CONGRESSWOMAN ELISE STEFANIK
H.R. 4501 is expected to be considered on the floor of the House on Wednesday, December 8, 2010, under a motion to suspend the rules, requiring a two-thirds majority vote for passage. The legislation was introduced on January 21, 2010 by Rep. Anthony Weiner (D-NY). The Committee on Energy and Commerce approved the bill by voice vote on July 15, 2010.
H.R. 4501 would require the adoption of return policies by businesses that purchase precious metals from consumers.
The bill would prohibit purchasers of precious metals from selling or refining an item of jewelry or precious metal until the seller has accepted the purchaser’s offer to buy the item for a specific price. The bill also would require purchasers to return the jewelry or precious metal to the seller if the purchaser’s offer is declined and to insure the shipment of returned items.
The Federal Trade Commission (FTC) would be required to develop regulations to carry out these new requirements. The new requirements would take effect within 60 days of the bill’s enactment.
Under the bill, a violation would be treated as an unfair or deceptive act or practice in violation of FTC regulations. Any person who violates the legislation would be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act.
The legislation’s sponsor, Rep. Anthony Weiner (D-NY), has accused companies that purchase precious metals, such as gold, from consumers of engaging in fraudulent activities by charging high markups for the goods. Rep. Weiner has said that some of these companies are selling their products for as much as 200 percent of the actual melt value of the gold.
Some Members may be concerned that H.R. 4501 would represent new federal regulation of the private sector. No current federal law expressly regulates return policies—an area usually regulated by states, e.g., California Civil Code section 1723, which requires posting of return policies, and state “lemon” laws, which often give a window of time in which a purchased car can be returned.
The Congressional Budget Office (CBO) estimates that implementing H.R. 4501 would not affect spending subject to appropriation. The bill could increase civil penalties and thus affect federal revenues, but CBO estimates that such effects would not be significant in any year. Enacting H.R. 4501 would not affect direct spending and the bill contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act.