Released: May 18, 2022

Consumer Action applauds lawmakers’ move to preserve cash payments

The Payment Choice Act passes out of the U.S. House Financial Services Committee

Washington, DC—Consumer Action, a member of the Consumer Choice in Payment Coalition (CCPC), joined in applauding today’s passage of the Payment Choice Act of 2022 (HR 4395) out of the U.S House of Representatives Committee on Financial Services. The bill preserves consumers' ability to pay with cash for goods and services that they purchase at brick-and-mortar retailers.

“We believe it is critical to ensure that cash remains a universally available payment option for consumers throughout the nation,” said Consumer Action's Linda Sherry. According to Consumer Action and other payment-choice advocates, cashless businesses lock out many millions of unbanked and underbanked Americans, while eroding the fundamental consumer freedom to rely upon cash for payment anywhere in the country.

The CCPC is a broad-based group of consumer advocates, businesses, and nonprofit organizations that joined forces more than two years ago to promote and advocate for maintenance of the continued availability of cash as a payment option for the nation’s consumers.

In a letter this week to the Financial Services Committee urging approval of the bill, the Consumer Federation of America also pointed out that paying with cash allows consumers to safeguard the privacy of their personal financial information from abuse by data miners and marketers, and from compromise resulting from data breaches or thefts.  

Noncash transactions, the letter said, “generate vast amounts of data, recording the time, date, location, amount, and subject of each consumer’s purchase, which are available to digital marketers and advertisers who are engaged in developing and refining increasingly sophisticated techniques to identify and target potential customers.”

The CCPC has emphasized that cash payment always remains available, even in the wake of natural disasters, including hurricanes, tornadoes, wildfires, and other catastrophic events that often result in power outages or other systems failures that render digital transactions, credit and debit cards, and other noncash payment methods inoperable, sometimes for weeks or months at a time.

“We greatly appreciate the committee’s endorsement of cash as a vital ongoing payment option for consumers that will help us maintain the strength of our economy,” said Bruce W. Renard, executive director of the National ATM Council, and a co-shair of the Coalition. “Enactment of the Payment Choice Act of 2022,” he added, “will help keep the U.S. dollar strong and stable here at home, and preserve its status abroad as the world’s leading fiat currency.  Maintaining universal acceptance of cash provides all Americans with a low-cost, user-friendly, private, and reliable payment option of immense benefit to us all, individually and collectively.”

The Payment Choice Act, sponsored by Rep. Donald M. Payne, Jr. (D-N.J.), and 48 cosponsors, both Democratic and Republican, applies to transactions in amounts less than $2,000 that occur at any retailer’s physical location, including telephone, mail, or internet-based transactions for which the retailer accepts in-person payments.  In addition to requiring acceptance of cash, the bill prohibits charging higher prices to cash-paying customers than are charged to other customers.

Exceptions are provided in the event that a retailer temporarily has insufficient cash on hand to make change, or experiences a systems failure that temporarily prevents it from processing cash payments. 

The bill does not apply to retailers that provide customers a device that, at no cost to the customer, converts cash into a prepaid card, so long as the device does not require a minimum deposit of more than one dollar, there is no fee for use of the cards that it provides, and the device collects no personal identifying information from the customer.  The bill further provides that it does not require that retailers accept any currency in denominations larger than $50.

Enforcement of alleged violations would be by a civil action brought by any injured person in state or federal court.  A companion bill is expected to be introduced in the Senate by Sens. Bob Menendez (D-N.J.) and Kevin Cramer (R-N.D.).

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Through education and advocacy, Consumer Action fights for strong consumer rights and policies that promote fairness and financial prosperity for underrepresented consumers nationwide.