see every night before I go home. And when I 
became Chairman, it is addressing those types of hazards that I 
have definitely made the top priority. I have been very clear 
about that, and I think the direction of the agency has 
reflected that.
    Before I became Chairman--and as I explain this, I am not 
in any way excusing what has gone on. But the rules to which 
the Commissioner has referred, the 6(b) rule and the voluntary 
notice recall rule, were already on our books. We had already 
put out the NPRs, the notice of proposed rulemaking, for both 
of those. And so, as a matter of course, our staff puts them in 
the proposed operating budgets and the proposed performance 
budget requests that the Commission moves forward with every 
year.
    As we always do and as we just experienced at the end of 
the last fiscal year a few weeks ago, work that we hoped to 
have gotten done during that year's operating plan, because of 
extenuating circumstances, doesn't all get done. And so those 
rules get carried over that haven't been finished.
    To have taken them off the books, so to speak, to have 
voted affirmatively to have ended them, to me, would have been 
inefficient. There already is an open rulemaking. I think that 
that rulemaking, should we turn to it, gives us an opportunity, 
in any direction, to explore how we can enhance our recall 
effectiveness process.
    Everybody seems to want us and industry to have a more 
effective recall process. I think that that rulemaking can take 
many different forms and should be a potential vehicle to do 
that. I am not necessarily wedded to any particular provision 
in there. I am more wedded to trying to find, as I mentioned in 
my opening testimony, a process that is even more focused on 
consumer protection.
    So I will continue to devote my time to those primary 
hazards that I mentioned at the beginning of this answer, but 
if we can also work in time, working with our colleagues --no 
surprises here--working with our colleagues to try to enhance 
that process through both voluntary efforts, guidance, and 
potential rulemaking, I am certainly going to continue to want 
to have all those options available.
    Senator Moran. So, Mr. Chairman, what would you expect to 
happen next in regard to this rule?
    And then I will ask Commissioner Buerkle to respond to what 
you said. But what you are suggesting, to me, is that this 
rule, the process began before you arrived as Chairman. It is 
something that is on the agenda, in a sense, through the 
process that the Commission normally follows. It is not where 
the Commission is focusing its attention at the moment. But you 
are uninterested in withdrawing the rule in case the attention 
should be or, in the Commission's view, becomes important to be 
considered at some point in time.
    Is that what I heard you say?
    Mr. Kaye. That was 100 percent accurate. Thank you.
    Senator Moran. Thank you. Perhaps I can listen better than 
I can speak.
    [Laughter.]
    Senator Moran. Then let me ask you, if you are not going to 
withdraw the rule, for a couple of commitments from you. And 
one would be that you will keep this subcommittee, the Commerce 
Committee, fully informed of your intentions in advance of 
any--let me say it this way. Before you change your intentions 
in regard to this rule, would you agree to notify us and let us 
know what those plans are?
    Mr. Kaye. Absolutely, if you will take my calls.
    Senator Moran. Yes, sir.
    Mr. Kaye. OK.
    Senator Moran. And, second, would you agree that there 
would be value in engaging in what I would call the CPSC 
community, consumer advocates, the business community, to have 
discussions about this topic before you engage in pursuing that 
rulemaking?
    Mr. Kaye. Well, we are certainly not going to spring 
anything on anybody, if that is what you are concerned about. 
Sometimes whether we like it or not, we do have those 
conversations, and those dialogues happen all the time. And it 
is an ongoing topic, and that is why we are having a hearing 
today.
    And so I am not a believer in big surprises. We will 
continue to be very transparent. I think we have, not only 
because of our formal meetings policy but also informally, how 
we have conducted ourselves with the current commission, I 
think we have an incredible amount of openness and 
transparency. And that will continue on this and other issues.
    Can I just say quickly, one thing that is really important 
is I am not wedded to this particular rule. I am not wedded to 
a specific legal or voluntary approach. I am wedded to a goal, 
the goal of improving the recall process. And if it turns out 
that some form of this rule, in any direction, is a valuable 
piece of that, then I am going to pursue that. And of course we 
are going to be open about that.
    Senator Moran. I appreciate your answer. But I would add 
that, in addition to the transparency that you committed to, 
part of that is, you indicated, not wanting to spring something 
on someone. In addition to that, my request for a commitment is 
that you will seek input in this rule from consumer advocates 
and the business community that care about the outcome of that 
decision.
    Mr. Kaye. Yes. And, certainly, if we end up deviating 
substantially from--if we end up even doing another version of 
a rule and we deviate substantially from the Notice of Proposed 
Rulemaking, I would expect we would have to do another Notice 
of Proposed Rulemaking. And that will of course involve notice 
and comment.
    Senator Moran. Thank you, Mr. Chairman.
    My time has expired. I will give Commissioner Buerkle a 
chance to respond in my next opportunity to ask questions.
    Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman.
    Let me ask Commissioner Buerkle, I know you said that there 
is no need to disrupt the current successful recall process. 
How can a 10 percent recall effectiveness rate be considered 
successful?
    Ms. Buerkle. Thank you, Senator Blumenthal.
    I think that when we look at recall effectiveness, it is 
very important--and in your opening comment, you mentioned the 
car issue, the automobile issues. The recalls we do at CPSC, on 
many occasions, don't compare to other government agency 
recalls. A lot of the consumer products we deal with are 
smaller, less expensive, and, in many cases, if someone is 
aware of the recall, they just disregard and they throw the 
product out.
    There are a whole lot of issues that we deal with in recall 
effectiveness in trying to measure it. And I would say that 
looking at that percentage and using what was in the report----
    Senator Blumenthal. Well, let me just say, though--and I 
apologize for interrupting, but my time is limited--that the 
number that I have given you, 10 percent, pertains to products 
whether they are fixed or destroyed. And the rate that applies 
to children's products is even lower, 3.96 percent.
    So can we really say the process is working now?
    Ms. Buerkle. I would say the best measurement of recall 
effectiveness is looking at the injury and the death rate post-
recall-notice. That is the most accurate number that we have in 
terms of whether a recall is effective. And that number, in 
speaking with Compliance, because they are the ones who measure 
these statistics, that number is down, and post-recall we don't 
see the injuries and deaths.
    And that is because there are so many other factors getting 
to the 10 percent. For instance, if I had a fitness tracker and 
there was a recall for rashes and I didn't get the rash, I am 
not going to return my product. So it is subjective, on some 
levels, recalls are. It depends on the value. It depends on the 
age of the product.
    Compliance tells me that right now we depend on our recall 
information coming from the recalling company who is doing the 
recall and that the information they give to us is paper, so 
there is a data integrity issue.
    So just to use that figure, I think a more relevant and 
certainly more important one is that post-recall-notice injury 
and death rate.
    Senator Blumenthal. Well, I would like to see numbers.
    Ms. Buerkle. We will be happy to provide those to you.
    Senator Blumenthal. And then I would like to see a 
justification for the continuing risk that those numbers may 
well reflect, risks that continue even after consumers are 
warned.
    Let me ask you, Chairman Kaye, about the Retailer Reporting 
Program that was designed through the CPSC to collect data from 
incident reports on both injuries and deaths in order to better 
identify these kinds of emerging hazards.
    Initially, this program emphasized the use of corrective 
actions over civil penalties. Under the program, as you know, 
to meet reporting requirements, participating retailers have to 
submit complaint and incident data to the CPSC every week, 
which seems like a constant influx of information.
    In order to be useful for the Commission to use it in 
spotting potential hazards, the data submitted by retailers, I 
think, would need to be formatted in a way that is readable and 
searchable for the Commission and for the public.
    Is this data provided now in a standardized format? And, in 
your view, has the program really provided value to the 
Commission?
    Mr. Kaye. Thank you, Senator.
    I am glad you raised the Retailer Reporting Program. And it 
is a bit of a misnomer to even call it a program. It was an ad 
hoc arrangement with seven different retailers that evolved 
over time separately with those seven different retailers, or 
not even only retailers but other companies. As you mentioned, 
really more of a compliance effort.
    I thought it was a creative approach at the time; certainly 
something that I have looked at since I have become Chairman.
    I would say that, from my perspective of discussing this 
with our epidemiologists--and I think that is important, for us 
to focus on those experts who actually understand data and data 
analytics and the value of certain data and the comparative 
value of it--it is viewed as a useful data source but in the 
lower tier of data sources that we receive and rely upon to try 
to protect the public.
    Since it has some value, both to the epidemiologists and to 
our compliance staff, we try to figure out how we can go 
forward in a way that does exactly what you mentioned, Senator, 
have the information provided to us in an accessible and usable 
format, standardized format, and open that up potentially--this 
is the direction I am intrigued by moving in--open that up to 
the larger regulated community so that they can file all of 
this information electronically and we can then feed that into 
our data pools and try to use that to mine that data to better 
predict where we see trends.
    I think that the biggest stumbling block, if this is the 
direction that we move in, the biggest stumbling block, 
frankly, is resources. It is extremely expensive to both build, 
operate, and maintain that type of data warehouse. And before 
we come asking for money to do that or try to shift priorities 
to at least get it off the ground, I want to make sure that 
there is actually a return on investment that we feel like is 
worth it.
    Senator Blumenthal. Thank you.
    My time has expired. And thank you, Mr. Chairman.
    Senator Moran. Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Mr. Chairman.
    And thank you to both of our witnesses. I have worked hard 
on consumer issues for quite a while, and I appreciate the work 
both of you are doing.
    I know that in 2008 this committee worked on the Consumer 
Product Safety Improvement Act to strengthen and empower the 
CPSC. This bill had bipartisan support and made a difference in 
protecting the public, and I hope we continue in that vein.
    I thought I would just ask briefly some questions, just 
what you have been touching on with our recalls.
    Commissioner Kaye, I know that the CPSC has taken the lead 
on improving some of the recall processes for the Federal 
agencies, including the website recall.gov. However, the 
reality is not all consumers are aware of recalls; they don't 
really know where to look for them.
    And what can be done to improve the way that recalls are 
publicized?
    Mr. Kaye. Thank you, Senator.
    And if I may digress for a minute, I want to congratulate 
you for your winning the National Consumers League award 
earlier this week, which was a recognition, a much deserved 
recognition, for all that you have done for consumers. And 
since I am in my official capacity here, I don't think our 
ethics lawyers can prohibit me from saying something to you 
about that.
    [Laughter.]
    Mr. Kaye. We have worked really hard to try to figure out--
--
    Senator Klobuchar. It would be sad to get an ethics 
violation for talking about a consumer award----
    Mr. Kaye. It would.
    Senator Klobuchar.--so that is good. All right.
    Mr. Kaye. During official testimony that I had so eagerly 
and excitedly showed up for.
    It has been really challenging to try to figure out ways to 
better reach consumers. And as I mentioned in my opening 
testimony, this has been a decades-long problem. And I remember 
even hearing from folks at NHTSA that they, even with 
automobiles, have a hard time getting close to 80 percent with 
a car with a serious problem. And so, as my colleague 
mentioned, it is even more difficult when you talk about 
products that might be relatively disposable, have low value.
    What we have found is that the more that companies can 
engage consumers directly, the more that they offer incentives, 
the more outreach that they do, the higher the value of the 
product, the more consumers are likely to act.
    And I am serious about what I mentioned in my opening 
statement. It is frustrating to see companies tripping over 
themselves to get the attention of parents, in particular, of 
these products from a marketing perspective.
    The basic assumption that they do when they are marketing 
it is, we really have to work hard to compete to get these 
parents to pay attention to our product, so we are going to 
spend all the time and the money and come up with very creative 
advertising to get them to focus on our materials.
    But as soon as they make those sales, if those products are 
recalled, they take the opposite assumption. They assume 
putting it on some lower-tier social media account, if they 
even do that, is good enough to reach those same parents that a 
few months ago they believed were very distracted.
    Senator Klobuchar. OK.
    Mr. Kaye. And so we are really looking for a greater 
commitment from industry, just match what you do on the 
marketing side. And we think that would make a tremendous 
difference.
    Senator Klobuchar. Good point.
    Commissioner Kaye and Commissioner Buerkle--you have 
mentioned cars, Commissioner Kaye. The auto industry, as you 
know, recalled a record 64 million vehicles in 2014. Defective 
ignition switch with GM. We had the Takata airbag. We have had 
hearings here. We have now the ongoing Volkswagen issue, an 
unbelievable story which we won't get into right now.
    But what do you think that NHTSA and the EPA can learn from 
CPSC's recall process? And what do you think the best practices 
are for this upcoming recall notification with Volkswagen?
    Mr. Kaye. Again, reaching out to consumers directly, using 
creative social media approaches. And trying to put the best 
and the brightest within the companies and the PR firms and 
human-factors experts to try to reach and understand how to 
reach people, how to really work to capture their attention, I 
think, is one of the better lessons that I have picked up along 
the way.
    Senator Klobuchar. All right. Thank you.
    Commissioner Buerkle?
    Ms. Buerkle. Well, I would say that, yes, social media. 
Things have changed with the development of social media. But 
the American people are bombarded daily, 24/7, with 
information, and I think on some levels, at least for CPSC, 
there may be a recall fatigue issue that we really need to 
address. What the Chairman said about understanding human 
behavior, what they listen to, what gets their attention, those 
kinds of factors must be considered.
    But it is not just an issue of social media; it is looking 
at the product, it is looking at the consumer and understanding 
where they are going to get their information most efficiently 
and most effectively.
    Senator Klobuchar. Very good.
    And just to one issue I am not going to ask but I will 
probably just do it in writing, detergent pods. Maybe in 
writing you could give me a progress report on that. I know 
that the industry has come together with some changes, which is 
truly a good thing. And Senator Durbin and I and others have 
been involved in this for a while, and that is positive.
    The second issue is pool safety. It has been in the news a 
little. I won't discuss how it may be in the context of the 
Presidential campaign.
    But the Virginia Graeme Baker Pool and Spa Safety Act, as 
you know, was something that I worked really hard on. It was 
named after Secretary of State Baker's granddaughter, who 
tragically died in a swimming pool. And we had another girl in 
Minnesota where the same thing happened.
    And, Chairman Kaye, could you talk about any updates we 
have on numbers? Because, from my perspective, we have seen a 
major decrease with only a little bit of work in terms of some 
drains, and the CPSC has done a great job of education.
    And you might want to make it quick, so we can get to my 
colleagues here.
    Mr. Kaye. The Act has been a tremendous success. That is 
the bottom line. The numbers have dropped. I believe we are 
still at zero deaths since the Act was passed.
    Senator Klobuchar. What an unbelievable story.
    So thank you all for your work. It should make you feel 
good about what you do. And, every so often, we do a few good 
things here. So thank you very much.
    Senator Moran. Thank you, Senator Klobuchar.
    Senator Daines?

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. That is a tough question to follow, Senator 
Klobuchar.
    Thank you, Mr. Chairman, for holding this hearing.
    Last time that you both testified, this committee had just 
passed the RIDE Act, which postponed the CPSC's controversial 
rulemaking for recreational off-highway vehicles.
    In my home state of Montana, off-highway vehicle 
recreation, including ATVs and recreational off-highway 
vehicles, has an economic impact of nearly $400 million. These 
vehicles are essential for Montana ranchers, for farmers, for 
sportsmen to specifically travel off-highway.
    ROVs are not meant to be operated on streets and highways 
and should not be regulated as such. Montana continues to see 
residents transition, and we are seeing it all the time, from 
ATVs and 4x4s to ROVs. So I am encouraged to hear that the CPSC 
and industry are working together to develop voluntary 
standards so that, hopefully, legislation won't be necessary.
    Chairman Kaye, I am encouraged by reports the CPSC is 
working collaboratively on developing these voluntary standards 
that would mitigate negative impacts to the economy while still 
protecting consumers. What is the status of this ROV written 
negotiations between industry and the agency? And what do you 
see as the likely outcome?
    And a follow-up on that would be, do you intend on 
terminating the mandatory rulemaking process?
    Mr. Kaye. Thank you, Senator. I am pleased to continue the 
dialogue that we have had in the past on this important issue.
    You are correct, the trend has been very positive. And 
considering where both Commissioner Buerkle and I entered this 
about a year-plus ago--for Commissioner Buerkle, 2 years for 
me; in the last year in this position--the tone has changed 
tremendously for the positive. The negotiations, even 
including--I believe it was this past Monday there was a long 
meeting, which all reports were extremely productive.
    I think we are close. Or they are close, I should say, 
because we stay out of it. My hope is that they will see it 
through.
    I think what is critical--and you mentioned the RIDE Act--
is that those technical issues that the RIDE Act would have us 
study through the National Academy of Sciences have been worked 
out, as far as I understand it, and they are really just down 
to some final number choices to figure out where along the risk 
spectrum everyone can agree which vehicles pose a reasonable 
risk and which ones pose an unreasonable risk.
    And the reason I mention the RIDE Act is, my hope is that 
if there is an agreement reached--and this is critical--if 
there is a voluntary standard agreement reached, it is very 
important that that rider or any type of rider that would force 
the Commission to spend money studying those technological 
issues doesn't go through, because it would be a waste. The 
issues will have already been resolved, and it will require the 
agency to spend money unnecessarily. And it really will delay 
us seeing through the final aspects of this voluntary standard.
    If there is an agreement reached and our staff believes 
that it adequately addresses the hazards and it will be 
substantially complied with, then they would send up a package 
for the Commission to vote, along the lines of what you are 
talking about, to terminate the rulemaking.
    Senator Daines. Right. Thank you.
    Commissioner Buerkle, you have been involved in that 
process too. What is your perspective?
    Ms. Buerkle. Thank you, Senator.
    Well, I am optimistic, as well. I attended, I have attended 
all of the meetings, in particular Monday's meeting, and I am 
optimistic that--really, I must commend both sides for working 
as diligently as they did.
    But I really do feel that the legislation should stay in 
place until the mandatory standard in the rule is removed. 
Because there needs to be clarity, and I think that is the 
clarity. When that mandatory rule is taken off the books, then 
the RIDE Act can go away.
    I think the agency learned a lot from this experience. And 
I really do want to encourage us; we should be engaging with 
the regulated community prior to proposed rules, because a lot 
of time was wasted trying to get to--as the Chairman mentioned, 
we started out so far apart. And if we could have that dialogue 
before a proposed rule comes out, I think we begin at a closer 
place and we certainly can shorten that time for----
    Senator Daines. Yes. And I applaud the collaborative effort 
that has been going on.
    Ms. Buerkle. And the other effort, I think, is the agency, 
we learned a lot from the industry. They came up with a testing 
method for vehicle stability that has profited everybody in 
terms of the knowledge and the information, and our staff was 
so pleased to get that information. That is collaborative 
effort, that is working together, and we need to be open to 
that kind of effort.
    Senator Daines. And to build on that, speaking of 
collaboration, I know the U.S. military has purchased a large 
quantity of ROVs for military use in Afghanistan as well as 
around the world.
    Given the military's extensive use of these vehicles in the 
most extreme conditions, has the CPSC asked the military about 
its experience with the safety of the vehicle or its views on 
design or performance?
    Mr. Kaye. Yes, Senator, we have engaged the military. And 
since any ROVs that the military would specifically purchase 
for military use would not be subject either to the voluntary 
standard or the mandatory standard because they are not 
consumer products, I don't have a concern that we would 
unintentionally create an issue for the military.
    Senator Daines. All right. Thank you. I am out of time.
    Senator Moran. Senator Daines, thank you.
    We are now joined by the Ranking Member of the Full 
Committee, Senator Nelson.
    Welcome. If it fits your schedule and you are prepared, you 
are welcome to question our witnesses or make a statement.
    Senator Nelson. Do you have any more questions?
    Senator Moran. We are going to have another round, and it 
appears that you and I are--you have the first round and I have 
the second round.
    Senator Nelson. You go ahead.
    Senator Moran. All right. Very good.
    Let me then turn to Commissioner Buerkle.
    You heard the Chairman indicate about the Voluntary Recall 
Rule, the intentions, which as I have tried to restate and I 
think the Chairman agreed with the way I restated it, which is 
they are going to be included in the 2016 plan, but no 
intention now or the foreseeable future to pursue that rule.
    Your reaction to the Chairman's statements?
    Ms. Buerkle. Thank you, Senator.
    In my opening comments, I talked about uncertainty. And 
this rulemaking looming, it looms large over the regulated 
community. And when I hear the Chairman say ``should we turn to 
it,'' that creates a lot of questions in the regulated 
community's mind.
    The second piece about this voluntary recall, the proposed 
rule, is that it is toxic. As soon as you mention it, the 
regulated community, everyone, just sort of groans because of 
the concern and all of the negative comments we received about 
it.
    And I have talked to the Chairman, and I will continue to 
do that. I think the best way to proceed is to get it off the 
books, have that dialogue you have asked us to have with all of 
the stakeholders, and then proceed in an orderly manner.
    But if I could very honest about this, I think we have 
complied with the statute. We have the mandatory rule in place. 
We have guidelines in our recall handbook for voluntary recall 
notices. I think we have complied. If we need to modernize this 
rule because there are components of social media that may 
enhance our voluntary recall notices, so be it, but I don't 
think that that would necessitate any rulemaking. We could 
perhaps do that in our handbook, or we could modernize the 
mandatory rule. There are a lot of options here.
    But in all of what we do, the best way we are going to 
achieve safety for the consumer is to have good relationships. 
And I think this would be a really good-faith effort on behalf 
of the agency that we withdraw this rule and we start again and 
we discuss what do we need to enhance, as Senator Blumenthal 
mentioned, our recall effectiveness. Will social media help 
that? If so, how can we do that?
    But to continue on with this very--I call it toxic because, 
the Chairman knows, it makes everyone cringe as soon as you 
mention it. And there is a lot of pressure from within the 
agency, from other commissioners; they want to proceed with 
this. So it puts the Chairman in a difficult spot.
    So I think for the sake of everyone and for clarity for the 
regulated community, if we take it off our books, if we start 
again, if we have that discussion and we determine what we 
really need to perhaps enhance recall effectiveness, that would 
be a more prudent way to proceed.
    Senator Moran. Mr. Chairman, is there anything you can do 
today to eliminate uncertainty and provide clarity?
    Mr. Kaye. Thank you, Mr. Chairman. I am honored you think 
that I even sit in a position that has that capability.
    [Laughter.]
    Mr. Kaye. I would disagree slightly with my colleague, who 
I really do have a wonderful relationship with. That is not lip 
service. Every week, we sit down and talk individually, and 
even though we disagree on many issues that we talk about, we 
do get along very well personally, and I really value her 
input.
    I don't have the same experience with the regulated 
community, and I also don't think you can call the regulated 
community one entity. For me, there are two different 
conversations that I have with industry whose products that we 
do or could regulate.
    When I get outside of Washington, which I do often and try 
to do within the means of our budget, and I sit down with 
companies and I talk to them on their home turf, in their 
factories, about what is concerning them, this rule never comes 
up, ever. And then I raise it, and they give me a blank stare. 
They don't know what I am talking about.
    I believe that this rule and the toxicity, the churning 
that is associated with it, is not an accurate reflection of 
what is actually going on in corporate boardrooms and in 
company headquarters outside of Washington. I think that it is 
the product of a smaller group that pays closer attention to us 
that sees value in highlighting controversial aspects of it.
    And I think it is important for us to make sure that when 
we talk about the regulated community and talk with the 
regulated community, that we are hearing from those who are 
actually affected by what we might do, not those who purport to 
represent those companies.
    Senator Moran. How do you consider what former Chairwoman 
Brown said in her letter, particularly as it relates to the 
Fast Track Product Recall Program? What is the consequence of 
this rule, potential rule, to Fast Track?
    Mr. Kaye. Well, this is probably not something witnesses 
normally like to do, but I admit I don't understand her 
concerns. She is by far the standard against which any chairman 
should measure him or herself. She is a legend at the agency, 
and I very much value what she has done and her opinion. But I 
have had a hard time reconciling her concerns, as were 
expressed in her letter, with the rule itself. I am just not 
seeing it. And I have asked folks who are far smarter than I 
am, and I just haven't been able to pick up on what the 
concerns are.
    Senator Moran. So you don't see the potential rule as a 
problem related to Fast Track?
    Mr. Kaye. I don't. I don't understand why it would be. If 
Fast Track, as far as I understand it, is a prepackaged 
agreement, and if companies, whatever the requirements are of 
Fast Track, if companies still want to go down that route, 
whether it is legally binding, not legally binding, whatever it 
ends up being, if they agree to pursue that route and they want 
to go Fast Track, then they are still going to do it.
    As far as I understand it. But, again, I might be missing 
something when it comes--she probably has, as the creator of 
that program, a far better understanding and a more nuanced 
understanding of how she sees that program.
    Senator Moran. Commissioner Buerkle?
    Ms. Buerkle. Mr. Chairman, the Fast Track Recall Program 
allows a company to come to us and say, I think this may be a 
problem, I think perhaps it should be considered being 
recalled. Our staff does not make a preliminary determination 
that there is a substantial product hazard. So they don't go 
through that analysis, and the product is recalled. That is the 
kind of behavior we want to encourage.
    But if you put compliance plan, you put legally binding, 
and you add all of these factors into that, that slows that 
process way down. And this is someone who is coming to us 
voluntarily saying: I think, I am not even sure, I think this 
may, you know, create a hazard. Our staff with the Fast Track 
doesn't make the preliminary determination, but we get that 
product out, we err on the side of caution.
    We are telling manufacturers, we are telling retailers: 
when in doubt, report. We want to encourage that behavior. And 
if we add all of these bells and whistles to this, we are going 
to slow down and impede the Fast Track Program.
    Senator Moran. Let me get to two other topics quickly.
    First of all, let me explore something that, Commissioner 
Buerkle, you and Senator Blumenthal, the conversation you had. 
I am interested in the answer about the 10 percent, what that 
includes and what it doesn't include. But I want to know if you 
have access to the data that you described as being the best 
criteria to determine success or failure of a recall, death or 
injury post-recall.
    So does the Commission have that data available? That is a 
standard that could be determined?
    Ms. Buerkle. Yes. The commission does receive that data.
    Part of our problem, as I mentioned earlier, is so much of 
the recall information we get comes through a secondary party, 
through the recalling firm. That is an issue we have. 
Oftentimes, it will come later on in another form.
    But when a corrective action plan is put into place, and 
they are part of the reports that they are requested to submit 
on a regular basis, that will have any followup injury data or 
death information.
    But we do track those numbers the best we can given all the 
limitations and the issues with data integrity. But we do track 
those. And from what I understand from Compliance, those 
numbers are good, post-recall, the rates of injuries and 
deaths.
    Senator Moran. Thank you very much.
    Let me turn to the Ranking Member, Senator Nelson. And I 
just have a couple more questions after Senator Nelson.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    If I may submit for the record an opening statement?
    Senator Moran. Without objection.
    [The prepared statement of Senator Nelson follows:]

   Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
    Thank you, Chairman Moran and Ranking Member Blumenthal, for taking 
a look at an issue that should cause alarm for all American families--
and that is our terrible track record for notifying and remedying 
recalled consumer products.
    It's been seven years since we passed the Consumer Product Safety 
Improvement Act, and that law has greatly contributed to public safety.
    However, the completion rates for recalls remain stubbornly--and 
alarmingly--low. Too many dangerous products remain in consumers' 
homes.
    Parents expect to be notified promptly and clearly if it turns out 
that a toy they bought for their children could actually maim or kill 
them.
    And parents expect to be told how and when they can get that 
defective toy fixed or replaced.
    But, as we all know, that's not happening.
    The recall completion rates for consumer products--including 
children's products--are so low it's just sad.
    According to one of the consumer groups that will appear before the 
Committee today, Kids in Danger, the recall effectiveness rate in 2012 
for children's products was terrible--with only about 4 percent of 
those products reported as being either corrected or destroyed.
    That makes the recall rates for the defective Takata airbags and 
the General Motors defective ignition switches look great by 
comparison.
    And, let me tell you: Neither Takata nor GM has any reason to be 
proud of their track records when it comes to recalls.
    So, why are recalls for consumer products so ineffective?
    The answer seems obvious to me: Because companies are under no 
legal obligation whatsoever to notify effectively and to actually carry 
out the recall.
    Yes, a company may do the right thing by letting CPSC know about an 
unsafe or defective product and by coming up with a voluntary recall--
known as a ``Corrective Action Plan''--to get the product out of 
consumers' homes. But what good is that if the company doesn't follow 
through and take the steps it promised to take?
    An unsafe product doesn't magically become safer if a company's 
recall is voluntary instead of mandatory, so why should a company be 
able to pretend that's the case?
    That's why I urge both the Commission and industry to do better.
    We must figure out a more effective way to get these products out 
of the hands of consumers--out of the hands of children.
    We all know that the current system is not working.
    We must do better.
    And doing better can't simply be the status quo, which too often 
seems to be a completely voluntary process that just doesn't get the 
job done.
    Thank you, Mr. Chairman.

    Senator Nelson. Thank you for the opportunity, Mr. 
Chairman.
    This is a little commission that I appreciate so much, 
because you are the one group that is standing between 
defective products and the consuming public. And I want to give 
you two examples that, unfortunately, I had been personally 
involved in.
    The first is, after our state was pretty well covered up by 
a number of hurricanes in 2004 and 2005, there was a lot of 
building that occurred to repair the damaged structures, and 
there was such a demand on building materials that wallboard 
started coming in from China that was not only defective but it 
was so filled with sulphuric gas that it was not only hazardous 
to the health of people that were living in the houses but it 
would turn all of the metal objects, including the silverware, 
brown in the entire house. This is how bad it was. Now, not the 
least of which, you could tell it when you walked in the house 
because it smelled like rotten eggs.
    I had to get involved, because we had a lot of people in 
Florida that were affected by this. And, lo and behold, these 
people had turned to their insurance company, and the insurance 
company said, ``We don't know you.'' They had turned to their 
bank to try to work with them, because in many cases their 
pediatricians were telling them, ``Get the children out of the 
house,'' and they would have to go and rent someplace. And 
often what had happened is they had turned to the builder of 
the house, and the builder had gone bankrupt or they had moved 
on.
    And so these folks, they didn't know where to turn. And so 
your handy-dandy Senator from Florida actually went to China, 
and, of course, I got the actual brush-off.
    That is where your agency comes in, because we got you to 
start doing tests and so forth. And the long and short of it is 
that the only financially responsible party was, in some case, 
the insurance companies of the distributors.
    I even met the Chinese president in a diplomatic reception, 
and of course didn't expect that he knew anything about it, but 
confronted him with the issue and outlined what is happening.
    The government of China has kept hands off. The government 
of China often is an investor, if not the owner, of these 
companies that were mining it. They traced it to a particular 
mine where this wallboard was using that material.
    Now, that is one very bad example for the American 
consuming public, and there were a lot of people that were 
harmed. And only years later are they getting part compensation 
because of the lawsuits that occurred.
    I will give you another one. The origin of this one is also 
China. We had a number of children that were harmed and choked 
to death because of defective Chinese toys.
    It is your organization that stands in the way of these 
defective products and the public being harmed. What are you 
doing to make sure, Mr. Chairman, that the Chinese 
manufacturers and distributors stand by their products and 
actually carry through with the recall of the toys and the 
recall of the wallboard?
    Mr. Kaye. Thank you, Senator. And, of course, thank you for 
your years and years of leadership in terms of revitalizing 
this commission and giving us some of the tools that we have 
needed to do exactly that.
    The first step in this process is to stop products at the 
ports before they ever get into hands of consumers. And thanks 
to Congress's direction in section 222 of the Consumer Product 
Safety Improvement Act, we did create a pilot program to begin 
better targeting at the ports.
    We cannot get that to a national scale, though, without 
more funds from Congress, both in the form of a direct 
appropriation as a bridge and, ultimately, we think, consistent 
with other agencies' border authorities, a user fee that is 
reasonably pegged to be able to give us the resources to turn 
that pilot into a national-scope, data-driven enforcement tool. 
So that is critical on the front end.
    On the back end, we actually have, over the past few years, 
developed a far better relationship with the Chinese 
government. It is a bit counterintuitive in light of what you 
said, where there is at least a belief of a financial incentive 
with the government in some of these companies. In many of 
those areas, that has not prevented them, as far as we can 
tell, from actually taking information that we share with them 
post-recall and post-port-stoppage when we have actionable 
information, where they can go in and do something about it.
    We also have a presence on the ground in China in the form 
both of CPSC staff and also a foreign national who supports 
that staff at the State Department. And I think that we are 
building toward a more effective agency, but in the absence of 
having the resources to really push beyond our borders, it is 
going to continue to be a challenge.
    Senator Nelson. Do you need additional authority?
    Mr. Kaye. We certainly need the user-fee authority. 
Absolutely.
    Senator Nelson. All right.
    Now, a few years ago, we were talking about a bill called 
the Foreign Manufacturers Legal Accountability Act, in which 
they would have to appoint a U.S. agent, so if people were hurt 
by their products, we wouldn't go through this nonsense that we 
have gone through on the defective Chinese wallboard. Would 
that help?
    Mr. Kaye. That would help tremendously. Absolutely.
    Senator Nelson. Is there any provision in the corrective 
action plan negotiated by the Office of Compliance that 
contemplates such a later action for a recall failure?
    Mr. Kaye. In terms of having a U.S. presence when there is 
a foreign manufacturer?
    Senator Nelson. On any kind of recall remedy.
    Mr. Kaye. It becomes far more challenging for us when it is 
a foreign entity. And so, unfortunately, it is not as robust as 
I would like to see it.
    Senator Nelson. What about the compliance and the actual 
consumers that are subject to these defective products? Their 
willingness to come forward is pitifully low. It is something 
like only 4 percent. So does this corrective action plan 
address that?
    Mr. Kaye. It attempts to address it, but, as you are 
pointing out, it is often not that successful, which is why we 
are taking a fresh look at trying to figure out how can we be 
more creative and, ultimately, how can companies do more to try 
to make those agreements more effective.
    Senator Nelson. That is a problem we ought to continue to 
look at. Because you get particularly a foreign product that 
comes in and it is defective, and yet people don't realize it. 
And so the ones that have come forward are just de minimis. And 
yet the defective product is out there, choking children in the 
case of the defective Chinese toys.
    Senator Moran. Senator Nelson, thank you. We are happy to 
use this subcommittee's jurisdiction to explore a number of 
issues related to certainly consumer protection.
    I also would use this opportunity to indicate that in a 
couple of instances, Mr. Chairman, you indicated a need for 
additional resources. That is not an unusual statement by any 
witness in any setting here.
    I serve on the Appropriations subcommittee that has 
jurisdiction over your commission. You indicated the need for 
additional resources for data, big data, and here in this 
import surveillance issue. I would be happy to encourage the 
Chairman of the Subcommittee to have a CPSC subcommittee 
hearing related to your Commission, at which you would have the 
opportunity to make the case for those resources.
    I am an optimist, in the sense that I believe we are not 
going to have another--at least another series of continuing 
resolutions and believe that we are going to do an 
appropriation bill. And I think it is a place in which we can 
help prioritize spending at the Commission based upon the input 
of yours and others.
    Mr. Kaye. Thank you, Mr. Chairman.
    If I felt--and hearing you, I think you are saying I would 
have this opportunity--if I felt that there was a genuine 
receptiveness, despite the budget climate, for the Congress to 
hear us out and to recognize that there are two different CPSCs 
you can have--you can have the CPSC that is funded, in my 
perspective, at a very artificial level. Because it has always 
been funded in that general area, and regardless of what 
problems exist, that is just the money it is going to get.
    Or you could have the CPSC that actually is able to step in 
and address things that I think parents are expecting to be 
addressed--crumb rubber, phthalates, flame retardants. There 
are so many different areas--portable generators, drowning 
prevention, ROVs, ATVs, window coverings. Every day, as I 
mentioned earlier, I get these reports. These are ongoing 
issues. We are not even remotely close to being funded at the 
level that would allow us to really make a difference.
    So if I thought that there would be an interest in having 
that honest discussion, recognizing that we have limitations, 
too, and we would have to own up to our mistakes over the 
years, which I am willing to own up to, where we have thought 
that one thing would be the answer and it turned out not to be 
the answer and we may not have used our funds as efficiently as 
possible, if we could have that discussion, I would absolutely 
love to have that discussion, either in the form of a hearing, 
or a meeting at our lab so folks can understand how we have 
used the appropriations. In any context, I would absolutely 
show up.
    Senator Moran. I appreciate those sentiments. I would 
indicate that, of the two topics that we talked about 
additional resources, one of them is included in the 
president's budget request, one is not. So it involves others 
other than just Congress. It involves your commission and the 
OMB and the administration.
    Let me ask Commissioner Buerkle, any response on the 
funding issues?
    Again, we all face constraints. None of us get to spend the 
money that we want, but there is a matter of prioritization. 
But I am very anxious for the day in which not every item of 
spending is considered of equal value.
    And you can certainly make the case and I think many 
members of Congress have believed that a priority should be the 
safety of consumers. And as you describe it, who could disagree 
with that? So the opportunity that we have is certainly 
restricted, but what a great day it would be if we had the 
opportunity to say, ``We are going to spend more money here 
because it is more important.''
    And at too many instances, with no budget passed by 
Congress and an appropriation process stalled, we just 
continue, in a sense, from 1 year to the next without 
determining what matters the most based upon what you tell us, 
based upon what we hear from our constituents, based upon what 
we think is important in our hearts. We don't have the 
opportunity often enough around here to actually utilize the 
power of the purse to try to deal with the most important 
problems that our country faces.
    Commissioner?
    Ms. Buerkle. Thank you, Mr. Chairman. I do have a couple of 
things I would like to say about that.
    Number one, with regards to retailer reporting, you 
mentioned funds for data. We have a current program in place 
right now where there are seven participants. And the Chairman 
said you could hardly call it a program, but I think a lot of 
retailers have depended on that program to meet their reporting 
responsibilities. And we have relied on that information. It is 
very valuable to us.
    To Senator Nelson's point, he is talking about catching 
Chinese, you know, either defects or a violative product. The 
best way to do that is on the front lines with the retailers.
    And so, I guess, in general, what I am encouraging our 
agency to do is, we can't wait around for additional funding. 
There are so many issues with that. If we think something has 
value, we need to reshift and look at our priorities. Perhaps 
we could move away from the civil penalty and some of those 
resources and move those resources over to make sure retailer 
reporting gets a fair deal.
    I think there are--we talked about import surveillance. I 
am opposed to the user fee. I think it is unconstitutional, and 
I mentioned that the last time I was here.
    But, as an agency, if it comes to crumb rubber, if we think 
crumb rubber is an emerging hazard or risk, we need to address 
that. We can't wait and sit back on our laurels and say, 
``Well, if we get the funding.'' I think the agency has a far 
more important mission, and that is to make sure we are on the 
cutting edge. If we identify a hazard or a risk or we think it 
is, it is a question of shifting priorities and making sure 
that we attend to what is most important.
    With regards to import surveillance, we do have the 
capability right now to be at all of our ports. In terms of the 
data, it is a question of people reviewing that data. But it is 
national, so to speak, because we are getting the information 
from all of the ports. But it is a question of making sure we 
look at that data.
    So there are ways to, I think, reshift our priorities, make 
sure we are tending to what is most urgent.
    I think collaborative efforts with the regulated community, 
whether it is retailer reporting, in so many levels, is the key 
to consumer safety. Having them work with us and we not working 
against them is how we are going to best affect consumer 
safety. Because they are willing to work with us, and I think 
the conversations that have gone on within the agency, whether 
it is higher civil penalties or something, they alienate. And I 
think we need to draw the regulated community closer to us.
    Senator Moran. Thank you very much.
    A couple other things I just want to touch briefly, and 
then we will move to our next panel.
    First, I want to express my concern about the general 
counsel's reinterpretation of section 15 as it relates to the 
consequences, the privacy consequences, of someone reporting 
under the Retailer Reporting Program. I am worried that we are 
going to diminish the value of that program.
    And then, second, Mr. Chairman, we had a conversation at 
our hearing on June 17 in which I raised the topic of fireworks 
and the audible standard. My understanding from our 
conversation, your testimony that day was, by the end of the 
Fiscal Year, a few days ago, that there would be some 
resolution or at least development in regard to trying to get a 
subjective standard. We talked about the science of this issue.
    And I just would ask you again if we are there and if you 
could fulfill my request for some certainty there.
    Mr. Kaye. Thanks, Mr. Chairman. And you are right. Your 
memory is very good. I did say that we would have by the end of 
this past fiscal year a package from the staff. And as I 
mentioned earlier, sometimes everything that is being worked on 
just doesn't make it up by a certain deadline.
    The package is close. I know that they wanted to do a 
little bit more technical work. But I am hopeful, when they 
send that package up--which, again, we are going to live by our 
commitment to send that to your office--that we will be moving 
toward a road of much more certainty.
    Senator Moran. I am not quibbling about 7 days.
    Mr. Kaye. OK. I appreciate that.
    Senator Moran. I just wanted to raise this issue with you 
again and ask for your assistance.
    Mr. Kaye. Absolutely.
    Senator Moran. Thank you both very much for your testimony, 
and we will call the second panel to the table. Thank you.
    Mr. Kaye. Thank you.
    Ms. Buerkle. Thank you very much.
    Senator Moran. And that panel consists of Mr. Frederick 
Locker, who is a Partner with Locker Greenberg & Brainin, on 
behalf of the National Association of Manufacturers; Mr. 
Jonathan Gold, Vice President, National Retail Federation; Ms. 
Cheryl Falvey, Partner at Crowell & Moring in Washington, D.C.; 
and Ms. Nancy Cowles, Executive Director, Kids in Danger, 
Chicago, Illinois.
    Mr. Locker, welcome. And to all of you, welcome to the 
Committee. And we look forward to--I look forward to hearing 
your testimony.

         STATEMENT OF FREDERICK (RICK) LOCKER, PARTNER,

         LOCKER GREENBERG & BRAININ, LLP, ON BEHALF OF

           THE NATIONAL ASSOCIATION OF MANUFACTURERS

    Mr. Locker. Thank you, Mr. Chairman. We welcome the 
opportunity to be here and talk with you today about these very 
important issues.
    So I have spent more than 30 years focusing on improving 
safety standards for a wide array of children and other 
consumer products. And maintaining an effective, expedient 
recall or safety alert process, I believe, is in everyone's 
interest. It is and should remain a nonpartisan issue.
    I appear before you as a member of the National Association 
of Manufacturers' CPSC Coalition, which provides a unified 
voice for manufacturers and retailers on CPSC-related issues. 
We are comprised of manufacturers, retailers, trade 
associations, a wide array of stakeholders within and without a 
variety of industries.
    We are committed to consumer product safety and working in 
cooperation with the CPSC, an agency we have supported for 
many, many years. And we have a shared interest and goals in 
risk reduction and hazard avoidance. We encourage improved 
collaboration between all stakeholders, the Commission, and its 
staff. And we have supported the mission of the agency and, 
importantly, funding for it, as well, for many, many years.
    Now, in November 2013, the CPSC issued a proposed rule that 
you have focused on here today. And while well-intended, we 
came to the conclusion that it could negatively impact the 
Commission's voluntary recall remedy process.
    And let's understand what we are talking about. Most 
recalls, clearly, you know, 99.5 percent of them, are what we 
call voluntary recalls today. They may occur because of a 
violation of an act or a regulation, which is in the minority, 
but most occur because of unforeseen circumstances and are 
developed and implemented voluntarily by companies in 
collaboration with the agency.
    This year, as you have noted, it remained in the operating 
plan, despite comments that such a rule is not a priority and 
that it needs to be reworked.
    So, for nearly 40 years, you know, manufacturers and 
retailers have extensively participated in the Commission's 
plans. Now, the CPSC proposed rule includes, as you have noted, 
several substantive provisions that would unfavorably alter the 
cooperative process--at least, that is what we believe--by 
which firms work with the Commission to implement these 
voluntary recalls.
    These substantive provisions would require firms to execute 
legally binding agreements in the doc compliance programs as 
part of a voluntary corrective action plan. So, rather than 
improving these recalls, they could negatively impact the 
efficiency, cooperative spirit, and the speed that is evident 
in the current voluntary recall process. And this could be the 
detriment of consumer product safety.
    And CPSC has noted that 90 percent of recalls initiated 
through its, as you have cited, award-winning Fast Track 
Program were commenced quickly and occurred with relative speed 
and alacrity. We are concerned that there is a current 
creeping, if you will, a paralysis by bureaucracy before it 
gets to that point. And, actually, the Fast Track recalls, 
which the former chairman of the agency, a Democratic chairman, 
cited to, has actually become a much slower process than it 
used to be.
    I am not saying that when it rises to the Commission level 
that they don't act fast. I am saying it is taking longer to 
get to that level. So, in that regard, we say do not diminish 
the existing reporting and recall process that is flexible and 
effective.
    We say do not require over-lawyering of negotiated 
voluntary actions. Remember, most businesses that are in our 
members, 80 percent of them, and 90 percent of American 
businesses are small businesses. They are the job creators. 
They tend to approach these agencies in a cooperative fashion. 
They want to negotiate. Very often, they want to implement 
corrective action plans or do recalls. And they want to do so 
without having to engage a lawyer, which can be expensive, with 
all due respect to my brethren in the legal community.
    So we don't want to take that away. We don't want to create 
additional liability or have factors that come into play that 
would require them to over-lawyer and delay the process. We 
want it to proceed in an efficient manner.
    We say, as part of that, you shouldn't require automatic 
admissions of disclaim liability or a defect in a plan. In the 
commission's own recall handbook, in your own rules, in your 
own statutes, you say that there is not a presumption of defect 
or liability. But yet, in this rule, it would impose one.
    So that is why we think you had a lot of comments in 
opposition to it, and that is why I think both commissioners 
recognize there needed to be a change.
    And, finally, we believe the Commission can actually 
already act should the public be at risk. So, as Senator Nelson 
noted, if there is an imminent hazard, the Commission has ample 
authority to act, and it can act against any distributor, 
manufacturer, or retailer of that product. And they do so. And 
that is what experience tells us; they have that authority.
    And, finally, compliance assurances, which were built into 
the rule, should not be part of a voluntary corrective action 
plan, which should stand on their own so that they can be 
efficiently and quickly implemented.
    And, in conclusion, I would simply say, as in the medical 
community, I would cite to the Hippocratic Oath, which is, ``Do 
no harm,'' and the same should apply to safety regulators. We 
all have an interest in promoting safety and making sure it is 
effectively carried out.
    In short, we believe that collaborative processes, which 
many people here today have talked about, that promote 
voluntary corrective actions in a timely, expedient manner 
should not be undermined by imposition of additional extraneous 
requirements that could hamper flexible and creative solutions 
that often come into play in the voluntary-initiated recall 
processes, distinct from mandatory recalls.
    The commission should consider a refined communications 
strategy for such action plans that clearly identify and 
communicate the hazard sought to be remedied and the remedy 
available. Not every action needs to be labeled a, quote/
unquote, ``recall.'' Experience indicates that alerts, 
information and education efforts, and offerings of accessories 
that enhance safety by product category can reduce misuse and 
can be extremely beneficial to the American consumer and to 
American business.
    Safety is good business. Safety is an important aspect of 
business. If you don't have that reputation for selling safe 
products, you are not going to be in business for a very long 
time.
    Maintaining this flexible system that encourages and 
rewards such efforts we believe is highly, highly desirable. 
And we welcome the recently noted collegiality among the 
commissioners, as they have talked about, and would urge all of 
them to work toward non-controversial, effective solutions that 
actually enhance creative, expedient, voluntary recalls.
    Thank you.
    [The prepared statement of Mr. Locker follows:]

    Prepared Statement of Frederick (Rick) Locker, Partner, Locker 
  Greenberg & Brainin, LLP, on behalf of the National Association of 
                             Manufacturers
    Chairman Moran, Ranking Member Blumenthal and members of the 
Subcommittee on Consumer Protection, Product Safety, Insurance and Data 
Security, thank you for the opportunity to testify about the U.S. 
Consumer Product Safety Commission's (CPSC) voluntary recall process. 
My Bio is annexed.
    I appreciate the opportunity to appear before you as a member of 
the National Association of Manufacturers CPSC Coalition, which 
provides a unified voice for manufacturers and retailers on CPSC-
related issues. The NAM coalition is comprised of manufacturers, 
retailers, trade associations and law firms representing the array 
consumer product industries. Many of the CPSC's initiatives directly 
impact the collective of industries. Even industry-specific initiatives 
can set a precedent that impacts all manufacturers and retailers of 
consumer products. Members of the NAM CPSC Coalition are committed to 
consumer product safety and working in cooperation with the CPSC in 
furtherance of shared goals of risk reduction and hazard avoidance. We 
encourage improved collaboration between all stakeholders and the 
Commission and its staff before the Commission puts forth significant 
policy proposals. Cooperation with stakeholders while the agency is 
developing changes in substantive policies would lead to improved 
proposals and reduces the potential for conflicts or unintended 
consequences of that can arise. Too often, though, stakeholders and the 
rest of the public are provided limited notice of significant proposed 
changes to policies that could greatly impact the abilities of both the 
Commission, related government agencies and businesses to minimize 
risks posed to the public.
    In November 2013, the CPSC issued a proposed rule (78 Fed. Reg. 
69793) that could negatively impact the Commission's voluntary recall 
process and would place significant burdens on manufacturers and 
retailers. The CPSC conducted no public outreach as it developed its 
proposal. Despite extensive opposition to the proposed rule, the 
Commission voted in May to keep the issuance of a final rule in its FY 
2015 operating plan. The Commission took this action despite repeated 
comments by Chairman Elliot Kaye that the voluntary recall rule is not 
a priority because it would not necessarily improve safety.
    For nearly 40 years, manufacturers and retailers have watched and 
participated in the Commission's voluntary corrective action process. 
They have reported potential safety problems and undertaken voluntary 
corrective action for various reasons; sometimes out of an abundance of 
caution, protecting consumers by preventing future incidents and 
standing behind their products. For that reason, the CPSC's current 
system geared to encouraging expedient voluntary recalls has been and 
continues to be relatively effective in ensuring appropriate 
notifications to the CPSC and voluntary recalls in furtherance of 
product safety or availability of improved products to customers and 
consumers. Simply stated, the existing voluntary recall process has 
proven an efficient and effective way of quickly addressing product 
safety concerns or providing consumers with options to enhance products 
in their poses session. There is no preponderance of data to support 
the conclusion that the CPSC's current approach to negotiating 
voluntary corrective actions is deficient or in need of radical change.
I. Executive Summary and Background
    The CPSC's proposed rule includes several substantive provisions 
that would unfavorably alter the cooperative process by which firms 
work with the Commission to implement voluntary recalls. These 
substantive provisions would require firms to execute legally binding 
agreements and adopt compliance programs in voluntary corrective action 
plans. Rather than improving recalls, the proposed rule in its current 
form could negatively impact the efficiency, cooperative spirit and 
speed of the CPSC's voluntary recall process to the detriment of 
consumer product safety. Manufacturers and retailers are concerned that 
these proposed changes raise policy concerns that could negatively 
alter the longstanding process for implementing an expedient voluntary 
recall in cooperation with the CPSC.
    For a number of reasons that will be discussed, the proposed rule 
is unnecessary, could substantially erode the success of the 
Commission's voluntary recall process, could undermine due process 
afforded under the Administrative Procedure Act (APA) and is not 
required under the Consumer Product Safety Act (CPSA). In the absence 
of any data that the CPSC's existing voluntary recall framework is 
inadequate and because aspects of the proposed rule are not needed per 
statute, I urge the Commission, consistent with comments in opposition 
and recent statements made in relation to the noticed rule to withdraw 
it at this time.
    I also encourage the Commission to cooperatively develop with 
stakeholders strategies that will improve the effectiveness of recalls 
and accomplish the desired policy objectives in a flexible fashion. The 
proposed rule as drafted, could significantly impede and undercut the 
Commission's current relatively expedient voluntary recall practice. 
Careful consideration by the Commission in consultation with 
stakeholders would be preferable to precipitous action that might 
require correction later. The Commission should engage all interested 
parties--consumers, industry and staff--in constructive meetings to 
discuss ways the current corrective action process might be enhanced, 
if required based upon the evidence before it.
II. The Existing Recall Process is Effective
    Throughout its history, the CPSC has relied on reporting and 
voluntary corrective action plans to remove hazardous products from the 
marketplace. While there have in rare instances been disputes between 
parties, delays or disagreements, the staff has adequate tools to 
obtain the desired corrective action or to address the risks. There are 
no published data to support the conclusion that the existing voluntary 
recall process is inadequate. In fact, the CPSC recently noted that 90 
percent of recalls initiated through the CPSC's award-winning Fast 
Track recall process were commenced within 20 working days of notifying 
the Commission.\1\ In light of such recent data showing the success of 
the existing voluntary recall process, the proposed rule's more 
substantive changes are plainly unnecessary and the Commission should 
withdraw the proposed rule. There is a compelling cliche that applies 
to the context in which this rule is proposed: ``If it ain't broke, 
don't fix it.'' There is often wisdom in such cliches, and that wisdom 
has seemingly been ignored for certain aspects of this proposal.
---------------------------------------------------------------------------
    \1\ See http://www.cpsc.gov/Global/About-CPSC/Budget-and-
Performance/2014BudgettoCongr
essSupplementalAppendix.pdf
---------------------------------------------------------------------------
III. The Proposed Rule Would Negatively Impact Implementation of 
        Voluntary Recalls
    The Commission asserts as background that the ``Consumer Product 
Safety Improvement Act of 2008, Public Law 110-314, 122 Stat. 3016 
(2008) (CPSIA), amended the CPSA to strengthen the CPSC's authority to 
recall products and to notify the public effectively about the scope of 
a recall and available remedies'' (78 Fed. Reg. 69794). Unfortunately 
for the reasons set forth in more detail below, the proposed rule would 
create impediments to the Commission's voluntary recall process and 
reduce recall effectiveness. There also has been no convincing data to 
support the conclusion that the proposal is necessary or that there is 
a problem that the Commission does not already have the authority and 
tools to address.
    Rather than enhancing recalls, these provisions will make it more 
difficult for companies and compliance officers to undertake recalls. 
The proposed changes will extend the period of negotiation between a 
subject firm and the CPSC staff, slowing down or impeding agreement on 
corrective action plans. Disputes over descriptive language and format 
conventions of recall notices can delay the process without any 
measurable positive impact on recall effectiveness. Any delays in 
implementing a recall can result in increased risks to consumers. At 
the same time, the proposed provisions will force firms to more often 
seek the advice of counsel and will likely make the recall negotiation 
process more complicated and adversarial than necessary. This is 
contrary to the stated goal of such rule.
    Perhaps most important, the CPSC's proposal will fundamentally 
change the cooperative relationship between industry and the Commission 
that has resulted in thousands of reports and voluntary recalls. There 
is simply no evidence that any of these changes are necessary, that 
they will improve recall effectiveness in any way or that they add in 
any measurable way to protection of consumers. Instead of enhancing the 
current recall process, this proposed rule will be counterproductive in 
the Commission's efforts to improve the effectiveness of recalls. New 
substantive requirements and increased enforcement jeopardy could have 
a chilling effect on how firms communicate and cooperate with the 
Commission--delaying the recall process.
    Ultimately, consumers have to cope with an incredible amount of 
product information and information overload is a real problem that 
affects consumer response to recall notices. Many factors besides 
seeing a notice likely affect consumer response and recall 
effectiveness.\2\ The CPSC may consider addressing this concern by 
working cooperatively with stakeholders, as the high number of recalls 
for products posing little or no risk has arguably reduced the 
effectiveness of efforts to protect the public from actual risks. This 
is a significant issue that likely has far more impact on the 
effectiveness of the CPSC recall program than anything in this proposed 
rule. The proposed rule does not help with this problem. If anything, 
it increases the amount of negotiation and workload for the staff no 
matter how serious the risk of injury and does little to eliminate the 
problem of consumer information overload or to help consumers decide 
how to respond to CPSC recalls.
---------------------------------------------------------------------------
    \2\ Commission ``Recall Effectiveness'' literature study, 2003. 
That study noted the need for additional research but there is no 
public information that shows that such research has taken place and it 
is not cited in the proposal. The Commission should focus on developing 
a tiered approach to recalls that measure success on the basis or 
relative risk and outreach, in lieu of metrics focused solely on 
product returns, which are impacted by a myriad of external factors 
beyond the control of CPSC or Industry.
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IV. The Statutory Pretext for Proposed Substantive Provisions is 
        Unjustified and Does Not Comply with Required Rulemaking 
        Procedures
    The preamble to the proposed rule recognizes that section 214 of 
the CPSIA directs the Commission to issue guidelines for notice in 
mandatory recalls ordered after a substantial product hazard hearing. 
The Commission has in fact issued that regulation.\3\ The preamble goes 
on, however, to suggest that the House of Representatives' committee of 
jurisdiction ``explicitly expressed an expectation that similar 
information would be provided, as applicable and to the greatest extent 
possible'' in voluntary recall notices. The Commission's assertion that 
the House committee, through a committee report, directed the 
Commission to issue regulations for the content of voluntary recall is 
incorrect and misrepresents the legislative history of the CPSIA. The 
actual language referenced by the Commission as providing authority to 
regulate voluntary recalls is provided below:
---------------------------------------------------------------------------
    \3\ 16 C.F.R. Sec. Sec. 1115.23-29, 75 Fed. Reg. 3355 (Jan. 21, 
2010)

        Subsection (c) further amends Section 15 by adding a new 
        subsection (i) requiring the CPSC by rule to set guidelines on 
        a uniform class of information in mandatory recall notices 
        under subsection (c) or (d) or under section 12 of the CPSA. 
        The guidelines should include information helpful to consumers 
        in identifying the specific product, understanding the hazard, 
        and understanding the available remedy. The Committee expects 
        that similar information will be provided, as applicable and to 
        the greatest extent possible, in the notices issued in 
        voluntary recalls.\4\
---------------------------------------------------------------------------
    \4\ H.R. Rep. No. 110-501 at 40 (2008)

    In citing this language, the Commission makes several fundamental 
errors. First, it ignores the fact that the legislation and even the 
Committee comment do not suggest or authorize rulemaking with respect 
to voluntary corrective actions as the CPSIA explicitly did for 
mandatory recalls. Second, the Commission seeks to give legislative 
weight to language in the legislative history. It is a basic precept of 
administrative law that one looks first to the plain language of the 
statute. A committee report certainly cannot be given the weight of 
legislation. Additionally, the preamble ignores obvious qualifiers in 
the legislative history comment the Commission paraphrases. The 
committee report recognized that in voluntary corrective actions, 
``similar''--not necessarily identical--information could be provided. 
The language further uses the term ``as applicable,'' recognizing that 
such notice requirements might not be applicable in all voluntary 
recalls. Finally, the scope and extent of many of the changes proposed 
in this rule exceed or are different in scope than the legislative and 
regulatory provisions for mandatory recalls.
    Yet, based on that inadequate legal rationale and vague statements 
about the staff's experience with recalls, the detailed mandatory 
requirements contained in the proposed rule have many of the hallmarks 
of a substantive rule. The Commission asserts that its proposal is an 
``interpretative rule to set forth principles and guidelines for the 
content and form of voluntary recall notices that firms provide as part 
of corrective action plans under Section 15 of the Consumer Product 
Safety Act'' (78 Fed. Reg. 69794-5). Though the APA (5 U.S.C. 
Subchapter II) does not explicitly define an ``interpretative rule,'' 
certain characteristics of a rule that would make it an 
``interpretative rule'' are universally accepted: An interpretative 
rule interprets a statutory term or agency regulation and is not 
legally binding on regulated entities or courts. Conversely, a 
substantive rule has the force and effect of law (43 Fed. Reg. 34988, 
34990, Aug. 7, 1978).
    Many provisions of the proposed rule such as imposing mandatory and 
enforceable corrective action plans, prohibiting a firm from 
disclaiming admission of a defect or potential hazard and authorizing 
the staff to demand compliance program-related requirements in 
corrective action plans are in direct conflict with the 
``interpretative rule'' definition. The proposed rule would place new 
obligations on companies, enlarge the scope of section 1115.20(a) and 
go beyond merely providing guidance about the existing voluntary recall 
rule. The Commission is proposing fundamental changes of longstanding 
practice that establish new rights and responsibilities and legally 
bind subject firms in ways not currently provided for under section 
1115.20(a). Because the proposed rule would be the basis for 
enforcement decisions and would broaden existing legal requirements, 
the Commission should comply with the rulemaking procedures established 
by the APA for substantive rules.\5\ It is improper to classify the 
proposed rule as ``interpretative.'' As such, the Commission should 
have engaged in proper rulemaking procedures, including the analytical 
requirements that are statutorily mandated.
---------------------------------------------------------------------------
    \5\ See Appalachian Power Co. v. EPA, 208 F.3d 1015, 1028 (D.C. 
Cir. 2000)
---------------------------------------------------------------------------
V. Voluntary Corrective Action Plans Are As a Practical Matter Already 
        Binding
    The Commission seeks to redefine voluntary corrective action plans 
as may be agreed to between firms and the Commission staff as re-
codified distinct legally binding separate contracts. This is 
ostensibly related to a desire for greater leverage when dealing with 
the rare occurrence when a firm declines to honor its obligations under 
a voluntary corrective action plan. Yet this almost never occur and the 
Commission itself has and retains broad authority to take action under 
existing statutory authority to compel corrective action or issue 
unilateral public notice to prevent imminent hazards. Under such 
circumstances such provision is unnecessary, contrary to the letter and 
spirit of the original voluntary recall rule and not authorized by the 
CPSC's statutes (40 Fed. Reg. 30938, July 24, 1975). There is no 
compelling reason to transform a firm's voluntary, proactive efforts to 
address a safety concern into a legal negotiation over binding terms--
the equivalent of a settlement agreement. This change would result in 
unintended consequences that would delay implementation of a voluntary 
recall. In practice many small businesses, which have been the engine 
for economic growth in the U.S.,\6\ voluntarily negotiate and implement 
corrective action plans directly with Commission staff (both within and 
without the CPSC's Fast Track recall Program) without the need for 
costly legal representation and protracted negotiation. To the extent 
the Commission seeks to impose additional contractual obligations 
related to unrelated quality assurance processes or require companies, 
as part and parcel of voluntary recalls, to admit the existence of a 
product defect when they do not believe one to exist, the requirement 
for legal review becomes essential instead of optional. For these 
reasons, many small businesses and industries regulated by the CPSC 
have opposed to this provision of the proposed rule.
---------------------------------------------------------------------------
    \6\ Small businesses make up: 99.7 percent of U.S. employer firms, 
64 percent of net new private-sector jobs, 49.2 of private-sector 
payroll, 46 percent of private-sector output, 43 percent of high-tech 
employment, 98 percent of firms exporting goods, and 33 percent of 
exporting value. Source: U.S. Census Bureau, SUSB, CPS; International 
Trade Administration; Bureau of Labor Statistics, BED; Advocacy-funded 
research, Small Business GDP: Update 2002-2010, www.sba.gov/advocacy/
7540/42371
---------------------------------------------------------------------------
    Making voluntary corrective action plans legally binding is also 
unnecessary because the Commission has existing authority to address 
the very rare situation when a firm declines to comply with its 
voluntary recall plan. At the time of the CPSC's original voluntary 
recall rule--and now--the Commission has had the authority to seek a 
binding consent agreement if the percent of private-sector employment, 
42.9 percent of private-sector payroll, 46 percent of private-sector 
output, 43 percent of high-tech employment, 98 percent of firms 
exporting goods, and 33 percent of exporting value. Commission has 
reason to believe that an enforceable agreement is necessary (16 C.F.R. 
Sec. 1115.20(b)). In the entire history of the CPSC, it has used the 
consent order agreement option very sparingly, even when enforcing 
rules against repeat violators, yet the fact remains that the CPSC 
retains authority to act in the rare situation involving a recalcitrant 
firm.
    The Commission's proposal would also undermine the original intent 
behind the voluntary corrective action rule--to remove impediments to 
quickly execute a voluntary recall. The Commission has long 
acknowledged that the ``primary purpose of a corrective action plan is 
to protect the public from a substantial risk of injury presented by a 
consumer product and to do so as quickly as possible'' (43 Fed. Reg. 
34988, 34996, Aug. 7, 1978). In the past, reporting and corrective 
actions increased when cooperative efforts such as the Fast Track 
recall program made the negotiation and completion of recalls easier. 
Making the process more difficult and contentious for firms that want 
to conduct recalls will have the opposite effect. Among other things, 
the proposed rule would create additional obstacles that would encumber 
the CPSC staff and firms in trying to negotiate the terms of a 
corrective action plan and subsequent modification, which may improve 
the effectiveness of recall efforts. This would waste staff resources 
and delay protection of the public.
VI. The Commission Should Not Change a Firm's Ability to Disclaim 
        Admission of a Defect or Potential Hazard
    Voluntary corrective actions are often undertaken in the face of 
ambiguous or incomplete hazard information. At the same time, firms 
must worry that admissions about an alleged hazard can have legal 
consequences in product liability, other commercial contexts or in a 
civil penalty matter. For that reason and to encourage firms to quickly 
address safety concerns, the Commission provided that firms could 
disclaim that their voluntary actions constituted an admission either 
of the need to report or that a substantial product hazard existed. 
This has been an important incentive to reporting and cooperating in 
voluntary corrective action. The Commission provides no evidence that 
such disclaimers have in any way harmed consumer protection over the 
history of the recall program.
    Now, the Commission proposes to give the CPSC staff veto authority 
over such disclaimers. The preamble indicates that the CPSC may 
actually use this change as ``an opportunity for the Commission to 
negotiate and agree to appropriate admissions in each particular 
corrective action plan'' (78 Fed. Reg. 69795).There are no data that 
demonstrate that this change might enhance recall effectiveness or 
public safety and certainly no indication in the proposed rule of how 
the current policy has hamstrung the Commission in achieving good 
corrective action plans or consent agreements to safeguard the public. 
This change would unreasonably restrict a firm's ability to disclaim 
admission of a defect or potential hazard and conflicts with the First 
Amendment rights of manufacturers and retailers to the extent that it 
would preclude them from making truthful public statements expressing 
their views regarding the existence of a safety defect.
    In short, there is no compelling reason to change the Commission's 
current disclaimer practice in connection with a voluntary recall. This 
change can only delay recall implementation to the detriment of 
consumers. This provision is unsupported and unsupportable based on 
safety and constitutional considerations and would not withstand legal 
scrutiny.
VII. Compliance Programs Do Not Automatically Belong in Corrective 
        Action Plans
    The Commission proposes to include in corrective action plans 
binding ``compliance program-related requirements.'' The preamble and 
proposed Sec. 1115.20(b) suggest that such provisions would be ``in the 
Commission's discretion.'' That decision might be based on multiple 
previous recalls in a short period of time, evidence of insufficient 
controls, evidence of a reporting violation or other factors (78 Fed. 
Reg. 69795). Under the proposed rule, such programs would be compulsory 
as part of a legally-binding corrective action agreement. This 
provision would have unintended consequences and is not authorized by 
any provision of the CPSA. Section 15 of the CPSA allows the CPSC to 
order recalls and notices; it does not give the agency authority to 
tell firms how to structure their businesses or internal procedures.
    In practice, the compliance program requirements would dramatically 
slow the voluntary recall process. The CPSC staff would be required to 
conduct an appropriate investigation to determine whether the 
circumstances of a particular recall might merit revising a firm's 
existing compliance program. To forgo such an inquiry would deprive 
firms of due process and the opportunity to present information and 
arguments in defense of their existing compliance programs. Such 
process is afforded firms in the civil penalty context, but would not 
exist under the proposed rule (16 C.F.R. Sec. 1119.5). This would 
result in delay for consumers awaiting implementation of a recall and 
is contrary to the intent of the original substantial hazard rule. 
Equally unacceptable would be the CPSC imposing a compliance program 
requirement in haste and without a fair or objective inquiry. The 
implementation of a voluntary recall is not the appropriate occasion 
for the CPSC to seek changes to businesses' compliance processes.
    The proposed rule's insistence that multiple prior recalls would be 
a basis to demand compliance programs is also contrary to public policy 
and the lessons from the Commission's history. There are no data to 
support the conclusion that multiple recalls are indicative of an 
inadequate compliance program. Such recalls may indicate the exact 
opposite: Firms have demonstrated responsible scrutiny and action to 
ensure consumer safety. There is also no evidence that the absence of 
multiple recalls provides assurances that a firm has an adequate 
compliance program. Given the view by many--regulated industry and 
consumers alike--that product recalls are salutary actions taken by 
responsible economic actors when necessary or because of a desire to 
act out of an abundance of caution, the proposed rule's treatment of 
multiple recalls as evidence of poor compliance processes is wrong as a 
policy matter. The proposed rule would penalize those who act most 
responsibly, especially for carrying out a voluntary recall when a risk 
of serious injury is not likely.
    The proposed rule acknowledges that compliance program requirements 
would ``echo'' similar requirements sought as part of recent civil 
penalty settlement agreements (78 Fed. Reg. 69795). Responsible 
companies should have compliance programs. However, apart from the 
Commission's desire to seek compliance programs, nowhere does the 
proposed rule identify the legal basis for the Commission to demand a 
compliance program in connection with a voluntary recall. For all the 
foregoing reasons, the Commission should withdraw this proposal.\7\
---------------------------------------------------------------------------
    \7\ The proposed compliance program requirements would also be the 
basis for Commission enforcement decisions including the decision to 
seek civil penalties. This and other aspects of the proposed rule 
create substantive obligations that compliance with the rulemaking 
procedures established by the APA for substantive rules.
---------------------------------------------------------------------------
VIII. Requiring Corrective Action Plans to be Compliant with CPSC Rules 
        is Unnecessary
    The Commission provides in its proposed rule that ``remedial 
actions set forth in a corrective action plan . . . [comply] . . . with 
all applicable CPSC rules, regulations, standards, or bans'' (78 Fed. 
Reg. 69795). This would appear to be unnecessary and redundant and adds 
nothing of substance to existing safeguards. Manufacturers and 
retailers are nonetheless concerned that this provision could create 
additional enforcement mechanisms, particularly as the staff seeks to 
exercise some enforcement discretion in determining what violations to 
remedy and how to do so.
IX. Guidelines for Voluntary Recall Notices Will Not Improve the 
        Effectiveness of Recalls
    The staff defines the purpose of the proposed rule in terms of 
clearly communicating hazard and recall information to the public. 
Specifically, proposed Sec. 1115.30 states that the guidelines will 
``help ensure that every voluntary recall notice effectively helps 
consumers and other persons to'' identify the product, understand the 
actual or potential hazards, understand all available remedies and take 
appropriate actions (78 Fed. Reg. 69800). Many of these provisions are 
not supported by evidence that they will actually better inform or 
motivate consumers to participate in recalls. By mandating a laundry 
list of requirements and options for voluntary recall notices, the CPSC 
would constrain flexibility and may actually prevent more effective 
remedial actions that are not included on the prescribed list. The 
notice requirements seem to be based not in the principles for better 
notice cited but instead in existing staff practice and the rule for 
mandatory recalls under subpart C of 16 C.F.R. Sec. 1115 (Guidelines 
and Requirements for Mandatory Recall Notices).
    As discussed, the Commission lacks the statutory authority to issue 
guidelines for voluntary recall notices through regulation. Moreover, 
proposed subpart D mandates the content of voluntary recall notices, 
which clearly binds both the CPSC staff and firms and thus makes this 
provision a substantive change to the existing process.
a. Calling All Corrective Actions a ``Recall'' Reduces Effectiveness
    The proposed rule requires use of the word ``recall'' in the 
heading and text of a recall notice, rather than any alternative term. 
Calling a corrective action plan a ``recall'' when the action needed to 
address a potential hazard is far more limited than a refund or 
replacement could mislead consumers. Calling each and every corrective 
action a ``recall'' also adds to growing concern that consumers are 
experiencing ``recall fatigue'' as a result of the increasing number of 
recalls.\8\ As a result of recall overload, getting the attention of 
consumers when a notice involves a significant risk of harm contrasted 
with a minor technical issue or action out of an abundance of caution 
based on unverified information is becoming increasingly difficult. 
Rather than address these types of legitimate concerns, the proposed 
rule will contribute to this recall fatigue. A tiered approach with 
more accurate nomenclature may be useful to better distinguish Alerts, 
Warnings related to misuse of products and voluntary offerings of 
product accessories that enhance safe use by consumers of products.
---------------------------------------------------------------------------
    \8\ See, e.g., Christopher Doering, Surge in Products Being 
Recalled May be Numbing Consumers, USA Today, June 10, 2012; Lyndsey 
Layton, Officials Worry About Consumers Lost Among the Recalls, Wash. 
Post, July 2, 2010.
---------------------------------------------------------------------------
b. Recall Notices Should Include Information That is Actually Helpful 
        and May Not Need to Include Extraneous Information
    The proposed rule requires the headline of a recall notice to 
include specific information, even if the information would not improve 
the effectiveness of the recall effort, and precludes information that 
could be helpful to consumers. The Commission's proposal would 
eliminate flexibility needed to most effectively communicate hazards to 
consumers in some circumstances. For example, the proposed rule 
requires the headline to include the type of product being recalled, 
but does not permit the headline to identify the model of the product 
at issue. As a result, the headline may draw the attention of many 
consumers who do not own the product, creating needless concern, while 
consumers who would recognize a popular product's name might overlook 
the notice. A headline focusing on the type of product may also 
needlessly tarnish a firm's entire product line when the safety concern 
is limited to a single model.
    The proposed rule requires the listing of the names of ``each 
manufacturer'' including foreign and domestic firms, beyond those firms 
named on the product or the name a consumer is likely to associate with 
the product, typically the brand, listed manufacturer or private 
labeler. This exceeds the provision Congress prescribed for mandatory 
recalls and is not likely to assist consumers. The names of other 
manufacturers, foreign and domestic, will not help the consumer 
identify the product and does not serve the provision's stated purpose. 
Extraneous information may confuse consumers, add to the problem of 
consumer information overload and actually decrease the effectiveness 
of the recall notice.
    Further, many manufacturers and private labelers view the identity 
of their product suppliers as confidential commercial information, and 
revealing this information to competitors or the public can effectively 
destroy a manufacturer's competitive advantage without a commensurate 
public safety benefit. Disclosure of the identity of a manufacturer 
could present significant trade secret concerns when this information 
must be made available to distributors and retailers. Companies have 
developed processes to protect this information, and those processes 
must be respected.
    The Commission's proposal would also permit the staff to include a 
reference to a compliance program in the recall notice. However, the 
Commission provides no criteria for when this information should be 
included. Moreover, there is no evidence indicating that the inclusion 
of such information serves the stated purpose of subpart D and would 
improve the effectiveness of the recall. Since this information is not 
necessary to inform consumers of the recall, or motivate them to take 
necessary action, it does not further the objectives of a product 
safety recall notice and should be dropped from the proposed rule. An 
insistence by the staff that compliance program information be included 
in a recall notice would hinder the implementation of a timely and 
effective recall, and once again erode the cooperative nature of the 
voluntary recall program. The inclusion of this information could also 
mislead consumers by implying that a firm did not have an adequate 
compliance program and that it caused the defect. A company could face 
significant reputational harm from such a provision. There is simply no 
reason to believe that voluntary recall notices would be more effective 
because of inclusion of this information, which is not required by 
Congress for mandatory recalls.
c. Statements in the Notice and Disclosures of Information Should be 
        Accurate and Truthful
    The provision suggests that the recall notice should state that a 
hazard ``can'' occur when there have been incidents or injuries 
associated with the recalled product. Product hazards often are 
``associated'' with a product but have nothing to do with a defect that 
leads to a recall. In some cases, it is clear that the account of an 
alleged incident is not reliable and using such incidents as a basis 
for such language is plainly unfair. Issues such as use, misuse, 
probability and other contributing factors may be necessary for the 
consumer to fully understand the hazard and to assist them with their 
decision making. Firms may also recall products due to insignificant 
deviations from standards or for business reasons when even a remote 
risk, not reasonably likely to occur may have occur due to a variety of 
unreasonable circumstances. Requiring firms to provide information 
without the necessary context and qualifiers, such as identifying 
circumstances where a hazard ``may'' or ``could'' occur, would reduce 
the effectiveness of a recall notice by failing to accurately inform 
consumers. Such unequivocal language may not only be inappropriate when 
there is a low risk of injury, but could adversely affect companies in 
product liability litigation, particularly when viewed in light of the 
proposed rule's limit on disclaimers in notices.
    The proposed rule indicates that a recall notice should include the 
names of ``significant retailers'' and establishes criteria defining 
when a retailer is considered significant. The proposal does not 
indicate how or whether the CPSC staff would apply the criteria. As the 
stated purpose of subpart D is to help ensure that a recall notice 
effectively helps the consumer identify the product, simply naming a 
large retailer would not provide the consumer useful information if 
that chain did not sell a significant number of products and would 
needlessly result in even greater information overload for consumers. 
This provision could lead to naming of firms because they have 
significant market presence and might obtain attention for a Commission 
press release at the cost of misleading consumers about the actual 
places where they purchased a particular product and may unfairly 
tarnish the reputations of retailers.
    The Commission through proposed Sec. 1115.34(n) is attempting to 
impose new reporting obligations on subject firms and requires the 
disclosure of information that may not improve the effectiveness of a 
recall notice. Mandating such information also may have unintended 
consequences, and the inclusion of that information may not be 
necessary. Moreover, incidents and their actual causation are sometimes 
disputed and can be the subject of on-going liability disputes or other 
legal processes. In these cases, corrective action may be delayed as 
the CPSC staff and the firm negotiate the disclosure of information 
that may not improve the effectiveness of the recall notice.
    The provision also requires firms to ``immediately'' report any new 
information to allow the Commission to issue new recall notices. It is 
not clear whether the Commission intends the 24-hour definition of 
``immediately'' in subsection 1115.15(e) to apply in this context. 
Firms may not be able to adequately report new information as they work 
to obtain reliable information about an alleged incident. An incident 
actually may not involve an initially named product or the defect 
identified in a recall. This provision may require firms to supply 
misinformation, which would harm efforts to accurately inform 
consumers.
    Firms currently provide incident updates in monthly progress 
reports. In addition, the Commission advises firms that under section 
15(b) they may have to report new or additional incident data that 
suggests that the scope of a defect or non-compliance is not 
understood. The proposal provides no evidence that this existing system 
is insufficient or does not allow the staff to make reasonable 
decisions with firms about the need for further notice. The proposal 
seems to place additional requirements upon firms and places them in 
additional enforcement jeopardy without evidence that this mandate will 
help protect consumers. This inflexible provision is more likely to 
lead to additional dispute rather than cooperation.
d. Changes in an Action Plan Should Not Trigger a New Agreement and 
        Notice
    Proposed Sec. 1115.34(o)(4) would require that any changes to a 
voluntary corrective action plan must be memorialized in both a new 
agreement and a new notice. This could result in further discussion and 
disagreements under this proposal and may delay useful changes that 
could protect consumers. In addition, some procedural changes may have 
absolutely no effect on consumers, and requiring that any change be 
communicated to consumers in such instances is unnecessary and may 
create unnecessary confusion and consumer information overload.
X. Conclusion
    As many commenters to the CPSC's proposed rule requested, the CPSC 
should withdraw in its entirety this extra-statutory attempt to change 
40 years of successful voluntary recall practice. The proposed rule 
could dramatically alter the CPSC's existing process that enables 
product safety goals to be realized in a timely and generally efficient 
manner. While the Commission may believe that requiring binding 
voluntary recall plans and compliance programs via a separate rule is 
desirable, it has provided no data on the record to support these 
changes. Furthermore the Commission's existing statutory authority 
allows it to act to address any imminent public hazard when and if 
merited under particular circumstances. Recognizing that approaches to 
voluntarily implemented corrective action plans differ and require 
creative solutions, depending upon the particular circumstances, we 
would hope that due consideration based upon a preponderance of the 
evidence would be required before advancement of such rule, as 
currently drafted. Substantive rules (notwithstanding labeling as 
``interpretative'') may have unintended and adverse consequences on 
expedient voluntary corrective actions and should undergo more thorough 
administrative vetting prior to any imposition.

    Senator Moran. Mr. Locker, thank you very much.
    Mr. Gold?

          STATEMENT OF JONATHAN GOLD, VICE PRESIDENT,

                SUPPLY CHAIN AND CUSTOMS POLICY,

                   NATIONAL RETAIL FEDERATION

    Mr. Gold. Mr. Chairman, thank you very much for the 
opportunity to testify this morning.
    I would like to discuss three specific issues: the proposed 
Voluntary Recall Rule, the Retailer Reporting Program, and the 
Fast Track Recall Program.
    NRF is the world's largest retail trade association, 
representing all segments of the retail industry. We have had a 
proud history of engaging with the CPSC, particularly since the 
enactment of CPSIA. While we have had a number of issues with 
that law and its implementation and interpretation by the 
agency, we have always sought to positively interact with the 
CPSC with the viewpoint and objective of ensuring that the 
products our members sell are safe for American families.
    The retail community has spearheaded many product safety 
initiatives and efforts that go well beyond legal and 
regulatory requirements. By continuing to work in partnership 
with the CPSC, we can help focus on the issues of greatest 
concern while using the agency's limited resources to go after 
the truly bad actors.
    With this spirit of partnership and product safety in mind, 
it is with some hesitance that I testify today, questioning the 
manner in which the CPSC has approached the key issues of: 
Voluntary Recall Rule proposal, inaction to date on expanding 
and appropriately implementing the Retailer Reporting Program, 
and what has been generally observed to be a reduction in the 
agency's Fast Track Recall Program.
    I would observe and ask the Commission and this 
subcommittee to consider the fact that we have witnessed a 
somewhat concerning and increasingly prevalent trend at the 
CPSC to look first and last to retailers for responsibility 
under section 15 with regard to reporting and recall 
obligations. I would urge that this committee ask whether the 
CPSC is forgoing the tools provided under the law in favor of 
convenience.
    NRF and its members understand and embrace their 
obligations under the law, but others in the supply chain, 
especially product manufacturers, may have better and more 
immediate knowledge of the products and possible safety issues.
    With regard to the Voluntary Recall Rule, NRF submitted 
detailed public comments on the NPRM in February 2014. In those 
comments, we set forth in detail how we believe that the 
proposal could negatively impact the CPSC's critical safety 
mission by making it significantly more difficult for retailers 
and other recalling firms to undertake voluntary recalls 
jointly with the agency.
    The Subcommittee should observe that the CPSC does have the 
clear authority to seek to force a company to recall a product, 
should that become necessary, and the agency has exercised this 
power on occasion. However, the current Voluntary Recall Rule 
assumes, as it should, that the vast majority of companies 
fully cooperate with the CPSC in developing and undertaking 
product safety recalls.
    There may be some disagreement over things like the 
language of the recall press release or some other minor 
issues, but NRF members are strongly motivated to recall 
products as quickly as possible.
    Unfortunately, a number of provisions of the proposed rule, 
including one that would make corrective action plans legally 
binding, we believe would not only discourage companies from 
approaching the CPSC about a product safety issue that they 
have identified, but would make voluntary recall agreements 
much more legally risky for firms to undertake.
    This might lead to them being resistant to various requests 
the agency might make of them in the context of a recall. This 
could, therefore, not only reduce the number of necessary 
recalls, but it is also highly likely to unnecessarily drag out 
the recall process.
    Let me now discuss the Retailer Reporting Program. NRF 
fully supports this important program. It has resulted in a 
significant number of necessary recalls that might not 
otherwise have occurred. It also provides the agency with an 
excellent early warning system to identify and respond to new 
and emerging product safety hazards and patterns. It is the 
very model of a public-private partnership that is a win-win 
for the agency, companies, and consumers alike.
    We understand that the CPSC is actively reviewing the 
program and potential options for changing it, but, after 
several years of review, we are still waiting to hear when 
those changes might occur.
    We recently communicated with the commissioners, asking not 
only for that progress to move forward but, perhaps more 
importantly, calling into question the recent position that 
participation in the program does not and can never constitute 
compliance with a company's reporting obligations under section 
15(b) of the Consumer Product Safety Act.
    If, in fact, this is the position of the commission, then 
we not only question the factual accuracy of this but its legal 
and logical soundness. This has not been an issue in the 
program previously, and we wonder why it has now become an 
issue. This may dissuade potential participants from ever 
participating in the program.
    We would like to see the program opened to new participants 
and believe the agency should work with current participants on 
addressing any issues of concern or ways to enhance the program 
to benefit the agency, the participants, and consumers.
    Another great example of a program that has resulted in 
several hundred recalls, and much faster than they would have 
otherwise, is the Fast Track Recall Program, which encourages 
companies to undertake recalls within 20 days or less of 
initiating the process. In exchange, the CPSC does not make a 
preliminary determination for the product, which can have 
negative legal and other repercussions for recalling companies 
and is not necessary to initiate a recall of potentially 
dangerous products.
    Anecdotal reports continue to emerge that the agency is 
now, in various ways, disfavoring the Fast Track Program. This 
appears to in part be motivated by a desire to seek 
incriminating information about companies' potential failure to 
have met their 15(b) reporting obligations. While NRF certainly 
does not question the right and duty of the CPSC to 
appropriately investigate companies for this and other 
violations of the law, this should not come at the cost of 
fewer and slower product safety recalls.
    While we wanted to highlight a few of our concerns on these 
issues, NRF and its members again want to emphasize that the 
retail industry is continuously seeking ways to partner with 
the agency in order to improve the overall recall process. In 
this regard, we continue to believe that an advisory committee 
comprised of all stakeholders would benefit the agency and 
better enable it to address these and future issues.
    Thank you, Mr. Chairman. I look forward to your questions.
    [The prepared statement of Mr. Gold follows:]

 Prepared Statement of Jonathan Gold, Vice President, Supply Chain and 
               Customs Policy, National Retail Federation
    Mr. Chairman and distinguished Senators:

    Thank you for the opportunity to testify this morning on ``Consumer 
Product Safety and the Recall Process.'' I would like to discuss three 
specific issues now before the agency relating to this process: the 
proposed Voluntary Recall Rule, the Retailer Reporting Program and the 
Fast Track Recall Program.
    The National Retail Federation is the world's largest retail trade 
association, representing discount and department stores, home goods 
and specialty stores, Main Street merchants, grocers, wholesalers, 
chain restaurants and Internet retailers from the U.S. more than 45 
other countries. Retail is nation's largest private sector employer, 
supporting one in 4 U.S. jobs--over 42 million working Americans. NRF's 
This is Retail campaign highlights the industry's opportunities for 
life-long careers, how retailers strengthen communities, and the 
critical role that retail plays in driving innovation.
    NRF has also had a proud history of engaging with the Consumer 
Product Safety Commission, particularly since the enactment of the 
landmark Consumer Product Safety Improvement Act of 2008. While we have 
had a number of issues with that law and its implementation and 
interpretation by the agency, we have always sought to positively 
interact with the CPSC via the submission of numerous public comments, 
participation in working groups, roundtable discussions, and through 
other avenues. And we have always done this with the viewpoint and 
objective of ensuring that the products our members sell are safe for 
American families. Indeed, it has been the retail community that has 
spearheaded many product safety initiatives and efforts that go well 
beyond legal and regulatory requirements. By continuing to work in 
partnership with the CPSC we can help focus on the issues of greatest 
concern, while using the agency's limited resources to go after the 
truly bad actors.
    With this spirit of partnership and product safety in mind, it is 
with some hesitance that I testify today questioning the manner in 
which the CPSC has approached the key issues of the Voluntary Recall 
Rule proposal; inaction to date on expanding and appropriately 
implementing the Retailer Reporting Program; and what has been 
generally observed to be a reduction in the agency's Fast Track Recall 
Program.
    Also at the outset, Mr. Chairman, I would observe and ask the 
Commission and this Subcommittee to consider the fact that we have 
witnessed a somewhat concerning, and increasingly prevalent trend at 
the CPSC to look first, second and last to retailers for responsibility 
under Section 15 of the Consumer Product Safety Act with regard to 
reporting and recall obligations. This trend has gone largely 
unexamined by Congress, and I would urge that this committee ask 
whether the CPSC is forgoing the tools provided under the law in favor 
of convenience for the agency. NRF and its members understand and 
embrace their obligations under the law, but others in the supply 
chain, especially the manufacturers of the products, may have better 
and more immediate knowledge of the products and possible safety 
issues. Those companies should also be examined for their obligations 
under the law.
Proposed Voluntary Recall Rule
    With regard to the Voluntary Recall Rule, NRF submitted detailed 
public comments on the Notice of Proposed Rulemaking in February 2014. 
In those comments, we set forth in detail how we believe that the 
proposal as currently written could negatively impact the CPSC's 
critical safety mission by making it significantly more difficult for 
retailers and other recalling firms to undertake voluntary recalls 
jointly with the agency.
    The Subcommittee should observe that the CPSC does have the clear 
authority to seek to force a company to recall a product, should that 
become necessary, and the agency has exercised this power on occasion. 
However, the current voluntary recall rule assumes, as it should, that 
that the vast majority of companies fully cooperate with the CPSC in 
developing and undertaking product safety recalls. There may be some 
disagreement over things like the language of the recall press release 
and other, generally minor issues. But NRF members are strongly 
motivated to recall products as quickly as possible. Indeed, it is 
their best interest to do so.
    Unfortunately, a number of provisions of the proposed rule, notably 
including one that would make corrective action plans legally binding, 
we believe, would not only discourage companies from approaching the 
CPSC about a product safety issue that they have identified (and 
hundreds do approach the agency every year), but would make voluntary 
recall agreements much more legally ``risky'' for firms to undertake. 
This might lead to them being resistant to various requests the agency 
might make of them in the context of a recall. This could, therefore, 
not only reduce the number of necessary recalls (at least those 
conducted jointly with the CPSC), but it is also highly likely to 
unnecessarily drag-out the recall process. I will also note that there 
is no legal obligation in the first instance for a company wishing to 
undertake a recall to in fact do so with the CPSC (as long as the 
reporting obligation is met), so we could well see many more so-called 
``unilateral'' recalls, which may not be in the public's best interest.
Retailer Reporting Program
    Let me now discuss the Retailer Reporting Program. NRF fully 
supports this important program. It has resulted in a significant 
number of necessary recalls that might not otherwise have occurred. It 
also provides the agency with an excellent early warning system to 
identify and respond to new and emerging product safety hazards and 
patterns. Indeed, it is the very model of a government-private 
partnership program that is a win-win for the agency, companies and 
consumers alike. We understand that the CPSC is actively reviewing the 
program and potential options for changing it. But after several years 
of review, we are still waiting to hear when those changes might occur.
    We recently communicated with the Commissioners, asking not only 
for that progress to move forward but perhaps, more importantly, 
calling into question the position of the agency's General Counsel, 
without apparent explanation, that participation in the Retailer 
Reporting Program does not and can never constitute compliance with a 
company's reporting obligations under Section 15(b) of the Consumer 
Product Safety Act. If in fact this is the position of the General 
Counsel and the Commission as a whole, then we not only question the 
factual accuracy of that statement but its legal and logical soundness. 
This has not been an issue in the program previously and we wonder why 
it has now become one, and this may dissuade potential participants in 
the program from ever considering it in the future.
    We would like to see the program opened to new participants and 
believe the agency should work with current participants on addressing 
any issues of concern or ways to enhance the program to benefit 
consumers, the agency and the retail industry.
Fast Track Program
    Another great example of a program that has resulted in several 
hundred recalls, and much faster than they would have otherwise, is the 
Fast Track Program, which as you have heard encourages companies to 
undertake recalls within 20 days or less of initiating the process. In 
exchange, the CPSC does not make a ``preliminary determination'' for 
the product--essentially a finding that a product is in fact defective 
and that the defect poses a substantial product hazard. Such a finding 
can have negative legal and other repercussions for recalling companies 
and is not necessary to initiate a recall of potentially dangerous 
products.
    Unfortunately, anecdotal reports continue to emerge that the agency 
is now, in various ways, disfavoring the Fast Track Program. This 
appears in part to be motivated by a desire to seek incriminating 
information about companies' potential failure to have met their 15(b) 
reporting obligation. While NRF certainly does not question the right 
and duty of the CPSC to appropriately investigate companies for this 
and other violations of the law, in our view this should not come at 
the cost of fewer and slower product safety recalls.
    While we wanted to highlight a few of our concerns on these issues, 
NRF and its members again want to emphasize that the retail industry is 
continuously seeking ways to partner with the agency in order to 
improve the overall recall process, and we look forward to continuing 
to do so. And in this regard we continue to believe that an advisory 
committee comprised of all stakeholders would benefit the agency and 
better enable it to address these and future issues.
    Thank you again Mr. Chairman and Members of the Subcommittee. I 
would be happy to address any questions you have.

    Senator Moran. Mr. Gold, thank you.
    Ms. Falvey?

            STATEMENT OF CHERYL A. FALVEY, PARTNER,

         CROWELL & MORING LLP; FORMER GENERAL COUNSEL,

               CONSUMER PRODUCT SAFETY COMMISSION

    Ms. Falvey. Thank you, Chairman Moran, for the opportunity 
to address product safety, which has been a driving force in my 
career for almost 30 years.
    My written testimony really focuses on the law, because I 
served as a General Counsel of the Consumer Product Safety 
Commission from 2008 to 2012 when the CPSIA was being 
implemented. And, in particular, I was involved in supervising 
the Mandatory Recall Rule that was adopted during that time 
period.
    While my written testimony gets very detailed into the 
statute and the regulations, I thought I would take this 
opportunity to step out of that and make some higher-level 
points.
    We are at a really exciting time when it comes to product 
safety and harnessing big data, to use that to spot emerging 
hazards faster. More data in a data-driven world is what I 
heard the first panel talking about today. It enables the 
agency to pinpoint the problem in a global supply chain at the 
component or even factory level and then turn around and allow 
us to contact consumers who purchase the product directly.
    So technology and data can help with the whole gamut of 
issues that your hearing has covered today, from the timely 
identification of hazards to recall effectiveness.
    And with statutes and regulations that were written years 
before the technology advances that will take us into this new 
era of product safety, it is important that we step back and 
make sure that with each regulatory move we are positioning 
ourselves to take advantage of that technology to make 
consumers safer and businesses more efficient.
    At the end of the day, the regulated community, the 
manufacturers and retailers, are in business to serve and 
retain customers. And offering safe and compliant products is 
of paramount importance in the pursuit of those goals. Safety 
is nonpartisan, and it is good business.
    So the entire statutory scheme depends on the engagement of 
the regulated community in monitoring their products to ensure 
the timely and accurate self-reporting to the agency of 
potential serious issues. The lessons of product safety right 
now, whether it is cars, food, or consumer products, it demands 
early and transparent engagement with the Commissioner and the 
Commission and identification of the hazards in a fast way.
    And both the Fast Track Program and the Retailer Reporting 
Program that we have been talking about today enable the 
regulated community to work closely with the agency to meet 
those goals. CPSC thrives on remedying hazards fast and getting 
consumers protected early. And that is really what the Fast 
Track Program was all about.
    Most of the participants comply with the regulations and 
their requirements, and the Commission has options beyond the 
voluntary corrective action plan if they do not. They can 
impose a legally binding consent order in a voluntary 
settlement by regulations. The regulations explain how to do 
that and to do that when there is a lack of full confidence 
that the company will comply with the corrective action plan. 
And they give criteria as to when the staff should use the 
voluntary process versus the consent decree process.
    I will spend a minute on the issue with regard to the 
Retailer Reporting Program. It is used by the participants as 
part of their overall corporate compliance program. They are 
investing significant resources in creating data that is 
scalable, unified, and usable for the commission. They work 
closely with the staff to develop the search terms and to limit 
their reports to the matters that really are the heart of the 
reporting obligation under section 15(b).
    The collection and use of that data across retailers with 
robust sharing will enable the CPSC to aggregate that data. And 
as the import process becomes more regulated by technology, as 
well, the potential exists to link the retail information with 
the information that we are getting at the ports and use that 
technology to look at the entire lifecycle of a product.
    And while that may be an aspirational goal for the agency 
and may require additional funds and certainly notice and 
comment rulemaking, the use of that really might get at the 
return on investment the agency is looking for and help 
modernize how the Commission spots emerging hazards and stops 
those products at the ports rather than focusing on the store 
shelves, which is a theme that was coming as we went through 
the Consumer Product Safety Improvement Act.
    Thank you very much, and I am happy to answer questions.
    [The prepared statement of Ms. Falvey follows:]

Prepared Statement of Cheryl A. Falvey, Partner, Crowell & Moring LLP; 
       former General Counsel, Consumer Product Safety Commission
    Chairman Moran, Ranking Member Blumenthal, distinguished members of 
the Subcommittee, thank you for the opportunity to appear before you 
today to discuss product safety and the recall process at the U.S. 
Consumer Product Safety Commission (CPSC) in connection with your 
oversight hearing. I am honored to speak on product safety, an issue 
that has been a passion and driving force throughout my career. I am 
attorney in private practice here in the District of Columbia and 
served as the general counsel of the CPSC from 2008 to 2012 during the 
implementation of the Consumer Product Safety Improvement Act (CPSIA). 
During my time at the CPSC, I supervised the development of the 
mandatory recall rule required by Congress to be promulgated as part of 
the CPSIA. I also supervised the lawyers serving the Office of 
Compliance and Field Investigations in handling hundreds of recalls a 
year and addressing emerging risks and recall effectiveness.
I. Voluntary Recall Statutory and Regulatory Framework
    The CPSC operates under a statutory scheme that depends upon 
reporting by manufacturers, distributors and retailers. CPSC is not a 
preapproval agency. Its authorizing statute, the Consumer Product 
Safety Act, requires that manufacturers, distributors and retailers 
report both violations of the statute and regulatory requirements as 
well as defects that present a substantial product hazard or 
unreasonable risk of serious injury or death. The entire statutory 
construct depends on an engaged regulated community that monitors 
products to ensure timely and accurate self-reporting to the agency.
    Determining whether a product has a defect that presents a 
substantial product hazard can be a very time consuming and difficult 
process. It depends on whether the product exhibits a pattern of 
defect, the number of defective products distributed in commerce, 
severity of the risk, likelihood of injury among other things. The 
challenge of determining whether a safety risk exists can be 
particularly difficult for a retailer or distributor that is not as 
close to the design and development of the product as the manufacturer.
    Nearly all recalls conducted with the CPSC are voluntary, with most 
firms agreeing to cooperate with the Commission to recall and address 
potential product hazards. Indeed, under Democrat Ann Brown's 
chairmanship of the CPSC in 1995, the Commission streamlined the 
process for voluntary engagement on recalls with the CPSC by announcing 
the Fast Track recall process. As former Chairman Brown explained in a 
letter to the United States House of Representatives in May of 2014, 
the CPSC's engineering review of whether a product contained a defect 
that created a substantial product hazard could take months to perform 
monopolizing critical agency resources. Streamlining the program to 
allow for manufacturers, distributors and retailers to conduct 
voluntary recalls without a CPSC engineering determination allows for 
consumers to get a remedy faster--whether a refund, repair, or enhanced 
instructional information. The CPSC's Fast Track program did just that 
and won an innovation in government award. The twenty (20) day process 
for negotiating a recall under the Fast Track program provides 
incentives to companies to cooperate with the government without fear 
of an adverse determination regarding the safety of their product.
II. The Voluntary Recall Rule
    As originally described on the Commission regulatory agenda, the 
proposed voluntary recall rule would have taken the requirements for 
mandatory recall notices, a rule promulgated as required by Congress in 
the CPSIA, and expanded those requirements to voluntary recall notices. 
The CPSC has individually negotiated voluntary recalls for over 30 
years and, in doing so, has built trust with firms and created common 
practices that have been incorporated into the mandatory recall notices 
rule. Similar guidance has already been provided by the Commission in 
its comprehensive Recall Handbook.
    The proposed rule was amended during the Commission's deliberations 
to eliminate the option to engage in a voluntary recall without 
entering into a legally binding agreement. It would also allow the 
Commission to impose compliance program requirements on a firm seeking 
a voluntary recall as part of a now legally binding corrective action 
plan governing the conduct of the recall. I will address each of those 
issues.
A. Legally Binding Corrective Action Plans
    Under the current regulations, voluntary corrective action plans 
expressly are not legally binding. 16 CFR Sec. 1115.20(a). The 
Commission has preserved the option to impose a legally binding consent 
order in voluntary settlement with the CPSC. 16 CFR Sec. 1115.20(b). 
The original voluntary recall rule promulgated in 1975 distinguished 
between the voluntary, non-binding corrective action plan and the 
binding consent agreement, explaining that the consent agreement should 
only be used where there was ``a lack of full confidence that the 
company would comply with a non-binding Corrective Action Plan'' based 
on the staff's prior experience with the firm. 40 Fed. Reg. 30,938 
(July 24, 1975). The non-binding corrective action plan was established 
specifically ``as an expeditious means of protecting the public from a 
substantial product hazard,'' in contrast to having to take time to go 
through the process of securing a consent order. Id. at 30,937; see 16 
CFR Sec. 1115.20(b). The regulations were revised in 1977 to include 
criteria for the staff to use in determining whether it is appropriate 
to pursue a non-binding corrective action plan or consent agreement. 42 
Fed. Reg. 46,721 (Sept. 16, 1977); see 16 CFR Sec. 115.20(a)(2).
    During my tenure as the general counsel, in 2010, the CPSC went 
even further to exercise its power to seek a legally binding corrective 
action in a court ordered consent decree where a firm repeatedly failed 
to engage voluntarily to come into compliance with its statutory and 
regulatory obligations. The consent decree ordered a mandatory 
compliance program to be established, including independent oversight 
by a ``Product Safety Coordinator'' approved by the CPSC to monitor for 
product safety violations and compliance with reporting obligations.
    Thus, the Commission has an array of options at its disposal to use 
with firms depending on the circumstances. The Commission's proposal to 
make all voluntary corrective action plans legally binding would 
represent a clear and dramatic turnabout: ``once a firm voluntarily 
agrees to undertake a corrective action plan, the firm is legally bound 
to fulfill the terms of the agreement.'' 78 Fed. Reg. 69, 795, 69, 799. 
This change addresses concerns about ``recalcitrant firm[s]'' that 
``have deliberately and unnecessarily delayed the timely implementation 
of the provisions of their corrective action plans.'' 78 Fed. Reg. 69, 
795. The CPSC already has a consent decree option to address 
recalcitrant firms making this change unnecessary.
B. Negotiating Compliance Program Terms in the Context of a Voluntary 
        Recall
    The voluntary recall rule proposal also subjects any firm engaging 
with the CPSC to the prospect of a legally mandated compliance program 
being imposed upon them during the course of a voluntary recall. The 
consequences of this proposal include:

   Imposing potentially significant delay in the voluntary 
        recall process so that terms can be negotiated, vetted, and 
        finalized, thereby gutting the streamlining benefits of the 
        Fast Track program;

   Shifting CPSC resources away from getting unsafe products 
        out of the hands of consumers toward negotiating and enforcing 
        corrective action plan agreements; and

   Causing firms to reevaluate their cooperation with the 
        Commission given----

     the potential for future litigation with the CPSC over 
            enforcement of corrective action agreements;

     the need for publicly traded companies to approve the 
            terms of a binding agreement and ensure compliance with 
            such an agreement to meet duties owned to their 
            shareholders; and

     the effect corrective action plan agreements might 
            have if introduced as evidence in product liability 
            litigation.

    To encumber the voluntary recall process with the negotiation of 
such compliance program terms would undermine the expedience of the 
Fast Track program. As Ann Brown stated in her May 2015 letter, this 
has the potential to delay ``an otherwise effective recall weeks or 
even months due to haggling over legalities.'' The CPSC has 
acknowledged the same from the start, stating in the preamble to its 
reporting rule, ``[b]y offering and accepting a corrective action plan, 
the subject firm and the Commission save considerable time and effort 
that would otherwise be devoted to negotiating the more complex details 
of and completing the paperwork necessary for a consent order 
agreement. As a result, the hazard is remedied faster, and the consumer 
is protected earlier.'' 43 Fed. Reg 34988, 34996 (August 7, 1978) 
(emphasis added). The CPSC went on to note that most firms comply with 
the corrective action plan and ``for those few subject firms which do 
not'' the Commission has the options of pursuing a consent decree or 
adjudicative action. Id. The same remains true today.
    The binding corrective action plan proposed in the voluntary recall 
rule may prove tantamount to extracting a consent decree without 
jumping through the protections and formalities built into the consent 
decree process. For example, Commission staff would no longer have to 
provide the firm with a draft complaint outlining its case. See 16 CFR 
Sec. 1115.20(b). There would be no requirement that the corrective 
action plan be published in the Federal Register for comment or that 
the Commission formally consider any objections it received. Id. at 
Sec. 1115.20(b)(4), (5). The CPSC would not settle its charges against 
the firm, which is mandatory for a consent order. Id. at 
Sec. 1115.20(b)(1)(iii).
    While there is certainly a time and place for imposing compliance 
program terms, the consent decree process already allows for such 
negotiation by the CPSC, and is the more appropriate place for that to 
occur. Without describing the legal authority for imposing compliance 
terms outside a consent decree process, the voluntary recall rule 
proposal describes that imposing a compliance program may be 
appropriate where there have been ``[m]ultiple previous recalls,'' a 
failure to timely report under Section 15(b), or actual ``[e]vidence of 
insufficient or ineffectual procedures and controls . . .,'' though is 
clear that ``[t]he Commission always retains broad discretion to seek a 
voluntary compliance program agreement.'' One of the issues with this 
formulation is that the number of voluntary recalls is not necessarily 
indicative of a need for a compliance program. There is a not-so-subtle 
implication that recalls reflect a failure in the existing corporate 
compliance program when in fact the recall evidences the success of a 
compliance program that works exactly as it should--one designed to 
catch and act upon product issues before they become a problem.
III. The Retailer Reporting Program
    Through the retailer reporting program, firms have voluntarily 
engaged in the very compliance activities the Commission seeks to 
impose in the voluntary recall rule. The uncertainty as to the status 
of the retailer reporting program and how it relates to the current 
expectations of the CPSC with regard to reporting merits examination.
    The retailer reporting program is used by many of the participants 
as part of their overall corporate compliance program to identify 
emerging risks and ensure regulatory compliance. The program 
unquestionably serves the interest of the health and safety of the 
consumer by promoting transparent data sharing and analysis as well as 
early engagement with the CPSC. Program participants work with the CPSC 
to share safety related complaint information, using established 
trigger words to triage and escalate those complaints likely to raise 
safety concerns. Routine reporting through the program encourages 
frequent engagement with the CPSC on safety related concerns and 
ensures timely notification of potential defects.
    The retailer reporting program follows CPSC policy encouraging that 
subject firms not delay reporting in order to determine to a certainty 
the existence of a reportable noncompliance, defect or unreasonable 
risk and the CPSC's statements that an ``obligation to report may arise 
when a subject firm receives the first information regarding a 
potential hazard, noncompliance or risk.'' 57 Fed. Reg. 34222. It also 
meets the CPSC's guidance to err on the side of over-reporting and when 
in doubt, to report. 49 Fed. Reg. 13820 (April 6, 1984).
    Program participants have worked closely with the CPSC staff to 
develop search terms and processes to limit their reports to those 
complaints that may reflect potential hazards and defects. They devote 
substantial resources to collecting and sharing the data with the CPSC 
in a format compatible with the CPSC's data requirements. The CPSC 
benefits from obtaining this data from the retailers in a scalable, 
unified and usable format based upon agreed upon search terms. The 
Commission has always made reporting easier for a ``retailer of a 
product who is neither a manufacturer or importer of that product, and 
their reporting obligation is somewhat more streamlined than the 
expectation for a manufacturer or importer. 16 CFR Sec. 1115.13 (b), 
see, e.g., 49 Fed. Reg. 13820. This is because retailers tend to less 
knowledge of design and manufacturing issues. Yet they can have more 
visibility into consumer feedback and complaints with the product after 
sale.
    With robust data sharing from all retailers, the CPSC would be in a 
position to aggregate data across retailers to spot emerging trends. 
The collection and use of this data is consistent with today's focus on 
a more proactive safety system. As the import process becomes more 
automated in the coming years, the potential exists for retail 
complaint data about a product to be linked to import data providing 
the agency the opportunity to use technology as a window into the 
entire product lifecycle here in the United States. While perhaps still 
an aspirational goal for the agency (and certainly requiring notice and 
comment to provide for due process protections), the use of the data in 
this way could help modernize how the CPSC spots emerging hazards and 
stops hazardous products at the ports.
    I hope these comments on product safety and the recall process have 
been useful. Thank you again for the opportunity to testify today, and 
I will be happy to answer any questions.

    Senator Moran. Thank you. Thank you for sharing your 
expertise.
    Ms. Cowles?

   STATEMENT OF NANCY A. COWLES, EXECUTIVE DIRECTOR, KIDS IN 
                          DANGER (KID)

    Ms. Cowles. Thank you. Thank you, Chairman Moran, for 
allowing us to testify here today.
    KID, as you may know, is a nonprofit organization. We were 
founded in 1998 by two University of Chicago professors whose 
son, Danny, was killed in a recalled portable crib at 
childcare.
    Today, I will review the KID research that we have already 
heard a little bit about on children's product recalls and 
address a voluntary recall rule proposed by CPSC, product 
registrations, and steps we can all take to make recalls more 
effective.
    Stronger standards, port surveillance, testing 
requirements, and tools like saferproducts.gov have reduced 
recalls. We now need to address the gap between recalling a 
product and getting it out of consumers' homes.
    In February, KID released a report on children's product 
recalls. The findings are promising for safety. Injuries 
reported from products prior to recall was the lowest in over a 
decade. Looking at the 10 years of data, we can see that when a 
strong standard is adopted, such as those required by Danny's 
Law, recalls of that product class decline.
    Eighty-nine percent of young parents are on social media, 
yet our research found that only 23 percent of the companies 
who are on Facebook used Facebook for posting on their recalls.
    We also looked at the monthly corrective action report 
data. It shows products that were with the manufacturers, 
distributors, or retailers were retrieved, but only 4 percent 
of recalled products already in consumer hands were accounted 
for.
    This summer, because of our concern over the millions of 
recalled products still out in homes and childcare, we began a 
research project with the Illinois Institute of Technology's 
Institute of Design. Graduate students conducted extensive 
interviews with stakeholders, qualitative research with 
parents, and literature review on the topic and are building a 
knowledge base that will be used to create an action plan to 
improve recall outcomes. We look forward to updating you on the 
results of that research later this year.
    KID supports the provisions of the CPSC proposed rule to 
set forth principles and guidelines for corrective action plans 
and believe it will improve recall effectiveness. The CPSC's 
main tool to protect consumers is the corrective action plan or 
recall.
    As our research has shown, the majority of recalled 
products remain unaccounted for, and some cause death and 
injury years later, like the crib that killed Danny. So it 
makes sense to establish a set of minimum requirements for 
voluntary recalls, allowing CPSC to use its years of experience 
in developing corrective action plans to make them more 
effective. It will eliminate delays that currently occur when 
details that should not be negotiable take time to negotiate 
and will allow the CPSC and recalling firms to use tools such 
as social media more effectively.
    I found it surprising that companies routinely sign 
agreements with a government agency that they are then not held 
responsible for fulfilling. Companies should be subject to a 
binding agreement when they agree to a compliance plan.
    Too often, a lack of internal controls or systems leads to 
potentially unsafe products that must be recalled. Especially 
in cases of repeat offenders, we support the implementation of 
an effective compliance program in the corrective action plan.
    We support the voluntary recall notice principles. In fact, 
we recommend that CPSC consider broadening its own use of 
social media to convey recall notices. Consumers trust and 
respect the Consumer Product Safety Commission, and its notice 
postings on Twitter are shared widely. Similar action on 
Facebook and other social media sites would increase the 
likelihood a consumer will learn of a recall and take action.
    The CPSIA requires that infant and toddler durable products 
include a product registration card in their packaging and a 
means to register online. This allows manufacturers to contact 
consumers directly when there is a recall. What we need now is 
some reporting on how this is working. Companies should be 
encouraged to share results so CPSC and others can work to make 
the system stronger.
    It is not enough to do a recall if the product remains in 
consumer homes. We do not stop looking for mines in a minefield 
simply because no one has stepped on it yet. We keeping looking 
to avoid that next mine going off. The same should be true of 
recalls.
    We recommend that Congress request from CPSC an annual 
report of the same monthly report number that we use in our 
report. We believe that the sunshine that that will shine on 
this problem of recall effectiveness will, by itself, improve 
recall efforts.
    The best way to reach owners of recalled products is to do 
direct notification, assisted by product registration, social 
media, and reverse marketing. To echo Chairman Kaye, these 
companies know exactly how to reach consumers when they are 
selling a product. They should use those same means to get 
those unsafe products out of their homes.
    I did run out of time, but I had one more thing I want in 
the record, and that is that the Cubs won last night.
    [Laughter.]
    [The prepared statement of Ms. Cowles follows:]

      Prepared Statement of Nancy A. Cowles, Executive Director, 
                          Kids In Danger (KID)
    Thank you, Chairman Moran, Ranking Member Blumenthal and 
Subcommittee members for this opportunity to testify before you today 
regarding the Consumer Product Safety Commission and recall 
effectiveness.
    KID is a nonprofit organization dedicated to protecting children by 
improving children's product safety. The organization was founded in 
1998 by Linda Ginzel and Boaz Keysar, after the death of their son 
Danny Keysar in a recalled portable crib at a licensed child care home. 
A portion of the Consumer Product Safety Improvement Act (CPSIA) is 
named after Danny. As Danny's mother said when she testified before a 
House Subcommittee more than a decade ago, ``improved children's 
product safety will be Danny's legacy.''
    Today's hearing is on consumer product safety and the recall 
process. I will review research conducted by KID on children's product 
recalls over the last decade. This research addresses not only the 
types of products recalled, but also the participation rate and the 
efforts made by companies to reach consumers. I will address the 
voluntary recall and corrective action rule proposed by CPSC and 
product registration. I will also talk about steps we can all take to 
make recalls more effective.
    As I mentioned, a dangerous crib that had been recalled five years 
before his death killed Danny. He was the fifth child to die in that 
particular product--the PlaySkool Travel-Lite Crib--another died a few 
months later. There were fewer than 12,000 of these cribs in 
circulation. However, the company sold their patent for the deadly 
rotating side rail to four other companies. One million five hundred 
thousand portable cribs were made with that deadly design. About 1.2 
million of them remain unaccounted for. There have been 19 deaths in 
total, the most recent we are aware of took place in 2007. The toll of 
recalled products left in homes and childcare facilities is too high 
for our families to bear.
    From the beginning, KID worked to reach parents with information 
about recalls. No one in the licensed home where Danny spent his days 
had heard of the recall--not even the state inspector who visited the 
facility just days before Danny's death. Recalled products don't look 
dangerous or broken. It isn't until the rail rotates unexpectedly under 
the weight of a waking child standing up and collapses around his neck 
that the flaw becomes apparent--at least to parents and caregivers. So 
KID began by focusing on how to reach those using the products with the 
recall news. But new products were recalled all the time. We realized 
the danger in the crib wasn't that it was recalled, but that it was 
unsafe from the day it was made. Therefore, KID spent many years 
working to improve children's product safety, making recalls less 
common.
    Stronger standards, port surveillance and testing requirements have 
reduced recalls and improved safety. We now need to keep strengthening 
that safety net and address the gap between recalling a product and 
getting it out of our homes.
KID's Research on Children's Product Recalls
    In February, KID released A Decade of Data: An In-depth Look at 
2014 and a Ten-Year Retrospective on Children's Product Recalls.\1\ The 
report reviews recall data from the U.S. Consumer Product Safety 
Commission (CPSC) for 2014 as well as previous years. The findings are 
promising for safety. Children's product recalls were only 25 percent 
of the recalls issued by CPSC--down from a high of well over half the 
recalls. Injuries reported from products prior to recall was the lowest 
since we started studying recall rates in 2001. Seventy-five children's 
products were recalled in 2014--so about 1.5 children's product recalls 
a week--down from three a week some past years. When we looked at 10 
years of data, we saw that when a strong standard is adopted, such as 
those required by Danny's Law, recalls of that product class decline--
keeping us all safer.
---------------------------------------------------------------------------
    \1\ http://www.kidsindanger.org/docs/research/
2015_KID_Recall_Report.pdf
---------------------------------------------------------------------------
    However, there were still 17 million individual children's products 
recalled in 2014. In addition, our research shows most of those are 
likely to remain in consumer hands without fixing the hazard or 
replacing it with a safer product.
    In addition to looking at the recalls, we looked at what we could 
see publically about company activity to spread the word to consumers. 
Because of Illinois law and CPSC urging, most companies now post 
recalls on their websites. A consumer who was aware of the recall can 
usually easily find the information on line and participate. However, 
not many people spend their days scanning child product websites to see 
if there is a new recall. After direct notification--e-mail, texts, 
mail or phone calls, social media is the best way to reach directly to 
consumers.
    It is very likely that many followers of companies on Facebook and 
Twitter have purchased a product from the company--which is why it is a 
great resource for getting the news out. According to Dana Points, 
editor-in-chief of Parent's Magazine, 89 percent of young mothers are 
on social media. Yet, our research found that for children's products 
recalled in 2014, 76 percent of companies had a Facebook account but 
only 13 (23 percent of those with an account) used it for posting a 
recall notice. Forty-nine percent of companies had a Twitter account 
and 32 percent of those used it to post a recall notice (12). There is 
a lot of room for growth here.
    Then, with the perspective a year gives, we looked at the available 
data on how successful recalls are. You would be surprised how hard 
this information is to find. We requested, through the Freedom of 
Information Act, the monthly corrective action reports required for 
corrective action plans or recalls. First, let me say that we did not 
get information on 40 percent of the 2013 children's product recalls. 
Either manufacturers had not filed the forms, CPSC could not find the 
files where they should be or companies did not follow up on the FOIA 
request and KID does not have the budget to sue them to comply. 
Therefore, our database is 61 Monthly Progress Reports for Corrective 
Action Plans and Incident Updates.
    Products that were with the manufacturer, their distributors or 
retailers at the time of recall are likely to be accounted for in most 
cases. But for those with consumers? Only 4 percent of them were 
accounted for through this reporting. Some recalls were more successful 
than others were and some of the forms were completed with 
mathematically impossible numbers--fixing more products than were made 
for instance. Nevertheless, even if this number is lower than the 
actual, it still shows a dismal problem.
    KID has done other research in this area. We did focus group 
research with parents, grandparents and childcare providers. All wanted 
recall information that was easy to understand and invited action. In 
particular, they were looking first for a brand and product name with a 
picture to answer the question--do I have this product? If yes, they 
want to know specifics they can check--model number, years sold and 
where it was sold to confirm they have the recalled item and then why 
it is being recalled and what action is expected. They expect companies 
to find them to alert them.
    In addition, this summer, because of our concern over the millions 
of recalled products still out in homes and childcare, we began a 
research project with the Illinois Institute of Technology's Institute 
of Design. Graduate students in design theory conducted extensive 
interviews with stakeholders, qualitative research with parents and 
literature review on the topic and are building a knowledge base that 
will be used to create an action plan for all stakeholders to improve 
recall outcomes. We look forward to updating you on the results of that 
research later this year.
Voluntary Recall Notices and Corrective Action Plans
    In late 2013, the U.S. Consumer Product Safety Commission proposed 
an interpretive rule to set forth principles and guidelines for the 
content and form of voluntary recall notices that firms provide as part 
of corrective action plans under Section 15 of the Consumer Product 
Safety Act (CPSA). It has not been adopted. The rule is similar to what 
is required for mandatory recalls in CPSIA. The existing regulations 
provide for notice to the public of the corrective action that a firm 
agrees to undertake, but do not provide any guidance regarding the 
information that should be included in a recall notice issued as part 
of a corrective action plan agreement.
    The proposed rule would set forth the Commission's expectations for 
voluntary remedial actions and recall notices, bearing in mind that 
certain elements of product recalls vary and that each notice should be 
tailored appropriately. The proposed rule also provides that corrective 
action plans may include compliance program-related requirements when 
appropriate. In addition, the proposed rule would make the corrective 
action plan agreed to by CPSC and the recalling party legally binding. 
KID supports the provisions of this proposed rule and believe it will 
help to get information out to consumers.
    The CPSC's main tool to protect consumers is the corrective action 
plan or recall. It is through these efforts that unsafe products are 
identified to the public with the goal of repairing, replacing, or 
removing them from use to avoid the hazard posed by the product. As our 
research has shown, the majority of recalled products remain 
unaccounted for with most of the products presumably still in use. 
Unlike food recalls, where the product has often been consumed prior to 
the recall, consumer products remain in use for years after a recall, 
as deaths \2\ in a decades-old hope chest that was recalled \3\ in 1996 
illustrate. Or the 2007 death of a little boy in a crib of the same 
design that killed Danny Keysar in 1998 and was recalled 11 years 
earlier. More information presented clearly to consumers at the time of 
the recall, additional ways to deliver recall information, and a 
legally binding corrective action plan would reduce the number of 
dangerous products that remain in consumer hands after recall.
---------------------------------------------------------------------------
    \2\ http://www.nbcnews.com/health/child-deaths-are-tragic-reminder-
products-pose-risk-long-after-2D11939815.
    \3\ http://www.cpsc.gov/en/Recalls/1996/CPSC-The-Lane-Furniture-
Company-Announce-Recall-for-In-Home-Replacement-of-Locks-on-Cedar-
Chests/
---------------------------------------------------------------------------
    It makes sense to establish a set of minimum requirements for 
voluntary recalls, just as the CPSIA did for mandatory recalls. This 
would allow the CPSC to use its years of experience in developing 
corrective action plans to make them more effective. It will eliminate 
delays that currently occur when details that should not be negotiable 
take days, weeks, or months to negotiate, and will allow the CPSC and 
recalling firms to more effectively use new tools such as social media 
to reach consumers.
    KID supports efforts to make corrective action plans legally 
binding. In fact, I found it surprising to learn that companies 
routinely sign agreements with a government agency that they are not 
held responsible for fulfilling. These plans are negotiated and agreed 
to by the recalling company, but without legally binding language, 
there is no pressure on recalcitrant companies to comply fully. Just as 
consumers are subject to binding contracts when they purchase products 
and services such as credit cards and Internet service, companies 
should be subject to a binding agreement when they agree to a 
compliance plan regarding a recalled product.
    Without meaningful enforcement authority, the CPSC has been limited 
in the ways that it can remove dangerous products from the market and 
from use by consumers. Making corrective action plans legally binding 
allows the CPSC to take action, as necessary, more promptly and without 
additional expense, to see that the plan is actually implemented.
    CPSC's has preferred remedies--refunds, replacements or repairs. 
The proposed rule would require companies that propose different 
remedies to show that those other remedies will be equally successful. 
We believe only refunds or replacements should be options in corrective 
action plans involving products that have caused death or severe 
injury. Leaving it in consumers' hands to repair a faulty, deadly 
product can often lead to delayed or poor repairs and additional 
injuries, as we saw with immobilization kits for drop-side cribs. In 
addition, the CPSC's sanctioned repairs should not leave consumers with 
products that don't comply with current safety standards. Such products 
could pose risks to consumers. In those instances, replacement or 
refund is a more appropriate remedy.
    Too often, a lack of internal controls or systems leads to a 
potentially unsafe product that must be recalled. By announcing the 
recall without fixing the problem that led to it, additional problems 
with other products may follow. Especially in cases of repeat 
offenders, for those companies with multiple recalls, we support the 
implementation of an effective compliance program in the corrective 
action plan.
    KID supports the Voluntary Recall Notice Principles, which echo 
Section 16 CFR 1115.26 for mandatory recalls. In particular, we support 
web page posting--viewable when first landing on the page and 
additional means such as social media. We would also recommend that the 
CPSC consider broadening its own use of social media to convey recall 
notices. Consumers trust and respect the CPSC, and its notice postings 
on Twitter are usually shared widely. Similar action on Facebook and 
other social media sites would increase the likelihood a consumer will 
learn of a recall and take action. Such social media use to improve 
consumer awareness of safety recalls is not, in our view, in any way 
legally limited by Section 6(b) of the CPSA, since it includes only 
publically available information. CPSC can put additional controls on 
its Facebook page, as many nonprofits and other entities do, to 
restrict postings from others there.
    The proposed changes also covered the actual recall notice. These 
notices should be written and disseminated in such a way that consumers 
will be motivated to take action and that other entities such as the 
media, nonprofit organizations, retailers and local community officials 
will be motivated to share in the dissemination of the information. 
These changes will enhance the ability of consumers to quickly and 
effectively gather pertinent information from recall notices to 
ascertain: whether they have the product in question; what the safety 
risk is; how severe the risk is; and what they should do. In 2013, KID 
conducted focus group research with parents, childcare providers, and 
grandparents. The research showed that being able to make these 
determinations quickly is an important factor in how likely someone is 
to take the information seriously and take actions to remove the 
product from their home.
    KID strongly supports the proposed rule and guidelines. These 
actions will strengthen recall effectiveness and will enable the use of 
additional resources to communicate the vital safety information in 
recall notices to the consumers using the products.
Product Registration for Juvenile Products
    The CPSIA also requires that infant and toddler durable products, 
such as cribs, strollers and high chairs, include a product 
registration card in their packaging and provide an opportunity to 
register online. This gives manufacturers the information necessary to 
directly contact consumers in the event of a recall or other product 
safety issue. Too many consumers never hear about a recall of a product 
that they have in their home and as a result continue to use recalled 
products. Today, most manufacturers have both online registration sites 
and include the cards. KID has evaluated 157 manufacturer websites and 
found that almost all have online sites that consumers can use to 
register infant durable products. What we need now is some reporting on 
how this is working. What percentage of products are registered? Does 
it improve recall participation? What is being done to encourage 
consumers to participate? Companies should be encouraged to share 
results so CPSC and others can work to make the system stronger. Again, 
from her testimony in 2004, Linda Ginzel stated that she firmly 
believes that her beloved son Danny would be alive today if the 
Playskool Travel Lite had come with this simple registration card.
Conclusion
    CPSC is a very different agency from the 1998 agency that struggled 
to get the word out on recalls using limited tools and funds. CPSC 
staff uses all the tools at their disposal to work with companies and 
consumer groups to get dangerous products off store shelves, off online 
sites and out of our homes and childcare. However, with abysmal recall 
participation rates, more must be done.
    It is not enough to do a recall if the product remains in homes and 
in use. We do not stop looking for mines in a minefield because no one 
has stepped on it yet. We keep looking to avoid that next mine going 
off. The same should be true of recalls. We need to set goals for 
successful recalls and require additional action if the number reached 
stay below that goal.
    Sometimes a little sunshine helps move progress along. What if 
Congress requested an annual report from CPSC of those same monthly 
report numbers KID uses in our report? We believe the light that sheds 
on recalls would improve the record keeping and the recall efforts. 
CPSC has the information--it is a low cost effort to help ensure once 
companies have recalled a product it does not remain in use.
    We believe the best way to reach owners of recalled products is to 
do direct notification, assisted by product registration, social media 
and reverse marketing in cases where it is warranted. These companies 
know exactly how to reach consumers to sell products. They should use 
those same methods to reach consumers to remove dangerous products from 
their homes. A recall announcement should not be the end of the 
responsibility of the company.
    We can all do our part to educate parents and caregivers on recalls 
and the importance to stay informed and take action. However, the CPSC 
and companies must take the first steps to improve the chances a 
consumer will learn of a recall on their product and will be willing to 
take action.

    Senator Moran. We will allow that to be stated as long as 
we can at least talk about the Royals, as well.
    [Laughter.]
    Senator Moran. Thank you all very much for your testimony.
    Ms. Cowles, let me start with you. I want to give you a 
chance to tell me--because you are the one at the table, I 
think, that supports the Voluntary Recall Rule, and I want to 
explore that with you.
    Tell me about the Fast Track Program. Do you think it is 
not working? Working?
    Ms. Cowles. Well, the Fast Track Program, like much at 
CPSC, is secret from those of us on the outside. So I can't----
    Senator Moran. You don't have--all right.
    Ms. Cowles. I have no information. But I would say that, if 
it is as stated here, you know, that it allows companies to 
come ready to do a recall when they find a defect in their 
product, I don't think there is anything in this rule that 
would stop them from doing that.
    Senator Moran. And do you agree with everything in the rule 
or just parts of it?
    Ms. Cowles. What I agree with are efforts by the Consumer 
Product Safety Commission to improve the abysmal rates that we 
are seeing on recall effectiveness. I think, for instance, 
again, things like using social media, putting the recall on 
the front of your website so that people can see it, telling 
consumers there is a defect.
    I mean, we heard a lot about that that is going to delay. 
``If we have to say there is a problem with our product, we 
don't want to do that.'' That is going to drive down recalls. 
If you tell consumers, ``We are recalling this, but we don't 
think anything is wrong with it,'' you are not going to get 
consumers to take that out of their home.
    So I agree with Chairman Kaye that we can still talk about 
how the final rule looks, but to say that, for every single 
time a company comes forward with a recall, CPSC has to 
renegotiate are they going to put it on social media, what is 
every word that is going into the recall notice--that those 
things are negotiated over and over every single time.
    And the thought that, you know, this would bring more 
lawyers in. I am not sure how many recalls Cheryl addressed at 
the Commission where there was not a lawyer on the other side.
    So we hear a lot of doom and gloom when consumer 
protections are being talked about. And like with 
safeproducts.gov, like with parts of the CPSIA, in the long 
run, when those problems are worked out, we end up not seeing 
what has been predicted.
    Senator Moran. Thank you.
    Let me use something you said to expand the conversation to 
the rest of the panel.
    Tell me about your relationship, interaction, ability to 
present information and receive information from the 
Commission. Does that exist, and is it satisfactory if it does? 
What could be done to make certain that, from the retail 
manufacturing as well as the safety advocates, how do we make 
certain that the Commission has the willingness and ability to 
pay attention to concerns?
    Mr. Locker, you were nodding your head, which----
    Mr. Locker. Well, I mean, you know, first of all, I just 
want to comment on some things that were made--some statements 
that Ms. Cowles made.
    In my experience and I think in most practitioners' 
experience, we would take exception that agreements with the 
Commission are routinely ignored. I mean, there is a serious 
price to pay, both legally, morally, ethically, and in the 
court of public opinion, if you do not follow through on your 
obligation to conduct a recall that you voluntarily agreed to. 
It simply doesn't happen.
    Now, that doesn't mean some disagreements don't arise 
occasionally as to, you know, how effective you are being in 
the process. But the fact of the matter is, in my experience, 
people that agree to a recall commit to it.
    Now, to your question about information----
    Senator Moran. Mr. Locker, I was only going to say I need 
to learn from you to answer the question that I want to answer.
    Mr. Locker. Right. I will definitely answer your question 
in terms of information.
    Right now, the Commission has broad authority to obtain 
information from companies and retailers and distributor of a 
product and any importer of a product. And they exercise that 
authority vigorously, and they get that information.
    It used to be that it was more of a two-way street, and, 
currently, information tends to be embargoed, considered or 
labeled by legal staff as work product at the agency. And 
information about a company's product should be available to 
that company. So if there is testing information, evaluative 
information, issues related to the safety of that product, how 
it is being used, those companies should have access to that 
information rather than it being kept from them, especially if 
it is going to form the basis of a discussion.
    Because when you have, as my colleague Commissioner Adler--
or Professor Adler, I call him--would say when negotiating with 
the government, it is good to have transparency between the 
parties so you can have a meeting of the minds. I am concerned 
that right now that information is not as forthcoming as it 
should be.
    Senator Moran. Any others want to comment on this?
    Ms. Falvey, I don't know what your post employment at the 
Commission has entailed, but has the Commission changed over 
time in its willingness to receive input from those affected by 
their decisions?
    Ms. Falvey. I think this current commission is very open to 
receiving information. I think we heard that, in terms of 
working on rules like the ROV rule, the laundry pod work that 
has been done, on a voluntary standard.
    I think, though, that where the breakdown occurs is between 
staff and compliance professionals out in the field working in 
the companies when they are trying to talk about a particular 
product, a particular recall, a particular issue. And that is 
what Mr. Locker was talking about.
    The concern about, ``Well, if I share this information with 
you, I could not necessarily make out a case against you,'' 
creates more of a litigious position between the regulated 
entity and the commission, when 90 percent or more of what is 
going on at the Commission is done on a voluntary basis.
    Senator Moran. Thank you.
    Let me ask perhaps Mr. Gold or Ms. Falvey, your clients, 
they are thinking about section 15 reporting obligations with 
the uncertainty that exists today from the Commission on 
whether or not the Retailer Reporting Program satisfies that 
requirement.
    Describe the thought process on the part of a retailer in 
weighing their benefits to participate in the program. If there 
is uncertainty, what does it do in that regard, and what are 
the consequences to the effectiveness of the program?
    Mr. Gold. I think that is one of the outstanding issues 
that we are trying to identify with the CPSC as they are doing 
their review, where are they in that whole process.
    I think for retailers and others who want to participate in 
the program, they see the benefit of being able to provide that 
information. It is a lot of information they provide, as has 
been identified. If that information is not protected and does 
not meet the goal of meeting your 15(b) requirement, companies 
aren't going to want to participate and provide this 
information that could then be used against them for something 
else.
    So it is that protection and it is that willingness to 
provide that information with that benefit in place, as well.
    Again, we think it is a benefit to both the CPSC and for 
the retailers and manufacturers who participate in that 
program. Again, as was noted, it has been a 10-year pilot. It 
is time we move beyond the pilot phase and really look at how 
do we implement this, like other agencies have done with other 
programs that are public-private partnerships that help advance 
the mission of the agency.
    So I think companies are really weighing that, trying to 
figure out--they want to do the right thing, but if they are 
not going to be guaranteed some of these benefits for some of 
these protections, they might not be as willing to participate 
and help this process move forward.
    Senator Moran. You heard the Chairman's testimony. You 
heard the Commissioner's reply or response to the same kind of 
question. Would you be any more certain today where we are this 
afternoon--it is almost noon. Are you any more certain late 
this morning than you were early this morning about what is 
happening at the Commission in regard to this issue?
    Mr. Gold. No.
    Senator Moran. OK.
    Mr. Gold. Unfortunately.
    And, you know, I think we urge them to wrap up their 
decision on this, and I know companies are eagerly waiting to 
see whether or not this is a program they want to participate 
in. I think they would like to, depending on how this shakes 
out. But, you know, we really urge the Commission to continue 
with their work on their evaluation of the program.
    And hopefully they take into account what the participants 
of the program have said have been the benefits for both the 
participants and the agency. And we appreciate Commissioner 
Buerkle's response on that. You know, we align with her, with 
what she said with the value of the program.
    Senator Moran. I want to make sure I understand this, but 
there are two aspects. One of this is privacy, and one of it is 
the certainty of whether or not it satisfies the requirement. 
The rule has a consequence on two issues that may cause a 
company from refraining from participation. One is what happens 
to the information, and, two, whether it satisfies a legal 
requirement.
    Is that accurate?
    Mr. Gold. Yes. I believe so. In talking about the Voluntary 
Recall Rule separate from the Retailer Reporting Program, yes, 
I believe that is accurate.
    Senator Moran. OK.
    Mr. Locker?
    Mr. Locker. Yes, I just want to comment on the--you know, 
there is a third aspect to the Retailer Reporting Rule. These 
entities agreed to do this at tremendous expense and built it 
into their compliance programs under a supposition that they 
were not going to face increased civil liability with the 
agency. That was the tradeoff. And they have acted in good 
faith on that for many years.
    To change those rules now is--fundamentally, there is an 
unfair due process issue. And so, you know, many courts have 
ruled that sometimes just changing interpretive guidelines that 
have been substantively relied upon without going through 
adequate rulemaking and without adequate due process should not 
occur. And I think that is a third element at play for 
retailers.
    Senator Moran. Thank you.
    Any other comments from any of the witnesses? Anything that 
you want to make certain gets into the record before we close 
this hearing?
    Mr. Locker. I would like to comment on one issue, and that 
is--and there has been a lot of discussion both in the first 
panel and this panel on what is or isn't an effective recall. 
And a lot of that has to do with how you define what a recall 
is.
    So if you are measuring recall effectiveness by the amount 
of product that gets returned, regardless of an evaluation of 
the length of useful life of that product, its cost, its shelf 
life, how it is used by consumers, the perception of risk on 
that product--and I think Commissioner Adler wrote a Law Review 
article on that before he became a commissioner--then you are 
going to doom yourself, in effect, to failure. You will never 
have an agency that achieves an effective recall rate because 
the rate itself is inherently going to be low because of the 
measurement metrics that you are using.
    On the other hand, if you look at this issue, as soon other 
agencies do, like the Food and Drug Administration, on 
measuring the effectiveness of a recall by how that recall is 
communicated, including using social media and whatever media 
is available--and that, by the way, I would argue, why 
companies that do voluntary recalls with the agency actually 
prefer and like the Commission to issue the press release, 
because they feel it can get through the marketplace and 
fragmented media clutter, and the message gets out there. If 
you measure it by that metric, then you would have, actually, 
an agency that has, I would argue, very effective rates of 
recall effectiveness.
    So I think you are informed by how you look at that.
    Ms. Cowles. Can I just----
    Senator Moran. Yes, ma'am.
    Ms. Cowles.--respond to that?
    And I agree that there are many--and that is why, as I 
said, KID is pulling together experts to look at this issue of 
recall effectiveness.
    I think, by any measure you use, 4 percent of the products 
with consumers participating is an abysmal number. Even if we 
doubled, tripled, quadrupled it by using your different 
measures to say if people threw them out or whatever, that is 
still a lot of products.
    And our organization is a testament to it. I deal every day 
with parents whose children are killed or injured by recalled 
products. So to say that, you know, as long as my company 
announces the recall and sends out a social media tweet, we 
have done our job--again, you know how to reach us when you are 
selling us the product. You should put the same time, effort, 
and money into reaching the consumers when you are trying to 
retrieve it.
    And some of these products had very few injuries or death 
before they are recalled, but there are catastrophic injuries. 
And, obviously, the death of a child is nothing anyone wants to 
face. So to say, ``As long as no other death takes place, we 
are going to assume it is a successful recall,'' doesn't 
understand the issue of consumer products and how they remain 
in the homes.
    Senator Moran. Any other comments?
    Very good. I thank you for your testimony.
    The hearing record will remain open for 2 weeks. During 
this time, senators are asked to submit any questions for the 
record. Upon receipt, the witnesses are requested to submit 
their written answers to the Committee as soon as possible.
    Again, thank you for your testimony.
    The hearing is concluded.
    [Whereupon, at 11:58 a.m., the hearing was adjourned.]

                            A P P E N D I X

     Prepared Statement of Walt A. Sanders, Washington DC Counsel, 
                          Safe Fields Alliance
    Chairman Moran and Ranking Member Blumenthal:

    My name is Walt Sanders, outside counsel for the Safe Field 
Alliance.
    The Safe Fields Alliance is a coalition of artificial turf 
companies dedicated to educating stakeholders around the safety of 
synthetic turf fields using crumb rubber.
    Nothing is more important than the safety and health of children, 
which is why when making decisions related to children's safety and 
health, we have to look at the facts and the science--which in this 
case are extremely clear. An overwhelming body of scientific evidence 
shows that synthetic turf with crumb rubber infill is safe for children 
to play on. We believe that rigorous science and unbiased research is 
the best antidote for uncertainty, and we always welcome additional 
research.
    We are submitting testimony today because of the focus of this 
hearing on CPSC enforcement powers and responsibility.
    Last week, the NBC Nightly News ran a story that called into 
question the safety of crumb rubber, the infill used to support many of 
the synthetic turf fields installed throughout the Nation. The NBC 
report cited a number of cancer cases brought into the public domain by 
a soccer coach from Seattle. The soccer coach claims that crumb rubber 
may have caused these cancers.
    First and foremost, our sympathy goes out to the cancer patients 
and their families featured in the NBC report. Nothing is more 
important than the safety and health of children. That is why when 
making decisions related to children's safety and health we have to 
look at the facts and the science, which in this case are extremely 
clear: synthetic turf fields using crumb rubber are safe.
    Dozens of scientific studies, including peer-reviewed academic 
analyses and Federal and state government reports, have all found no 
connection between these fields and cancer or other health issues.
    When this issue was first raised in 2008, a number of studies were 
commissioned and the overwhelming majority of the scientific community 
was satisfied that the results showed no reason for concern. As NBC 
notes in its report, ``No research has linked crumb or shredded rubber 
to cancer.''
    We join the chorus of voices calling on the Environmental 
Protection Agency and the Consumer Product Safety Commission to take a 
stand. In our view, scientific studies analyzed by independent third-
parties that hold up under peer-review from qualified toxicologists are 
the best antidote for uncertainty.
    The NBC report cited several chemicals found in crumb rubber as 
points of concern. However, this information is misleading without 
context and without baselines, especially given that we all eat, drink, 
and breathe trace levels of chemicals in our daily lives. Industry 
voluntarily ensures the levels of any chemicals in synthetic turf 
fields are lower than the Consumer Product Safety Commission's lead and 
chemical standards for children's toys and the Environmental Protection 
Agency's safe standards for urban and rural soils.
    More research can always be done, and we are willing to support any 
additional scientific studies in any way we can. However, it should be 
pointed out that over a decade of research has not produced a single 
published, peer-reviewed study that shows that crumb rubber is unsafe.
    The industry voluntarily came to CPSC in 2008 after the State of 
New Jersey raised safety issues when the State environmental agency 
found traces of lead in turf fields in New Jersey. CPSC staff conducted 
testing on samples collected as part of an official investigation which 
was initiated by concerns from the State of New Jersey. CPSC staff 
concluded that artificial turf was safe for kids to play on, and issued 
a press release announcing that result.
    CPSC has since then revised their statement to limit it to the 
specific issues that they studied (lead in turf) and posted a statement 
to that effect on their website as an amendment to the 2008 report.
    Since then the turf industry has removed all lead from its turf 
fields.
    The issue is now the safety of crumb rubber.
    The industry has met with the CPSC Commissioners on several 
occasions and has shared all of the relevant research related to the 
safety of synthetic turf. The industry's position has not changed with 
respect to the safety of their products.
    Scientific research from academic, Federal and state government 
organizations has unequivocally failed to find any link between 
synthetic turf and cancer.
    We are committed as an industry to the safety of our fields and the 
athletes that compete on them--which is why we have encouraged the 
rigorous work from third-parties that has taken place over decades to 
confirm there, are no negative health effects connected to synthetic 
turf. We are always open to sharing this available wealth of research 
with concerned individuals or organizations, and are fully confident in 
this body of findings.
    Regrettably, Chairman Kaye has made public statements saying the 
CPSC can no longer stand behind the safety of synthetic turf and crumb 
rubber, but has not stated a reason why. This contradictory information 
has created confusion in where the CPSC stands with regard to the 
safety of synthetic turf and crumb rubber, and has left parents, 
coaches, and local communities confused and wanting for information 
from the CPSC and other Federal agencies.
    In July we met with Chairman Kaye and his staff and updated the 
agency on the most recent scientific evidence that crumb rubber does 
not pose a health risk. We sent a follow up letter to Chairman Kaye 
shortly after the meeting requesting the Commission to work with the 
industry and to update the public on the progress of CPSC's work on 
this issue. As of this date, we have not received a response to the 
letter, which we now submit for the record.
    What the industry is asking for from CPSC is the assurance that the 
agency will take the necessary steps to analyze the existing scientific 
data on whether is a public statement on the progress of its work. 
Synthetic turf is a consumer product and CPSC has a responsibility to 
the public to act and not leave the public at a loss for direction.
    Perhaps this Committee will provide the Commission with some 
direction.
    Thank you, Mr. Chairman for the opportunity to present this 
testimony.
                                 ______
                                 
                                                      July 20, 2015

Hon. Elliot F. Kaye,
Chairman,
U.S. Consumer Product Safety Commission,
Bethesda, MD.

Dear Chairman Kaye,

    Thank you very much for giving us the opportunity for our companies 
to brief you on recent efforts by the industry to establish the safety 
of synthetic turf and crumb rubber. We especially appreciate the 
assistance of your staff, Steve McGoogan, and Jonathan Midgett in 
helping to arrange the dynamics and success of the webinar/
teleconference format of the meeting. It is unfortunate that time 
constraints placed our presentation into overdrive as the science and 
studies involved in assessing the safety of synthetic turf and crumb 
rubber are highly complex.
    Because of the importance of this issue, it is worth reiterating 
the salient points of our presentation:

   The synthetic turf industry has worked closely with rubber 
        recyclers who have been voluntarily complying with crumb rubber 
        standards that are very strict and comply with the California 
        Human Health Screening Level standard for heavy metals and meet 
        the EPA de minimus standard for exposure to carcinogenic PAH's. 
        We insist that the tire recycling industry supply our industry 
        exclusively with car/light truck tires that are domestically 
        produced. We welcome feedback on these compliance standards.

   Science continues to strongly support the safety of crumb 
        rubber. Lab testing of crumb rubber toxicity in multiple 
        continents by academia, toxicologists and independent schools 
        has shown toxins in crumb rubber to be substantially below any 
        reasonable base line such as standards developed for urban/
        rural soils, children's toys, California Prop 65 standard and 
        many other similar base lines. We would not use crumb rubber as 
        an infill for our product if this was not the case.

   The types of cancers being linked to crumb rubber by media 
        reports, primarily adolescent lymphoma and leukemia, have been 
        researched extensively in the past and there are multiple IARC 
        publications that show no link between these types of cancers 
        and overexposure to chemicals of any kind including highly 
        carcinogenic cigarette smoking. We expect the work being done 
        by the Association of State and Territorial Health Officials 
        (ASTHO) will confirm these findings.

    What we took away from this meeting is the following:

   CPSC staff expressed a willingness to open up a constructive 
        dialog with our companies to continue to assess existing 
        studies and emergent science to assess the safety of synthetic 
        turf and crumb rubber;

   Our companies will continue to provide CPSC with new science 
        and emerging data that will help establish that synthetic turf 
        and crumb rubber do not pose a health risk to consumers;

   We will continue to encourage EPA, CDC, ASTHO and other 
        entities involved with assessing the safety of turf and crumb 
        rubber, to provide the agency with findings validating the 
        safety of turf and crumb rubber;

   CPSC expressed a willingness to explore the possibility of 
        working with the ASTM Subcommittee in its efforts to establish 
        chemical standards for crumb rubber.

    We look forward to building a constructive and ongoing dialog with 
the CPSC that will hopefully result in the agency's public commentary 
that will dispel misunderstandings and misconceptions about the 
benefits of synthetic turf to the general public.
    Thank you again for listening to our presentation.
            Sincerely,
                                               Darren Gill,
                                          Vice President, Marketing
                                                             FieldTurf.
                                                 Rom Reddy,
                                                  Managing Partner,
                                                             Sprinturf.
                                               Heard Smith,
                                                         President,
                                                             Astroturf.
                                 ______
                                 
   Prepared Statement of Al Garver, President, Synthetic Turf Council
    Chairman Moran and Ranking Member Blumenthal:

    Recent news reports have focused on a desire for the U.S. 
Government to issue updated or additional guidance on the safety of 
synthetic turf fields containing crumb rubber infill. The calls come 
from parents of children who play on synthetic turf, and are echoed by 
officials at the local and state level who continue to inquire about 
persistent but unfounded concerns over the safety of crumb rubber 
infill.
    The Synthetic Turf Council (STC) remains a strong advocate of 
science-based research and reporting on the safety of synthetic turf. 
We serve as a clearinghouse for the more than 50 studies that have 
addressed various concerns on synthetic turf, including those conducted 
by local, state and Federal agencies. In each case, and as the Consumer 
Product Safety Commission has previously acknowledged, study results 
show no elevated health risks associated with synthetic turf or its 
components.
    We remain supportive of any new or expanded research that addresses 
the desire for additional information. However, there have been efforts 
in five state legislatures in the past year to impose moratoriums on 
synthetic turf while additional research is conducted. Each legislative 
committee who has examined the science has determined no such actions 
are necessary.
    This was the case in California earlier this year when legislation 
was introduced that called for a state-sponsored study into the safety 
of synthetic turf with crumb rubber infill. That bill originally called 
for a moratorium that would prevent schools and municipalities from 
making their own informed decisions. California legislators 
appropriately took the moratorium off the table, and moved forward with 
a three-year $2.85 million study to be conducted by CalRecycle under 
guidance by the state's Office of Environmental Health Hazard 
Assessment. It will be the most thorough and exhaustive study to date, 
but will not impose an unnecessary sanction that ignores the vast 
amount of existing research that has never drawn a connection between 
synthetic turf and health concerns.
    Beyond supporting further research, the STC and its members 
routinely assist parents, schools and government agencies with 
information that helps them understand how and why synthetic turf 
fields are pose no elevated risk compared to regular grass fields. 
These synthetic turf systems are tremendously beneficial for thousands 
of schools and communities. Recognizing that questions remain, the STC 
took further steps to create voluntary testing guidelines for infill 
products used in synthetic turf.
    In August, 2015, the STC issued testing guidelines based upon 
European Standard EN 71-3, which sets exacting limits for various 
elements found in children's toys. This standard allows crumb rubber to 
be tested in comparison to everyday products used by children, and is a 
respected and widely-recognized health and human safety protocol based 
upon quantified toxicology test methods.
    There are more than 12,000 synthetic turf fields in use across the 
United States, including those used by professional sports leagues, 
collegiate teams, public and private school systems, parks departments 
and municipalities. In many cases, these organizations have assessed 
the existing research on field safety and concluded there is no 
elevated risk to those who play on them. Further, a number of schools 
have conducted their own crumb rubber infill analysis in the past year 
based on persistent concerns. In each case, those who have shared their 
findings report no plausible link between crumb rubber and cancer.
    We are encouraged that the health and safety of those who play on 
synthetic turf is receiving attention at the Federal level. The STC 
remains committed to assisting in any way to help bring closure to the 
issue that has created unnecessary confusion and lingering questions.
    The STC website, www.syntheticturfcouncil.org, includes the many 
studies on the human health and environmental safety of synthetic turf 
and crumb rubber.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                          Hon. Elliot F. Kaye
Recall Effectiveness
    Question 1. Chairman Kaye, you testified that you are not 
``wedded'' to the provisions of the proposed Voluntary Recall 
Guidelines rule, but rather you are ``wedded to the goal of enhancing 
recall communications and effectiveness.''
    In both formal comments on the rule and in testimony before the 
CPSC, stakeholders have requested that the Commission establish a 
collaborative, cooperative working group comprised of the CPSC, 
consumer advocates, manufacturers and retailers to address recall 
effectiveness, conduct a scientific study of consumer behavior to 
determine the most effective methods for communicating recalls to 
consumers and to establish best practices for conducting recalls.
    Does the CPSC plan to establish an informal working group to 
address potential ideas for improving recall effectiveness? If so, what 
is the timeline for doing so? If the CPSC does not intend to establish 
a working group or engage in related stakeholder outreach on this 
issue, why not?
    Answer. While I am open to all avenues that would genuinely assist 
recalling companies and the agency with enhancing the recall process, 
we do not have plans at this time to establish a working group. As we 
have a very engaged set of stakeholders, including on this issue, we 
will continue to benefit from their feedback even without creating a 
working group. As we consider what changes we might pursue, there will 
continue to be significant dialogue with our stakeholders, especially 
those who truly believe in recall effectiveness.

    Question 2. Chairman Kaye, many recalled products are returned to 
retailers by consumers, but as you are aware some consumers instead 
choose to modify use of a product to address the risk or will simply 
dispose of it altogether.
    My understanding is the agency's current measurement of recall 
effectiveness only includes products that are returned to the retailer 
and manufacturer. What is your strategy to ensure that the measurement 
of recalls accurately reflects all actions taken by consumers in 
response to recalls?
    Answer. Recall effectiveness is calculated using data supplied by 
the recalling firm or retailer that tracks the number of consumers 
requesting the remedy identified in the recall notification. To date, 
CPSC staff has not been able to identify a cost-effective, timely and 
efficient way to also track the actions of individual consumers who 
choose to take some action other than the remedy identified in the 
recall notification. The Commission is open to ideas of including in 
our measurement additional actions by consumers that can be captured in 
a cost-effective, timely and efficient manner.

    Question 3. Recently the Juvenile Products Manufacturers 
Association (JPMA) announced an educational campaign entitled ``It's 
not hard! Fill out your card'' to inform parents and caregivers of the 
important of filling out product registration cards, allowing them to 
receive direct notification of product recalls. In addition to social 
media channels and working through member companies, JPMA emphasizes 
product registration cards as the easiest way to ensure that 
information gets to families in the event of a product recall.
    Has the CPSC partnered with the JPMA on this campaign? If not, does 
the CPSC see this campaign as a good example of how to improve recall 
effectiveness? What does the agency do to encourage similar education 
efforts?
    Answer. While CPSC did not partner with the JPMA on its 
registration card campaign, the agency has been active on this front. 
In addition to routinely meeting with and educating trade associations 
and other groups to encourage innovative approaches to direct recall 
notification, CPSC has promoted the use of registration cards through 
several different avenues. In February 2015, CPSC issued a blog (http:/
/onsafety.cpsc.gov/blog/2015/02/04/product-registration-cards-think-
safety-not-marketing/) related to the product registration card 
requirements in Section 104 of the Consumer Product Safety Act. Within 
the blog, the agency recognized the contributions of the JPMA, the 
Consumer Federation of America and Kids In Danger in assisting our 
agency with outreach and education as we work to encourage consumers to 
fill out these cards. During her tenure, former Chairman Inez Tenenbaum 
took part in an event with the Attorney General of Illinois, Lisa 
Madigan, and consumer advocates to promote the use of registration 
cards. In early 2016, I plan to join with National Highway Traffic 
Safety Administrator Mark Rosekind for an event that is intended to 
collaborate with developers and data specialists on innovative, mobile 
solutions for the registration of consumer products.
    We welcome any campaign aimed at improving recall effectiveness 
through direct notification. There is no doubt that direct notification 
is a highly effective means of notifying consumers about recalls. 
Therefore, we always encourage companies to use direct notification for 
recalls when contact information is available.

    Question 4. Chairman Kaye, you and your fellow Commissioners have 
stressed in public statements and in testimony before the Senate and 
House oversight Committees that the CPSC is a data driven agency. 
Recent GAO reports have identified the CPSC's lack of data analytics 
capabilities as a fundamental issue.
    Given the critical role that accurate and timely data and the 
ability to quickly and efficiently analyze data plays in the CPSC's 
core mission of identifying emerging product safety risks and injury 
trends, please describe the CPSC's current data analytic capabilities, 
including current staffing levels, systems and proportion of the 
agency's budget.
    In recent years, how has the agency responded to the increase in 
available data and the emergence of new technologies and analytic 
capabilities? What are your plans for hiring, training, and deploying 
additional data analytic staff going forward as it pertains to 
enhancing CPSC's systems and data analytic capabilities?
    Answer. An October 2014 GAO report states that GAO staff 
interviewed CPSC officials, industry representatives, consumer groups 
and subject-matter experts who said that additional resources such as 
hiring staff with expertise in technical areas, including toxicology, 
public health, epidemiology, and engineering could improve the 
timeliness of CPSC's response to new or emerging product risks. In 
addition to inadequate resources, the report discussed multiple factors 
that affect how quickly CPSC responds to new and emerging hazards. Some 
of the factors that were discussed in the report include: (1) the legal 
standard for proving that a product is an imminent hazard requires 
extensive data analysis; (2) CPSC's inability to establish information-
sharing agreements with foreign counterparts may hinder our ability to 
respond to a potential hazard in a timely way; (3) CPSC addresses 
product hazards after the product has entered the market rather than 
using a preventative framework such as pre-market approval (such as the 
FDA or EPA); and (4) CPSC's delay in receiving death certificates. I do 
not perceive any of these very accurate factors to point to a specific 
deficiency in how we analyze data. Rather, the GAO correctly pointed 
out that with additional resources and authority, more could be done by 
CPSC to promote public safety and done faster. I completely agree with 
this assessment and continue to believe the public, especially 
children, have been put at risk because of these factors.
    The CPSC must determine quickly and accurately which product 
hazards represent the greatest risks to consumer safety. Information on 
injuries, deaths, and other consumer product safety incidents comes 
from a wide range of sources, including consumers and consumer groups, 
hospitals and clinics, industry and the media. Used and resale consumer 
products must also be monitored to prevent previously identified 
hazardous products from re-entering the marketplace. A large volume of 
data must be analyzed to identify patterns and trends that reflect 
potential emerging hazards. Moreover, the CPSC has to determine which 
addressable hazards present the greatest risk to the consumer to focus 
the agency's limited resources. The CPSC's request for FY 2016 
allocates $46 million, of the total $129 million requested, to help 
provide for the timely and accurate detection of consumer product 
safety risks.
    With regard to increases in available data and the emergence of new 
technologies and analytic capabilities, in recent years the CPSC has 
made significant investments in information technology to enhance and 
streamline hazard detection processes and improve analytic 
capabilities. This includes the development and improvement of the 
Consumer Product Safety Improvement Act of 2008 (CPSIA)-mandated, open 
government public database (available at: www.SaferProducts.gov), which 
enables consumers and others to submit reports of harm to the CPSC and 
view publicly reported incident information in a Web-based, searchable 
format. SaferProducts.gov is one of the many successes of the CPSIA. In 
response to Section 222 of the CPSIA, we also created a pilot Risk 
Assessment Methodology (RAM) system that enables the CPSC to analyze 
systematically a limited set of import line entries to identify the 
highest risk shipments, facilitating our import surveillance efforts at 
certain ports.
    The agency also developed the Consumer Product Safety Risk 
Management System (CPSRMS), to standardize how data are captured and to 
enable expanded and expedited data collection and analysis. CPSRMS 
currently has several analytical components: SaferProducts.gov, which 
consists of a public portal, a business portal, and a searchable 
incident database; an internally facing application for CPSC staff to 
analyze and triage incident reports; and a case management system for 
CPSC staff to respond to incidents. CPSRMS is the agency's primary tool 
for managing domestic incident data and makes more information 
available so that agency staff can quickly process domestic incidents. 
The FY 2016 funding request of $2.7 million is to continue to support 
and upgrade this domestic incident management system.
    Each year, through the National Electronic Injury Surveillance 
System (NEISS), the CPSC collects information about product-related 
injuries treated in hospital emergency rooms. This unique system 
provides statistically valid national estimates of product-related 
injuries from a probability sample of hospital emergency rooms. The FY 
2016 budget request of $2.2 million for NEISS activities will fund the 
following work: collection and review of data from approximately 100 
hospitals; technical and statistical support for data collection; 
coordination of NEISS activities funded by other Federal agencies 
through reimbursable agreements; and travel to hospitals for training, 
quality control, and recruitment of additional hospitals into NEISS to 
maintain the statistically valid sample size.
    Data collected from a range of sources including consumers, 
newspapers, medical examiners and coroners, health care professionals, 
state death certificates and retailers, is coded, compiled, and 
analyzed by a staff of 35, including some mathematical statisticians, 
in CPSC's Division of Data Systems in the Directorate of Epidemiology 
(EPDS). Additionally, EPDS is supported by a staff of 13 contractors. 
The Division of Hazard Analysis in the Directorate of Epidemiology 
(EPHA) currently has 12 mathematical statisticians who have received 
formal education and training in statistics. EPHA makes use of both 
probabilistic and nonprobabilistic data on injury and potential injury 
incidents and fatalities. EPHA (as well as other domains within CPSC) 
uses statistical software for analysis including SAS, JMP, R, and 
Excel.
    The Directorate of Epidemiology's staffing ceiling is currently set 
at 51. Resource needs are regularly reassessed and data analytic staff 
will be added as warranted and as agency priorities and funding levels 
permit. We will continue to seek additional funds to enhance further 
our data capabilities and analytics and hope Congress agrees with the 
health and safety value these efforts provide.

    Question 5. Chairman Kaye, can you expound on the results and 
effectiveness of the Buckyballs recall? My understanding is this recall 
was unique in that the CPSC assumed the responsibilities of the 
recalling firm. Of the 2.5 million sets sold, what was the product 
return rate? What this an effective recall in the agency's view?
    Answer. The Buckyballs matter was settled pursuant to an agreement 
between Maxfield and Oberton Holdings, LLC (``M&O'') and the CPSC (the 
``Settlement Agreement''). Because M&O had commenced dissolution and 
liquidation proceedings, the Settlement Agreement called for the CPSC 
staff to create a ``Recall Trust'' administered by a third party 
trustee (the ``Trustee'') that would implement the corrective action 
plan (CAP) set forth in the Settlement Agreement. The CAP provided for 
a recall of Buckyballs. To effectuate the recall, the Trustee engaged a 
company that specialized in claims processing. This entity processed 
claims, submitted claims to the Trustee and issued payments to approved 
claimants.
    The Settlement Agreement required several methods of conveying 
notice of the recall: a press release; additional publicity; and a 
website publicizing and implementing the recall. Among other actions, 
the Recall Trust reported it sent e-mail notices of the recall to more 
than 100,000 consumers and retailers and arranged for social media 
advertisements that reportedly were displayed 89 million times.
    In accordance with the Settlement Agreement, the Recall Trust 
provided refunds to consumers who returned qualifying products within 
the agreed-upon six-month recall period. Also in accordance with the 
Settlement Agreement, the Recall Trust implemented fraud detection 
procedures to ensure that the Recall Trust paid only valid claims.
    The Recall Trust reported it received a total of 3,415 claims. The 
Trustee approved 2,720 total claims and paid refunds to those 
claimants. The Recall Trust identified some claims as deficient because 
of missing information or as potentially fraudulent. Claimants were 
given the opportunity to remedy deficient claims and to provide more 
information regarding claims with indicators of fraud; 460 of the 
claims originally identified as deficient were remedied and paid.
Retailer Reporting Program
    Question 6. Chairman Kaye, participants in the Retailer Reporting 
Program (RRP) have operated under the understanding--and been 
consistently reassured--that data submitted to the CPSC under the 
program meets their obligations to file an initial report under 15(b). 
This RRP data has resulted in multiple product recalls and was recently 
cited as one source of data in the CPSC staff recommendation for a new 
standard for an infant durable product.
    What kind of analysis did the CPSC conduct in deciding to no longer 
allow RRP participants to meet their initial 15(b) reporting 
requirements by submitting data under the RRP? Did the CPSC conduct any 
engagement with RRP participants prior to this change in practice? Has 
the CPSC had any engagement with RRP participants after this change in 
position, and what have been the results of those discussions?
    Answer. The Retailer Reporting Pilot Program (RRP) began in 2004 as 
part of the resolution of a civil penalty case with a single retailer. 
Over time, the concept was expanded to include additional companies 
under circumstances that differed from company to company and pursuant 
to different understandings. The RRP did not--and to date, does not--
have formal documentation or uniform agreed-upon terms. Rather, 
participants--who were not limited to retailers--were added 
individually over nearly a decade pursuant to individualized 
understandings that reflected CPSC staff's assessment at that time of 
the value of the data that might be provided by a specific company. The 
information reported by participants and the mechanism for reporting 
varied from participant to participant.
    In the first year of the pilot program, CPSC received 2,623 reports 
from the single participating retailer. During the next few years, 
additional firms were brought into the pilot program, culminating in 
seven participating firms in 2009. The number of reports submitted grew 
as participants were added, with a total of 21,000 reports submitted in 
2009. Between 2009 and 2015, the number of reports submitted by the 
seven participating firms has increased by more than 40 percent, from 
21,000 reports to just over 30,000 reports.
    Since 2004, CPSC has received and processed 207,340 participant 
reports. Of the 4,020 recalls issued from 2004 through 2015, 0.6 
percent (23 recalls) were cases where the participant report was the 
initial source of hazard information. In short, this amounts to an 
average of one recall for every 9,000 reports submitted, processed and 
analyzed over close to a 12-year period. It is important to remember 
that the firms involved in the 23 recalls would have been required to 
report the incidents behind these recalls in order to fulfill 15(b) 
reporting requirements, even in the absence of a Retailer Reporting 
type program.
    As part of a careful review of the Retailer Reporting Pilot 
Program, in July 2014 CPSC's Office of General Counsel sent a letter to 
all RRP participants clarifying the legal implications of participation 
in the RRP with respect to Section 15(b) reporting obligations and 
potential civil penalties. In this letter, the General Counsel stated, 
``Participation in the RRP does not replace, alter, limit or have any 
impact whatsoever on the statutory duty of participants to report 
information as required under Section 15(b) of the Consumer Product 
Safety Act (CPSA), 15 U.S.C. Sec. 2064. The letter goes on to state, 
``Participation in the RRP does not provide `safe harbor' protection 
from Section 15(b) reporting obligations or possible related civil 
penalties. Specifically, submitting data to CPSC in connection with the 
RRP does not satisfy Section 15(b) reporting obligations. RRP 
participants must independently assess data and other information in 
their possession to determine when Section 15(b) reports should be 
made.''
    While I am not aware of any formal meetings between CPSC staff and 
the participating firms regarding the structure of the RRP, prior to 
the July 2014 letter, CPSC staff received and has considered carefully 
multiple letters from participants. CPSC staff also maintains constant 
informal contact with all participants. In addition, CPSC staff 
conducted a formal meeting with the participants since that letter was 
distributed. As was explained at that meeting, adherence of RRP 
participants with Section 15(b) reporting obligations is assessed by 
CPSC staff case-by-case, based on application of the legal requirements 
to the specific facts and circumstances. The outcome of the meetings 
was a commitment by CPSC staff to further analyze the value of the 
pilot program and suggest options to me regarding the future direction 
of the pilot program.

    Question 7. I understand that one company has withdrawn from the 
RPP because of concerns about the risk and confusion over 15(b) 
reporting obligations. What actions are you taking, if any, to ensure 
that current RRP participants remain in the program?
    Answer. Participation in the program has always been entirely 
cooperative and voluntary. CPSC staff has taken no action to ensure 
current participants remain in the program; nor has CPSC staff taken 
any action to encourage participants to leave the program.

    Question 8. What specific improvements would you like to make to 
the RRP?
    Answer. If the program is to continue and expand in any form, 
additional funding will be required to permit the agency to build and 
maintain additional systems to handle the influx of more data. It is 
extremely expensive to build, operate and maintain that type of data 
warehouse.

    Question 9. How many retailers and manufacturers have inquired or 
applied to join the program since it began ten years ago? What, if any, 
communication has been made between the CPSC and those who are 
interesting in joining the program?
    Answer. Since 2004, CPSC staff is aware of twelve firms that have 
inquired or applied to join the pilot program. Seven firms were 
accepted into the pilot. Because we did not have sufficient resources, 
some firms were told that their request to participate would not be 
considered until additional CPSC funds became available to expand the 
pilot program.
Phthalate Alternatives Rulemaking
    Chairman Kaye, as you recall the issue of phthalates was a focus of 
the Subcommittee's prior CPSC oversight hearing in June, and it was 
mentioned briefly again at the hearing on October 6. Having reviewed 
your responses to my questions for the record, I wanted to take this 
opportunity to ask a few additional questions if you would be willing 
and able to answer.

    Question 10. Mr. Chairman, you stated the CHAP cumulative risk 
assessment (CRA) method was consistent with the recommendations of the 
National Research Council's 2008 report on the CRA of phthalates. That 
report was requested by the EPA. Did you consider that, despite the NRC 
report, the EPA has yet to conduct a CRA for phthalates and rather has 
recently requested further input on how to conduct such an assessment? 
Is it your view that the NRC recommendations are sufficiently robust 
for how to conduct a definitive and quantitative CRA for regulatory 
purposes?
    Answer. The CPSC technical staff considers the NRC \1\ 
recommendations to be sufficiently robust to conduct a CRA. In addition 
to the 2008 report referenced, CPSC staff notes that the NRC reiterated 
its recommendation for a phthalates CRA in a report published in 
2009.\2\ While EPA is still planning a CRA of phthalates, Congress 
through Section 108 of the CPSIA required CPSC to convene a Chronic 
Hazard Advisory Panel (CHAP) to conduct a CRA for phthalates within two 
years, which the agency did.
---------------------------------------------------------------------------
    \1\ NRC, 2008. Phthalates and Cumulative Risk Assessment. The Task 
Ahead. Committee on the Health Risks of Phthalates, National Research 
Council, National Academy Press, Washington, D.C.
    \2\ NRC, 2009. Science and Decisions. Advancing Risk Assessment. 
Committee on Improving Risk Analysis Approaches used by the U.S. EPA, 
National Research Council, National Academy Press, Washington, D.C.

    Question 11. Mr. Chairman, in your responses to the Subcommittee, 
you noted the Agency for Toxic Substances and Disease Registry 
(ATSDR)'s work on toxicity of mixtures. ATSDR has evaluated the 
potential hazard of certain chemical mixtures; however, the 
Subcommittee could not find an example of where it conducted a CRA. Can 
you elaborate on what ``similar methodology'' to which you were 
referring?
    Answer. According to CPSC staff, ATSDR evaluates the toxicity of 
selected chemical mixtures that are relevant to Superfund sites; they 
do not perform complete risk assessments. ATSDR's evaluations \3\ are 
done to support risk assessment performed by others. ATSDR's methods 
\4\ for assessing chemical mixtures are essentially similar to the 
methods used by EPA \5\ and the CHAP. For example, EPA, ATSDR, and the 
CHAP all consider the weight of the evidence for how the chemicals in a 
mixture interact. The interactions may be independent, additive, 
synergistic or antagonistic. They all consider the hazard index as an 
acceptable method for estimating the risk from a mixture. One 
difference, however, is that ATSDR and EPA guidelines allow the risk 
assessor to assume that mixtures are additive if the components act on 
the same target organ or by the same mode of action. The CHAP only 
calculated cumulative risks when there was empirical evidence 
demonstrating an interaction between the components of the mixture.
---------------------------------------------------------------------------
    \3\ Interaction Profiles for Toxic Substances. Agency for Toxic 
Substances and Disease Registry.
    \4\ Guidance Manual for the Assessment of Joint Toxic Action of 
Chemical Mixtures. U.S. Department of Health and Human Services, Public 
Health Service, Agency for Toxic Substances and Disease Registry, 
Division of Toxicology. May 2004.
    \5\ Guidance on Cumulative Risk Assessment of Pesticide Chemicals 
That Have a Common Mechanism of Toxicity. Office of Pesticide Programs 
U.S. Environmental Protection Agency Washington, D.C. 20460 January 14, 
2002.

    Question 12. Mr. Chairman, you referenced the EPA's pesticide CRAs 
as well. In reviewing the limited number of pesticide CRAs conducted by 
EPA, it appears the EPA has a robust and thorough approach relative to 
that of CHAP. Outside of pesticides, EPA's limited use of cumulative 
risk assessment has been as a risk prioritization or screening tool. 
Have the CPSC technical and scientific staff evaluated whether the 
CHAP's CRA is more in the nature of a screening tool, and whether 
subsequent analysis is required prior to taking a final regulatory 
action?
    Answer. The CPSC staff does not consider the CHAP's CRA to be a 
screening level risk assessment.
    After evaluating the CHAP's cumulative risk assessment, CPSC staff 
does not believe that additional analysis with respect to cumulative 
risk assessment is needed before taking regulatory action.

    Question 13. Mr. Chairman, you stated the International Program on 
Chemical Safety has issued CRA guidelines. The citation you provided 
comes from the report of a 2007 workshop, stating ``The principal 
objective of the workshop was to initiate development of a framework 
for the risk assessment of combined exposures to multiple chemicals.'' 
The language would indicated that this appears to be a preliminary 
document. Are you aware of any Federal CRA conducted under this 
framework? If so, was it used as a basis for actual restrictions on any 
chemicals, or simply as a prioritization tool?
    Answer. EPA and ATSDR guidelines for assessing chemical mixtures 
have been in place for more than a decade, and those agencies generally 
follow their own guidance documents. The CHAP was guided primarily by 
the recommendations of the 2008 NRC report on phthalates CRA.\6\ That 
NRC report refers to the EPA and ATSDR guidelines. CPSC staff is not 
aware of any Federal CRA conducted under the World Health Organization 
(``WHO'') but believes that framework \7\ is generally consistent with 
U.S. methods.
---------------------------------------------------------------------------
    \6\ NRC, 2008. Phthalates and Cumulative Risk Assessment. The Task 
Ahead. Committee on the Health Risks of Phthalates, National Research 
Council, National Academy Press, Washington, D.C.
    \7\ Meek, M. E., Boobis, A. R., Crofton, K. M., Heinemeyer, G., Van 
Raaij, M., & Vickers, C. (2011). Risk assessment of combined exposure 
to multiple chemicals: A WHO/IPCS framework. Regulatory Toxicology and 
Pharmacology, 60(2 suppl 1), S1-S14.
---------------------------------------------------------------------------
                                 ______
                                 
    Response to Written Question Submitted by Hon. Cory Gardner to 
                          Hon. Elliot F. Kaye
    Question. Chairman Kaye, the Commission recently launched an 
education campaign for furniture and TV-tipovers in an effort to 
promote safety and prevent child injuries and fatalities. Has the 
Commission considered launching a similar education campaign for corded 
window coverings? Do you believe such an education campaign could 
improve safety surrounding corded window coverings? If not, what do you 
believe accounts for the difference in effectiveness of an education 
campaign for furniture and TV-tipovers compared to an education 
campaign for corded window coverings?
    Answer. In 1985, CPSC issued a major consumer safety alert related 
to the strangulation risk posed by a variety of window coverings: 
www.cpsc.gov/en/Newsroom/News-Releases/1985/CPSC-Warns-of-The-Danger-
Of-Children-Strangulation-In-Window-Blind-Or-Drapery-Cords/. Thirty 
years later and window covering cords are still killing or seriously 
injuring children at an alarming and unacceptable rate: nearly once a 
month. This is one of the most serious hidden hazards in the home. For 
the past decade, CPSC has collaborated with the Window Covering Safety 
Council each October (Window Covering Safety Month) to educate parents 
and caregivers. Two of the biggest recalls in CPSC's history have 
involved recalls managed by the Window Covering Safety Council. Yet, 
the deaths and life-altering injuries continue. Window covering 
manufacturers have also allocated substantial funds to marketing and 
educational efforts geared toward the window covering safety. I 
appreciate the industry's efforts, but it is not remotely sufficient. 
Education alone is not saving enough lives. We have decades of deaths 
that make that point very clear. We are better than this, as a society, 
to allow these deaths to continue, especially when safe alternatives 
are economical and available.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                          Hon. Elliot F. Kaye
    Question 1. Will the CPSC commit to providing this Committee with 
semi-annual reports summarizing, by product, the recall effectiveness 
information provided in Parts 1 and 2 of manufacturer Monthly Progress 
Reports (MPRs) for Corrective Action Plans (CAPs)?
    Answer. Section 6(b) of the Consumer Product Safety Act (CPSA), 15 
U.S.C. Sec. 2055(b), generally prohibits the public disclosure of 
information that is provided to the CPSC in carrying out its 
responsibilities under section 15 of the CPSA, 15 U.S.C. Sec. 2064 
(relating to consumer product recalls). I continue to believe strongly 
that Section 6(b) is an anti-consumer safety and anti-government 
transparency provision that Congress should repeal. Section 6(b) also 
prohibits public disclosure of any information that could identify a 
specific product manufacturer unless the Commission has taken 
reasonable steps to ensure that it is fair and accurate and has given 
the manufacturer of the product(s) in question 15 days advance notice 
(of the information to be disclosed) and an opportunity to comment. The 
information discussed in this question is submitted by many different 
manufacturers or retailers. Accordingly, we could not lawfully provide 
these responses to the general public without going through the onerous 
section 6(b) notification process. Nevertheless, consistent with our 
rules implementing section 6(b), 16 C.F.R. Sec. 1101.12(g), and with 
the expectation that these materials are kept confidential, we are 
permitted by law to provide that information to the Chairman or Ranking 
Member of the Committee or subcommittee of jurisdiction acting pursuant 
to committee business.
    However, in addition to other practical concerns such as IT system 
constraints, we currently lack the resources to collect, collate and 
transmit this information electronically. We would be pleased to work 
with the Committee to see what information the Committee would find 
useful on this point that we might be able to provide in a cost-
effective and efficient manner.

    Question 2. Will the CPSC commit to posting copies of received 
manufacturer MPRs for CAPs (with any redactions required by the 
Consumer Product Safety Act, as amended) in a timely manner on the 
Freedom of Information Act (FOIA) portion of the Commission's website?
    Answer. The CPSC is committed to following the President and 
Attorney General's guidance for achieving active disclosures and 
transparency under the FOIA. See http://www.justice.gov/sites/default/
files/oip/legacy/2014/07/23/proactive-disclosures.pdf As a result of a 
thorough and helpful audit of our FOIA program by the CPSC Inspector 
General, we are in the process of significantly enhancing our FOIA 
processes. As part of this effort, we will look at the resource 
implications of making a discretionary release of this information, 
which is permissible under a number of FOIA exemptions, whenever 
appropriate. Of course, in some circumstances it may be appropriate for 
CPSC to withhold certain records, or portions of records, that are 
otherwise designated for active disclosure if those records fall within 
a FOIA exemption, just as is done in response to a FOIA request. For 
example, the information may be part of an ongoing active enforcement 
proceeding and release of the information could reasonably expected to 
interfere with enforcement proceedings.

    Question 3. Does CPSC staff conduct any audits of MPRs submitted? 
If so, what is the audit rate, and how often does the audit result in 
corrections to the MPR data?
    Answer. As part of overall efforts aimed at protecting consumers, 
CPSC Compliance and Field Operations staff prioritizes review of MPRs 
associated with the highest-priority recalls. We also currently have an 
employee assigned to review overall data integrity for MPRs while we 
consider more permanent options within the limits of our resources. It 
is not common for there to be substantial changes to the MPRs after 
review, but it should be noted that the agency is largely reliant on 
the recalling firms to submit accurate and complete data. The agency 
does not have access to the underlying sources of information to verify 
the accuracy of the submitted data.

    Question 4. Has the CPSC ever given any company participating in 
the Retailer Reporting Program any form of formal or informal civil 
penalty ``immunity'' with respect to information provided under the 
program? If the answer is yes, please identify each such company, 
describe the extent of the immunity, and explain the CPSC's authority 
to grant such immunity.
    Answer. Staff is not aware that any participant in the ``Retailer 
Reporting Program'' (RRP) has been given any form of formal or informal 
civil penalty ``immunity'' with respect to information provided under 
the program. CPSC staff considers potential section 15(b) violations by 
non-RRP participants in the same manner that staff considers potential 
section 15(b) violations by RRP participants. Thus, matters involving 
RRP participants that merit investigation for potential civil penalties 
arising out of section 15(b) are investigated and considered based on 
the specific facts and circumstances, and in the ordinary course just 
as such matters involving non-RRP participants are investigated and 
considered. However, the RPP was created a number of years ago under 
different leadership at the agency. I cannot speak for that leadership 
and whether or not any type of immunity was intended, contemplated or 
provided.

    Question 5. To date, has information reported under the Retailer 
Reporting Program ever led to a product recall that would not have 
otherwise occurred through another channel, such as an independent CPSC 
staff investigation or a Section 15 report?
    Answer. Since 2004, CPSC staff is aware of approximately 23 recalls 
where an incident report submitted by a retailer participating in the 
program was the initiating source document. Companies do have a legal 
requirement to report incidents to the CPSC, so the agency would have 
ultimately become aware of those incidents, provided that the companies 
reported as required.

    Question 6. Has the CPSC ever taken action based on, or in response 
to, a low recall remedy rate? If your answer is yes, what is the 
threshold rate for such an action and is there any provision for such 
actions in the standard Corrective Action Plan that the Office of 
Compliance negotiates with companies?
    Answer. Yes, we have sought additional corrective action for 
recalls with low response rates and other reasons. Our corrective 
action plan letters include language that allows for the modification 
of a corrective action plan based upon the circumstances, including low 
response rates or additional deaths and injuries.
    Although we do not have a set threshold for seeking additional 
corrective action, compliance officers monitor the response rates 
particularly for the highest priority recalls they handle and determine 
if additional corrective action is appropriate. Additionally, we 
currently have an employee assigned to review recall response rates 
associated with certain key recalls and to make recommendations for 
potential further corrective action.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Richard Blumenthal to 
                          Hon. Elliot F. Kaye
    Question. Will CPSC commit to working with this Committee to 
provide aggregate data on recall effectiveness?
    Answer. Yes, subject to the legal concerns and resources discussed 
in previous questions, we would be happy to work with the Committee to 
provide this information.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Edward Markey to 
                          Hon. Elliot F. Kaye
    Question 1. In late August, Ikea recalled a children's nightlight 
because its plastic covering could come off and pose an electrical 
shock hazard. Yet not a single one of Ikea's 51 Facebook posts or 179 
Instagram posts in the past 90 days was about safety recalls--although 
1 of its 378 tweets did note the nightlight recall. 71 percent of 
adults use Facebook. Do you believe that more people would learn about 
safety recalls of defective products if companies were required to post 
recall notices on Facebook and other social media? Why or why not?
    Answer. I absolutely do. Companies should robustly use all of their 
available social media to publicize recalls, since social media in many 
cases is the ideal medium to reach a large number of consumers 
simultaneously. The effectiveness of social media's reach as compared 
with the reach of some of our historic notification methods (such as 
placing posters in retail locations) is unmatched. Through social media 
sites, companies are also able to collect and monitor data regarding 
the reach of their recall message.
    Nearly all major companies have an active presence on Facebook for 
marketing purposes, which should be used to disseminate recall 
information more widely to consumers. I expect companies to ensure that 
recall information is featured prominently on their websites and social 
media sites, instead of making consumers search for this information. 
Unfortunately, the CPSC itself does not yet have a Facebook presence. 
Those who support government transparency, genuine recall effectiveness 
and informing consumers about seasonal and emerging hazards in the home 
should endorse CPSC's creation of a Facebook account.

    Question 2. Over the years, many children died due to defective 
cribs, some of which had been voluntarily recalled years before the 
deaths occurred. In some of these cases, the voluntary recall notices 
did not even acknowledge the risk of death or injury that the defective 
cribs posed. Do you believe that more people would be likely to learn 
of and pay attention to safety recalls of defective products if 
companies were required to accurately describe the defect and whether 
it had been linked to injuries or deaths when they issued recalls? Why 
or why not?
    Answer. Yes. There is no doubt that prominently noting in the 
recall announcement that deaths and/or injuries have occurred is more 
likely to drive media attention that can ultimately capture consumers' 
attention, rather than not mentioning those facts or burying them in 
the release. As you note, these notices are voluntary, meaning they are 
subject to negotiation with recalling companies. It is fair to say that 
our interests in notifying consumers about the nature and degree of 
hazards do not always align with the interests of the recalling 
companies. Our staff does an excellent job of pushing for prominent 
release of the most useful information relating to the recall of a 
product. We are continuing to assess how to make our recall process 
more effective and this topic is one aspect of that review.

    Question 3. Do you believe that more people would learn about 
recalls of defective products like car-seats if the companies had to 
send letters or e-mails to people who purchased them, much like auto 
companies are required to do when defective cars are recalled? Why or 
why not?
    Answer. Again, I certainly do. There is no doubt that direct 
notification is a highly effective means of notifying consumers about 
recalls. Therefore, we always encourage direct notification for recalls 
when contact information is available. Many of our recalls involve 
direct notification via mail, e-mail or text message.

    Question 4. When companies issue voluntary recalls, they're also 
supposed to tell CPSC what they plan to do to remedy the problem. But 
some companies want the remedy--be it repair or exchange of the 
product--to also be voluntary. Do you believe that companies will be 
more likely to act to protect consumers if they have to comply with 
their remedy plans, or that it is better for consumers to just let 
companies do what they think is best on a voluntary basis? Please 
justify your response.
    Answer. Recalling companies propose their preferred remedy to CPSC 
staff and staff reviews the proposed remedy to determine whether it is 
adequate to protect consumers. The agreed-upon remedy is then 
memorialized in both the corrective action plan acceptance letter and 
the press release. The company must then provide that agreed-upon 
remedy to every affected consumer. I believe that it is best for 
customers to be fully informed about the product being recalled and the 
remedies available under that recall in order to take full advantage of 
the recall. While I have certainly seen recalling companies come up 
short in their efforts to publicize their recalls (and we continue to 
push on this front to change this dynamic), I do not recall instances 
of companies flat-out choosing not to provide the agreed-upon remedy 
when contacted by a consumer. If you have information about this 
concern that you can please share with me, I would certainly look into 
it.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Cory Gardner to 
                         Hon. Ann Marie Buerkle
    Question. Commissioner Buerkle, do you believe the Commission 
should pursue a nationwide recall of all corded window coverings? Are 
you aware of efforts by industry to promote improved corded window 
covering safety? Do you think such efforts could improve corded window 
covering safety?
    Answer. I do not believe the Commission should pursue a nationwide 
recall of the approximately one billion corded window coverings that 
are currently in the U.S. marketplace.
    The Commission is currently engaged in rulemaking to consider 
whether to adopt a mandatory Federal standard for window coverings. I 
am keenly aware of the tragic deaths of young children that occur as a 
result of corded window coverings, but according to the CPSC staff's 
most recent analysis, the annual risk of a fatal strangulation from the 
corded window coverings sold from 1996 to 2010 barely exceeds one in a 
hundred million units. That risk is already declining as older products 
are gradually being replaced with the better products that are 
currently available. It will continue to decline as even better 
products become available and as safer alternatives become more 
affordable. For these reasons, I have significant reservations as to 
whether or not it would be appropriate to adopt a mandatory standard 
with prospective effect. To pursue a recall of all corded window 
coverings would be tantamount to retroactive application of a standard 
that has not even been justified going forward. Any such recall could 
easily be construed as an end run around meeting the statutory 
prerequisites for adoption of a Federal standard.
    I am aware of many efforts by the industry to promote window 
covering safety. A crucial point to recognize is what population is at 
risk from corded window coverings. Nearly all of the deaths and 
injuries that have occurred as a result of corded window coverings have 
involved young children. For the large majority of households that do 
not have young children on a regular basis, corded window coverings 
pose no risk. The solution to this issue is to make sure that 
households with young children understand the hazard of a corded window 
covering so that the hazard can be avoided. To that end, the industry 
recently launched a certification program called ``Best for Kids,'' 
which will specifically identify window coverings that are suitable for 
households with children. I strongly support this program, as well as 
other education efforts by the industry. In addition, the Window 
Covering Safety Council, a coalition of major U.S. manufacturers, 
retailers and importers of window coverings dedicated to educating 
consumers about window cord safety, has recently partnered with 
Scholastic Inc., to develop window covering safety materials targeting 
pediatricians practicing close to military installations. Finally, the 
industry continues to introduce a wide variety of cordless window 
products and is developing innovative new designs that would prevent 
cords from forming a hazardous loop.
    Unfortunately, in comparison to other agency safety campaigns, CPSC 
commits very limited resources to any window covering education 
campaign. CPSC could do far more to educate parents, caregivers, and 
community health providers. There are many inter-governmental 
partnerships that should be considered to address this issue. The goal 
should be to raise awareness regarding this hazard rather than restrict 
choices for everyone.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Bill Nelson to 
                         Hon. Ann Marie Buerkle
    Question. Should voluntary recall notices contain the same types of 
information that are included in mandatory recall notices? If the 
answer is no, please explain why voluntary and mandatory notices should 
contain different types of information.
    Answer. Generally, I believe voluntary recall notices should 
contain the same types of information as mandatory recall notices. 
Since mandatory recall notices are issued only after a trial-type 
hearing in which the Commission staff's position is upheld against a 
company resisting a recall, the position of a firm voluntarily 
conducting a recall in cooperation with CPSC is quite different, and 
there may be situations in which information required in a mandatory 
recall notice should not be required for a voluntary recall. The 
Commission's proposed voluntary recall rule has the equities backwards, 
imposing more onerous requirements on firms conducting voluntary 
recalls than the Consumer Product Safety Act requires for mandatory 
recall notices.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Edward Markey to 
                         Hon. Ann Marie Buerkle
    Question 1. In late August, Ikea recalled a children's nightlight 
because its plastic covering could come off and pose an electrical 
shock hazard. Yet not a single one of Ikea's 51 Facebook posts or 179 
Instagram posts in the past 90 days was about safety recalls--although 
1 of its 378 tweets did note the nightlight recall. 71 percent of 
adults use Facebook. Do you believe that more people would learn about 
safety recalls of defective products if companies were required to post 
recall notices on Facebook and other social media? Why or why not?
    Answer. I believe that the use of social media could lead, in some 
cases, to more people learning about safety recalls. Given the wide 
variety of media, and the many different approaches taken by different 
firms, I think that any requirements in this area would have to be 
highly flexible rather than prescriptive.

    Question 2. Over the years, many children died due to defective 
cribs, some of which had been voluntarily recalled years before the 
deaths occurred. In some of these cases, the voluntary recall notices 
did not even acknowledge the risk of death or injury that the defective 
cribs posed. Do you believe that more people would be likely to learn 
of and pay attention to safety recalls of defective products if 
companies were required to accurately describe the defect and whether 
it had been linked to injuries or deaths when they issued recalls? Why 
or why not?
    Answer. I believe that recall notices should accurately describe 
the safety problem with a product (it may or may not be a defect that 
gives rise to a recall) and should include information about injuries 
or deaths that are related to that problem. This approach has been 
followed at CPSC for many years.

    Question 3. Do you believe that more people would learn about 
recalls of defective products like car-seats if the companies had to 
send letters or e-mails to people who purchased them, much like auto 
companies are required to do when defective cars are recalled? Why or 
why not?
    Answer. I believe that recalling firms should ordinarily provide 
direct notice to any purchasers whose contact information they have. 
For durable infant products (including infant carriers), manufacturers 
are already required to provide postage-prepaid product registration 
forms so that purchasers can be notified personally in the case of a 
recall. See Public Law No. 110-314, title I, Sec. 104(d), 15 U.S.C. 
Sec. 2056a(d); 16 C.F.R. part 1130.

    Question 4. When companies issue voluntary recalls, they're also 
supposed to tell CPSC what they plan to do to remedy the problem. But 
some companies want the remedy--be it repair or exchange of the 
product--to also be voluntary. Do you believe that companies will be 
more likely to act to protect consumers if they have to comply with 
their remedy plans, or that it is better for consumers to just let 
companies do what they think is best on a voluntary basis? Please 
justify your response.
    Answer. Before a company conducts a voluntary recall in cooperation 
with the CPSC, it must submit a Corrective Action Plan (CAP). The CAP 
must be approved by the CPSC staff. The vast majority of companies (>99 
percent) execute their CAP as agreed. On those rare occasions when a 
company does not do what it proposed, CPSC is not without recourse. It 
can take a variety of measures to address the hazard.
    I do not think that CPSC should change its approach because of a 
few rare problems. I believe that consumers would be worse off if we 
made all CAPs legally binding.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                            Cheryl A. Falvey
    Question 1. During the time you served as General Counsel of the 
CPSC, did you issue any legal opinion addressing the issue of whether 
the Office of Compliance could promise formal or informal civil penalty 
``immunity'' to companies participating in the Retailer Reporting 
Program? If your answer is yes, please explain the basis of such 
opinion. If your answer is no, what incentives do companies have to 
participate in the Retailer Reporting Program?
    Answer. I do not specifically recall whether the Office of General 
Counsel issued an opinion addressing the issue of whether the Office of 
Compliance ``could promise formal or informal civil penalty `immunity' 
to companies participating in the Retailer Reporting Program.'' The 
CPSC has the authority to exercise prosecutorial discretion with regard 
to civil penalty enforcement, but whether the internal delegations of 
authority extend that authority to the Office of Compliance is the 
legal issue for consideration. The incentives for retailers to 
participate in the Retailer Reporting Program include, but are not 
limited to, partnering with the CPSC on a robust compliance program to 
ensure the sale of safe products and minimizing the risk of civil 
penalties for failure to report information related to consumer 
complaints.

    Question 2. What is the legal enforceability of Corrective Action 
Plans that the CPSC negotiates with companies?
    Answer. A Corrective Action Plan is a ``document, signed by a 
subject firm, which sets forth the remedial action which a firm will 
voluntarily undertake to protect the public, but which has no legal 
binding effect.'' 16 C.F.R. Sec. 1115.20(a). The Commission has the 
right to seek broader corrective action if ``it becomes aware of new 
facts or if the corrective action plan does not sufficiently protect 
the public.'' Id. In addition to being signed by representatives of the 
subject firm, it acknowledges that the CPSC may monitor the corrective 
action and can publicize the terms of the corrective action plan to 
inform the public of the nature and extent of the alleged substantial 
product hazard and refund, repair or other actions being taken by the 
firm. Id.
    A Corrective Action Plan differs from a ``Consent Order Agreement'' 
which is also a voluntary agreement but has an ``admission of 
jurisdictional facts'' and contains an ``acknowledgment that any 
interested person may bring an action pursuant to section 24 of the 
CPSA . . . to enforce the order and obtain appropriate injunctive 
relief.'' See 16 C.F.R. Sec. 1115.20(b). The CPSC can also pursue 
compulsory remedial actions when voluntary agreements in the form of a 
Corrective Action Plan or Consent Order Agreement cannot be reached.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                            Nancy A. Cowles
    Question 1. How would compliance program-related requirements in 
Corrective Action Plans improve the voluntary recall process?
    Answer. Many companies have compliance programs in place. It gives 
them the opportunity to find and address problems in their process and 
avoid recalls as well as injuries from an unsafe product. However, 
absent this focus, we see recalls and injuries from products that 
better internal controls could have kept off the market. Compliance 
programs help companies design safer products, catch potential hazards 
sooner, and respond more quickly when a recall occurs. All of this will 
improve the voluntary recall process.
    At KID, we would also recommend that that internal program extend 
through completion of a recall--tracking compliance with already 
announced recalls and putting into place measures that will result in a 
more complete recall.

    Question 2. What, if any, additional information about product 
recall rates should companies make publicly available?
    Answer. In doing our annual report on children's product recalls, 
we use the Freedom of Information Act (FOIA) process to obtain 
information on recalled products. The monthly Corrective Action Plan 
report contains much information that would be helpful to policymakers, 
consumers and industry in measuring compliance and recall 
effectiveness. Companies report on recall participation, consumer 
contact, both incoming and outgoing, and injury and incident reports 
post recall. All of the information, if available publically would give 
us a better picture of the effectiveness of individual recalls, but 
also what measures (such as e-mails to consumers) seem to result in a 
higher participation rate. That information is most useful in the 
aggregate for research purposes, but would be helpful to see for 
individual recalls as well. In the hearing, Commissioner Buerkle 
mentioned the importance of the death and injury after recall included 
in these reports. Sharing publically would encourage consumers to look 
for recalled products in their homes and comply with the steps needed 
to make the product safe or remove it from use.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Richard Blumenthal to 
                            Nancy A. Cowles
    Question. Do you believe that the voluntary recall process is 
effective in its current form? Are consumers getting notice of recalls? 
How would the proposed rule help protect consumers and get potentially 
dangerous and defective products out of the hands of consumers?
    Answer. As strong new safety standards, required by the Consumer 
Product Safety Improvement Act of 2008, go into effect, we are seeing a 
decrease in recalls. That is a very good thing. However, we are not 
seeing recalls themselves increase in effectiveness. A recall is 
meaningless if it does not get the product out of the hands of 
consumers and alert them to the hazard.
    As reported in our report (A Decade of Data: An In-depth Look at 
2014 and a Ten-Year Retrospective on Children's Product Recalls--
February 2015), fewer than 5 percent of children's products in 
consumers' hands that were recalled in 2013 can be accounted for 
through the current system CPSC maintains of monthly corrective action 
reports. That is not good and we need to work together to improve that 
statistic. We also need greater access to information to see if there 
have been deaths or injuries after a recall that might warrant a 
stronger effort to retrieve the item. All that is kept secret from the 
public. Better research is needed to see if consumers are hearing about 
recalls. Response rates seem to indicate that even if they are, the 
messages are not motivating them to take action. Marketing experts at 
the recalling firm have the information on how many `touches' a 
consumer needs with a message before they act. They need to use that 
same information and same methods to retrieve unsafe products after a 
recall.
    The proposed rule on voluntary recalls and corrective action plans 
is warranted and will provide a new measure of safety for consumers. In 
particular, the rule would allow the CPSC to use its years of 
experience in developing corrective action plans to make them more 
effective and eliminate delays that currently occur when details that 
should not be negotiable take days, weeks, or months to negotiate. It 
would allow the CPSC and recalling firms to more effectively use new 
tools such as social media to reach consumers. By making the agreements 
legally binding, CPSC can better ensure that the plan will be carried 
out in a timely manner and in the manner that was negotiated.

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