[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Proposed Rules]
[Pages 8499-8502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5043]



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FEDERAL TRADE COMMISSION

16 CFR Part 405


Trade Regulation Rule on Misbranding and Deception as to Leather 
Content of Waist Belts

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Trade Commission (``Commission'') announces the 
commencement of a rulemaking proceeding for the trade regulation rule 
on Misbranding and Deception as to Leather Content of Waist Belts 
(``Leather Belt Rule'' or ``Rule''). The proceeding will address 
whether or not the Leather Belt Rule should be repealed. The Commission 
invites interested parties to submit written data, views, and arguments 
on how the Rule has affected consumers, businesses and others, and on 
whether there currently is a need for the Rule. This document includes 
a description of the procedures to be followed, an invitation to submit 
written comments, a list of questions and issues upon which the 
Commission particularly desires comments, and instructions for 
prospective witnesses and other interested persons who desire to 
participate in the proceeding.

DATES: Written comments must be submitted on or before April 4, 1996.
    Notifications of interest in testifying must be submitted on or 
before April 4, 1996. If interested parties request the opportunity to 
present testimony, the Commission will publish a document in the 
Federal Register stating the time and place at which the hearings will 
be held and describing the procedures that will be followed in 
conducting the hearings. In addition to submitting a request to 
testify, interested parties who wish to present testimony must submit, 
on or before April 4, 1996, a written comment or statement that 
describes the issues on which the party wishes to testify and the 
nature of the testimony to be given.

ADDRESSES: Written comments and requests to testify should be submitted 
to Office of the Secretary, Federal Trade Commission, Room H-159, Sixth 
Street and Pennsylvania Avenue, NW., Washington, DC 20580, telephone 
number (202) 326-2506. Comments and requests to testify should be 
identified at ``16 CFR Part 405--Comment--Leather Belt Rule'' and ``16 
CFR Part 405--Request to Testify--Leather Belt Rule,'' respectively. If 
possible, submit comments both in writing and on a personal computer 
diskette in Word Perfect or other word processing format (to assist in 
processing, please identify the format and version used). Written 
comments should be submitted, when feasible and not burdensome, in five 
copies.

FOR FURTHER INFORMATION CONTACT:
Lemuel Dowdy or Edwin Rodriguez, Attorneys, Federal Trade Commission, 
Division of Enforcement, Bureau of Consumer Protection, Sixth Street 
and Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-2981 or 
(202) 326-3147.

SUPPLEMENTARY INFORMATION:

I. Introduction

    Pursuant to the Federal Trade Commission Act (``FTC Act''), 15 
U.S.C. 41-58, and the Administrative Procedure Act, 5 U.S.C. 551-59, 
701-06, by this Notice of Proposed Rulemaking (``NPR'') the Commission 
initiates a proceeding to consider whether the Leather Belt Rule should 
be repealed or remain in effect.\1\ The Commission is undertaking this 
rulemaking proceeding as part of the Commission's ongoing program of 
evaluating trade regulation rules and industry guides to determine 
their effectiveness, impact, cost and need. This proceeding also 
responds to President Clinton's National Regulatory Reinvention 
Initiative, which, among other things, urges agencies to eliminate 
obsolete or unnecessary regulations.

    \1\ In accordance with section 18 of the FTC Act, 15 U.S.C. 57a, 
the Commission submitted this NPR to the Chairman of the Committee 
on Commerce, Science, and Transportation, United States Senate, and 
the Chairman of the Subcommittee on Commerce, Trade and Hazardous 
Materials, United States House of Representatives, 30 days prior to 
its publication in the Federal Register.
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II. Background Information

    The Leather Belt Rule was promulgated on June 27, 1964, to remedy 
deceptive practices involving misrepresentations about the leather 
content of waist belts that are not offered for sale as part of a 
garment. The Rule prohibits representations that belts not made from 
the hide or skin of an animal are made of leather or that belts are 
made of a specified animal hide or skin when such is not the case. In 
addition, the Rule requires that belts 

[[Page 8500]]
made of split leather, and ground, pulverized or shredded leather bear 
a label or tag disclosing the kind of leather of which the belt is 
composed. The Rule also requires that non-leather belts having the 
appearance of leather bear a tag or label disclosing their composition 
or disclosing that they are not leather.
    As part of its continuing review of its trade regulation rules to 
determine their current effectiveness and impact, the Commission 
published a Federal Register notice \2\ on March 27, 1995,\3\ asking 
questions about the benefits and burdens of the Rule to consumers and 
industry. The request for comments elicited ten comments.\4\ Six 
comments were from consumers \5\ and four from leather or leather goods 
manufacturers.\6\

    \2\ 60 FR 15725. The Commission's Office of the Secretary has 
assigned document number B172445 to this notice. All comments 
submitted in response to this notice are sequentially numbered and 
filed under number B172445 in the public record, starting with 
number B17244500001. Any request for copies or inspection of the 
comments to this notice should refer to document number B172445.
    \3\ On the same date, the Commission published a Federal 
Register notice soliciting comment on its Industry Guides for 
luggage, shoes, and Ladies' handbags. 60 FR 15724. See Guides for 
the Luggage and Related Products Industry, 16 CFR Part 24; Guides 
for Shoe Content Labeling and Advertising, 16 CFR Part 231; and 
Guides for the ladies' Handbag Industry, 16 CFR Part 247.
    \4\ For purposes of this NPR, we cite these ten comments using 
the name of the commenter and the sequential number of the comment 
in parentheses, without repeating the B172445 prefix.
    \5\ The following is a list of the consumer commenters: Stephen 
Toso (1), Ross E. Kettering (2), Matt Anderson (3), Marilyn Raeth 
(4), James A. McGarry (5), and Lenna Mae Gara (8).
    \6\ The following is a list of comments received from industry 
members: Enger Kress Company (manufactures mens and ladies wallets 
and occasionally leather belts) (6), Cromwell leather Company, Inc. 
(produces leather that is sold to producers of finished leather 
goods) (7), Humphreys, Inc. (manufacturer of leather belts) (9), and 
Leather Industries of America, Inc. (trade association representing 
the leather tanning industry) (10).
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    The consumer comments expressed continuing support for the Rule, 
contending that its disclosure requirements help consumers make 
informed purchasing decisions. One industry comment supported the Rule 
for the same reason.\7\ These commenters stated that the Rule helps 
consumers identify belts made of different types of cowhide leather, 
such as top grain leather, and split leather.\8\ In addition, the 
comments stated that the disclosures required by the Rule allow 
consumers to identify belts made of vinyl, plastic, polyurethane, paper 
and other synthetic materials that can be made to look like leather.\9\ 
The consumer commenters stated that, without the required disclosures, 
consumers cannot be certain of the quality of the leather used in 
belts, or that belts are made of leather at all.\10\

    \7\ Enger Kress (6).
    \8\ Toso (1), Kettering (2), Anderson (3), Raeth (4), McGarry 
(5), and Gara (6).
    \9\ Toso (1) states that the use in belts of synthetic materials 
that look like leather makes it difficult to determine the true 
leather content of belts. The comment gives as an example the use of 
``P.U. Glove Leather'' where the ``P.U.'' stands for polyurethane. 
Kettering (2) also opposes rescinding the Leather Belt Rule because 
of the difficulty consumers face in identifying belts that are made 
of real leather when manufacturers try to pass off vinyl or other 
materials as leather; the comment states that the Rule's disclosures 
allow consumers to make informed choices by identifying the leather 
contents of belts. Anderson (3), p.2.
    \10\ Toso (1) states that the discount stores are growing and 
that they will be tempted to deceive consumers by claiming that 
belts are made a higher quality leather than they actually are. 
Raeth (4) expresses the concern that manufacturers may pass off 
cheaper, inferior goods to consumers if the Rule is eliminated.
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    Three comments recommended that the Commission amend the Rule to 
allow the use of the term ``bonded leather'' when a leather good is 
made of ground, pulverized, or shredded leather that is bonded with an 
adhesive.\11\ Seven comments supported the continuation of the Leather 
Belt Rule as it currently exists.\12\ Two comments from industry 
members expressed support for consolidating the Rule and the Guides 
into one set of guidelines that apply to all finished leather 
goods.\13\

    \11\ Cromwell (7), Humphreys (9), and Leather Industries (10). 
These commenters recommend that the Rule include a prohibition on 
the use of the term ``bonded leather'' unless at least 75% of the 
fibers in the product are leather. This issue has been addressed in 
the proposed Guides, which allow the use of the term ``bonded 
leather'' if certain required disclosures are made.
    \12\ Toso (1), Kettering (2), Anderson (3), Raeth (4), McGarry 
(5), Enger Kress (6), and Gara (8).
    \13\ Cromwell (7) and Leather Industries (10).
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    On September 18, 1995, the Commission announced that, to eliminate 
unnecessary duplication, it had rescinded the three separate guides for 
various leather products \14\ and sought comment on one set of 
proposed, consolidated guidelines: the Guides for Select Leather and 
Imitation Leather Products. \15\ Because the proposed Guides would 
cover belts, the Commission published, on the same day, an Advance 
Notice of Proposed Rulemaking (``ANPR'') stating that it had 
tentatively determined that a separate Leather Belt Rule is no longer 
necessary, and seeking comments on the proposed repeal of the Rule.\16\ 
In accordance with section 18 of the FTC Act, 14 U.S.C. 57a, the ANPR 
was sent to the Chairman of the Committee on Commerce, Science, and 
Transportation, United States Senate, and the Chairman of the 
Subcommittee on Commerce, Trade and Hazardous Materials, United States 
House of Representatives.

    \14\ 60 FR 48027.
    \15\ 60 FR 48056. In particular the Commission sought comment as 
to whether the consolidated Guides should cover leather, or 
imitation leather, products in addition to shoes, luggage, handbags, 
and belts. The deadline for comment on the proposed Guides was 
October 18, 1995, but it was subsequently extended until November 
15, 1995. 60 FR 54316 (Oct. 23, 1995).
    \16\ 60 FR 48070. The Commission's Office of the Secretary has 
assigned document number B183789 to the ANPR. All comments submitted 
in response to the ANPR are sequentially numbered and filed under 
document number B183789 in the public record, starting with number 
B18378900001. The comments submitted in response to the ANPR are 
identified in this NPR by the name of the commenter and the 
sequential number, without repeating the document number.
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    The ANPR comment period closed on October 18, 1995. The Commission 
received two comments in response to the ANPR.\17\ One of these 
comments supports retention of the existing Leather Belt Rule. The 
commenter believes that rescission of the Rule may decrease the 
accuracy of the labeling of waist belts, making the selection and 
purchase of belts more difficult for consumers.\18\ The other comment 
supports consolidating the Rule into one set of guidelines governing 
disclosures of the leather content of leather goods, and recommends 
that the term ``bonded leather'' be allowed by those guidelines.\19\

    \17\ The comments were submitted by Larry E. Gundersen (1), a 
consumer, and Humphreys Inc. (2), a manufacturer of leather belts.
    \18\ Gundersen (1).
    \19\ Humphreys Inc. (2). See footnote 11 above regarding the 
term ``bonded leather.''
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    After reviewing the comments submitted, the Commission has 
determined that the benefits of the Rule are retained through the 
inclusion of belts in the proposed Guides for Select Leather and 
Imitation Leather Products. While repealing the Rule would eliminate 
the Commission's ability to obtain civil penalties for any future 
misrepresentations of the leather content of belts, the Commission has 
determined that it would not seriously jeopardize the Commission's 
ability to act effectively. Any significant problems that might arise 
could be addressed on a case-by-case basis, administratively under 
Section 5 of the FTC Act, 15 U.S.C. 45, or through court actions under 
Section 13(b), 15 U.S.C. 53(b), in federal district court. Prosecuting 
serious or knowing misrepresentations in district court allows the 
Commission to seek injunctive relief as well as equitable remedies, 
such as redress or disgorgement.
    The Commission believes that the proposed Guides serve the public 

[[Page 8501]]
    interest better than maintaining a Rule for leather belts and separate 
Guides for various other leather products. Accordingly, the Commission 
has determined that a separate Leather Belt Rule is not necessary. The 
Commission therefore seeks comments on the proposed repeal of the 
Leather Belt Rule.

III. Rulemaking Procedures

    The Commission finds that the public interest will be served by 
using expedited procedures in this proceeding. First, there do not 
appear to be any material issues of disputed fact to resolve in 
determining whether to repeal the Rule. Second, the use of expedited 
procedures will support the Commission's goal of eliminating obsolete 
or unnecessary regulations without an undue expenditure of resources, 
while ensuring that the public has an opportunity to submit data, views 
and arguments on whether the Commission should repeal the Rule.
    The Commission, therefore, has determined, pursuant to 16 CFR 1.20, 
to use the procedures set forth in this notice. These procedures 
include: (1) Publishing this Notice of Proposed Rulemaking; (2) 
soliciting written comments on the Commission's proposal to repeal the 
Rule; (3) holding an informal hearing, if requested by interested 
parties; (4) obtaining a final recommendation from staff; and (5) 
announcing final Commission action in a notice published in the Federal 
Register.

IV. Invitation To Comment and Questions for Comment

    Interested persons are requested to submit written data, views or 
arguments on any issue of fact, law or policy they believe may be 
relevant to the Commission's decision on whether to repeal the Rule. 
The Commission requests that commenters provide representative factual 
data in support of their comments. Individual firms' experiences are 
relevant to the extent they typify industry experience in general or 
the experience of similar-sized firms. Commenters opposing the proposed 
repeal of the Rule should explain the reasons they believe the rule is 
still needed and, if appropriate, suggest specific alternatives. 
Proposals for alternative requirements should include reasons and data 
that indicate why the alternatives would better protect consumers from 
unfair or deceptive acts or practices under section 5 of the FTC Act, 
15 U.S.C. 45.
    Although the Commission welcomes comments on any aspect of the 
proposed repeal of the Rule, the Commission is particularly interested 
in comments on questions and issues raised in this Notice. All written 
comments should state clearly the question or issue that the commenter 
is addressing.
    Before taking final action, the Commission will consider all 
written comments timely submitted to the Secretary of the Commission 
and testimony given on the record at any hearings scheduled in response 
to requests to testify. Written comments submitted will be available 
for public inspection in accordance with the Freedom of Information 
Act, 5 U.S.C. 552, and Commission regulations, on normal business days 
between the hours of 8:30 a.m. to 5:00 p.m. at the Federal Trade 
Commission, Public Reference Room, Room H-130, Federal Trade 
Commission, Sixth Street and Pennsylvania Avenue, N.W., Washington, DC 
20580, telephone number (202) 326-2222.

Questions

    (1) Is the misrepresentation of the leather contents of belts by 
manufacturers and distributors of belts still a significant problem in 
the marketplace?
    (2) What benefits do consumers derive from the Rule?
    (3) Should the Rule be kept in effect or should it be repealed?
    (4) How would repealing the Rule affect the benefits experienced by 
consumers?
    (5) How would repealing the Rule affect the benefits and burdens 
experienced by firms subject to the Rule's requirements?
    (6) Are there any other federal or state laws or regulations, or 
private industry standards, that eliminate the need for the Rule?
    (7) Are the proposed Guides for Select Leather and Imitation 
Leather Products likely to provide all or most of the benefits now 
provided by the Rule?
    (8) How, if at all, would repeal of the Rule, and the resulting 
elimination of civil penalty enforcement actions now available to 
enforce it, likely affect the accuracy of the advertising, labeling, or 
marketing of leather belts?

V. Requests for Public Hearings

    Because there does not appear to be any dispute as to the material 
facts or issues raised by this proceeding and because written comments 
appear adequate to present the views of all interested parties, a 
public hearing has not been scheduled. If any person would like to 
present testimony at a public hearing, he or she should follow the 
procedures set forth in the DATES and ADDRESSES sections of this 
notice.

VI. Preliminary Regulatory Analysis

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-11, requires 
an analysis of the anticipated impact of the proposed repeal of the 
Rule on small businesses.\20\ The analysis must contain, as applicable, 
a description of the reasons why action is being considered, the 
objectives of and legal basis for the proposed action, the class and 
number of small entities affected, the projected reporting, 
recordkeeping and other compliance requirements being proposed, any 
existing federal rules which may duplicate, overlap or conflict with 
the proposed action, and any significant alternatives to the proposed 
action that accomplish its objectives and, at the same time, minimize 
its impact on small entities.

    \20\ Section 22 of the FTC Act, 15 U.S.C. 57b-3, also requires 
the Commission to issue a preliminary regulatory analysis relating 
to proposed rules when the Commission publishes a notice of proposed 
rulemaking. The Commission has determined that a preliminary 
regulatory analysis is not required by section 22 in this proceeding 
because the Commission has no reason to believe that repeal of the 
Rule: (1) will have an annual effect on the national economy of 
$100,000,000 or more; (2) will cause a substantial change in the 
cost or price of goods or services that are used extensively by 
particular industries, that are supplied extensively in particular 
geographical regions, or that are acquired in significant quantities 
by the Federal Government, or by State or local governments; or (3) 
otherwise will have a significant impact upon persons subject to the 
Rule or upon consumers.
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    A description of the reasons why action is being considered and the 
objectives of the proposed repeal of the Rule have been explained 
elsewhere in this Notice. Repeal of the Rule would appear to have 
little or no effect on any small business. The Commission is not aware 
of any existing federal laws or regulations that would conflict with 
repeal of the Rule.
    In light of these reasons, the Commission certifies, pursuant to 
section 605 of RFA, 5 U.S.C. 605, that if the Commission determines to 
repeal the Rule that action will not have a significant impact on a 
substantial number of small entities. To ensure that no substantial 
economic impact is being overlooked, however, the Commission requests 
comments on this issue. After reviewing any comments received, the 
Commission will determine whether it is necessary to prepare a final 
regulatory flexibility analysis.

VII. Paperwork Reduction Act

    The Leather Belt Rule imposes third-party disclosure requirements 
that constitute ``information collection requirements'' under the 
Paperwork 

[[Page 8502]]
Reduction Act, 44 U.S.C. 3501 et seq. Accordingly, repeal of the Rule 
would eliminate any burdens on the public imposed by these disclosure 
requirements.

VIII. Additional Information for Interested Persons

A. Motions or Petitions

    Any motions or petitions in connection with this proceeding must be 
filed with the Secretary of the Commission.

B. Communications by Outside Parties to Commissioners or Their Advisors

    Pursuant to Rule 1.18(c) of the Commission's Rules of Practice, 16 
CFR 1.18(c), communications with respect to the merits of this 
proceeding from any outside party to any Commissioner or Commissioner's 
advisor during the course of this rulemaking shall be subject to the 
following treatment. Written communications, including written 
communications from members of Congress, shall be forwarded promptly to 
the Secretary for placement on the public record. Oral communications, 
not including oral communications from members of Congress, are 
permitted only when such oral communications are transcribed verbatim 
or summarized at the discretion of the Commissioner or Commissioner's 
advisor to whom such oral communications are made, and are promptly 
placed on the public record, together with any written communications 
relating to such oral communications. Memoranda prepared by a 
Commissioner or Commissioner's advisor setting forth the contents of 
any oral communications from members of Congress shall be placed 
promptly on the public record. If the communication with a member of 
Congress is transcribed verbatim or summarized, the transcript or 
summary will be placed promptly on the public record.

List of Subjects in 16 CFR Part 405

    Advertising, Clothing, Labeling, Leather and leather products 
industry, Trade practices.

    Authority: 15 U.S.C. 41-58.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-5043 Filed 3-4-96; 8:45 am]
BILLING CODE 6750-01-M