Congress members introduce bills to protect cash

Dive Brief:

• Last week, Congress members introduced legislation in the House and Senate to ban businesses from rejecting cash for in-person retail purchases. The bipartisan bills revive prior proposals.
• The bills were introduced in the House by Reps. Donald Payne Jr. (D-N.J.) and John Rose (R-Tenn.), and in the Senate, by Sen. Bob Menendez (D-N.J.) and Sen. Kevin Cramer (R-N.D.). They are designed to protect Americans who are unbanked and underbanked and who rely on cash to pay for necessities, as well as to preserve the right of consumers to choose to pay with cash, say the bills’ authors.
• “Cash is the only option available for millions of Americans to pay for food, housing and other essentials,” Payne said in a June 14 press release regarding the introduction of the Payment Choice Act.

Dive Insight:

Payne introduced similar bills in 2019 and 2021. The legislation, which also won bipartisan support in the past, passed the House on two occasions. The revived House bill now also has two more co-sponsors.

Despite businesses leaning away from cash during the COVID-19 pandemic, cash still accounts for nearly 20% of all payments in the U.S., according to a 2021 report by the U.S. Federal Reserve Bank of San Francisco.

Payne worries that a cashless society will leave out unbanked and underbanked households in the U.S. The Federal Deposit Insurance Corporation (FDIC) has estimated that 5.9 million U.S. households, or about 4.5% of households, were unbanked in 2021, meaning they didn’t have a bank or credit union checking or savings account.

Payne also cited concerns about the privacy of digital payments, particularly with respect to data collection, fraud and identity theft. He said he believes cash is also necessary because of the possibility of natural disasters that could knock out a power grid and leave people without the means to make or accept digital payments.

The text of the Senate bill lays out requirements for businesses to accept bills up to $20 and to prohibit charges for cash payments. It also provides for no-fee options to convert cash to a payment card and proposes penalties of up to $1,500 for each violation.

The congressional legislative proposal joins a growing body state and municipal laws protecting cash payments in Colorado, New Jersey, New York City, Philadelphia, San Francisco and Washington, D.C.

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