[The following report was filed by Susan Maphis, a regular contributor to the Upscale Baby Blog and fan of homemade products threatened by the CPSIA]

Imagine a world where handmade children’s items are scarce and parents cannot buy used children’s clothing; where sellers of used children’s products are subject to fines of $100,000. In this world, entrepreneurs are forced out of business and lose their livelihoods. Imagine, therefore, a world in which the Consumer Product Safety Improvement Act of 2008 (CPSIA) is allowed to go into affect as written on February 10th.

The CPSIA has been met with frustration and confusion by many sellers of handmade and used children’s products. This act affects sellers of all products intended for children under 12 years of age. It has the potential to significantly impact a broad range of participants in the children’s product industry, including independent craftspeople, thrift stores, consignment shops and stay-at-home moms who supplement their family’s income by selling handmade children’s items.

Furthermore, product testing and liability insurance costs for many small businesses could skyrocket, fueling speculation that many small businesses will shut their doors and entrepreneurs – particularly stay-at-home moms - will be prohibited from selling handmade or used clothing online. Heather Flottmann owner and designer of the Liliputians children’s clothing line believes that her “livelihood is threatened with extinction.” She adds, “my business is thriving despite the current economy. CPSIA will change that. It will put me out of business if not amended.”

Last year, in response to the identification of lead contamination in Chinese products, Congress decided to overhaul consumer protection laws for the first time in 20 years. Few would argue that children’s product safety is not worth pursuing, but many small business owners feel penalized for the mistakes of Chinese manufacturers. Stacey Kannenberg, a publisher of children’s books, summarized this popular sentiment, “I understand that products need to be safe, but let’s start with the products that are made overseas first!”

If the CPSIA goes into effect as written, it would become illegal to sell children’s products containing more than 600 million parts per million (ppm) total lead – this threshold would decrease to 300 million ppm on August 14, 2009. It would require mandatory testing and certification of products intended for children under 12 years old and new labeling that indicates the manufacturer, date and location of production and additional product information.

Organizations, including Etsy.com, the Handmade Toy Alliance and the National Association of Retail and Thrift Shop, have called for changes to the law. Some have proposed amending the law to allow component testing, rather than unit testing. A component testing requirement would allow sellers to prove that each component of their products has been certified and avoid costly certification of the finished product. Several organizations have suggested that handmade children’s items be exempt from the law. This would enable resale shops and private citizens to sell handmade items at garage sales, consignment shops and online stores.

The CPSIA would impose product registration requirements on buyers of durable nursery products, such as cribs and strollers, to facilitate the decimation of recall notices. The law would prohibit sale of toys and products, such as teethers containing pthalates. Violations are punishable by a $100,000 fine per violation, with a maximum fine of $15,000,000 for repeat offenders.

As a partial reprieve, the Consumer Product Safety Commission (CPSC) voted to exempt electronic goods and products with embedded lead as well as gemstones, wool, cotton, silk, and pearls from mandatory lead testing. This exemption will likely go into effect after a 30 day public comment period.

On January 9th, the CPSC issued a press release stating that the CPSIA will not require certification of products already in inventory, but it will remain illegal to sell items that exceed the lead limits. The catch is that resellers may be required to determine the lead content of products produced before the act was signed. Without expensive testing many sellers may be forced to scrap their inventory. For example, the testing cost for a small consignment shop could be $50,000.

For more information about the CPSIA visit our CPSIA Resources page.