Payment Choice Act of 2025
- Bill Number
- H.R. 1138
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-02-07: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-07-10T08:06:22Z
AI-Generated Summary
Purpose
The Payment Choice Act of 2025 aims to guarantee that U.S. currency (cash) is accepted as legal tender for payments at physical retail locations across the United States. It emphasizes consumers' right to use cash for in-person purchases, countering trends where businesses might prefer digital payments.
Key Provisions
- Mandatory Cash Acceptance: Retail businesses that accept in-person payments at physical locations must accept cash for transactions up to and including $500. This includes businesses handling phone, mail, or online orders if they also process payments on-site.
- Price Equality: Businesses cannot charge higher prices to customers paying with cash compared to those using other methods (e.g., cards).
- Exceptions:
- Temporary issues like system failures or lack of change to make for customers.
- Businesses may instead offer on-site devices that convert cash to prepaid cards, provided there are no fees for using the device or card, no minimum deposit over $1, no collection of personal information, and funds do not expire (except for limited inactivity fees after 12 months of no use, capped at one per month with clear disclosures).
- Bill Denominations: For the first 5 years after enactment, businesses are not required to accept $50 bills or larger. After 5 years, the Secretary of the Treasury must issue rules specifying acceptable denominations, but must at minimum require acceptance of $1, $5, $10, and $20 bills.
- Enforcement Mechanism:
- Aggrieved customers can send a written notice to the business detailing the violation, giving 45 days to correct it.
- If unresolved, customers can file a civil lawsuit in federal or state court for injunctions (court orders to stop the practice), actual damages (or $250 minimum if lower), and civil penalties up to $500 for first offenses or $1,500 for repeats.
- Courts may award attorney's fees up to $3,000 to prevailing parties (non-government), appoint free attorneys in some cases, and allow Attorney General intervention for public interest cases.
- In states with stronger consumer protections, local enforcement must be attempted first (with a 30-day wait).
- Rulemaking and Non-Preemption: The Treasury Secretary must issue rules to implement the law, including possible additional exceptions. The law does not override state, local, tribal, or territorial laws that provide greater consumer protections.
Significant Changes to Existing Law
- Adds a new Section 5104 to Subchapter I of Chapter 51 in Title 31 of the U.S. Code (which deals with coin and currency), explicitly prohibiting retail refusal of cash payments—a requirement not previously mandated at the federal level.
- Builds on the existing legal tender status of U.S. currency (under 31 U.S.C. § 5103), which declares it valid for debts but did not previously compel private businesses to accept it for retail sales.
- Introduces a structured enforcement process with notice, cure periods, and civil remedies, shifting from voluntary compliance to federally enforceable obligations.
Potential Impacts
- On Citizens: Enhances access for the unbanked or underbanked population (about 4-5% of U.S. households without bank accounts), ensuring they can participate in everyday commerce without needing digital payment options. May reduce fees associated with card transactions for consumers.
- On Government Agencies: The Treasury Department gains rulemaking authority and potential oversight in enforcement, though primary action is through private lawsuits rather than federal agencies. State and local authorities may handle initial complaints in areas with existing laws.
- On Businesses: Requires operational changes, such as handling cash securely and training staff, potentially increasing costs for small retailers. Larger chains might face more lawsuits if non-compliant.
- On International Relations: Minimal direct impact, as it focuses on domestic retail; however, it could indirectly affect foreign visitors or businesses by standardizing cash acceptance in U.S. commerce.
Main Stakeholders Affected
- Consumers: Especially those relying on cash, including low-income individuals, seniors, and immigrants without credit cards.
- Retail Businesses: All brick-and-mortar sellers of goods/services accepting in-person payments, from small shops to large chains.
- Financial Institutions: Indirectly affected, as promoting cash use might slow the shift to digital payments and prepaid card services.
- Government Entities: U.S. Treasury (for rules and oversight), state/local consumer protection agencies, and the Department of Justice (via Attorney General intervention).
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens the practical enforcement of legal tender laws without altering their core definition; civil remedies empower individuals but limit penalties to avoid overburdening courts. The non-preemption clause respects federalism by allowing states to impose stricter rules.
- Constitutional: Aligns with Congress's authority under the Commerce Clause to regulate interstate economic activity, including retail payments. No apparent First Amendment issues, as it regulates commercial conduct rather than speech.
- Political: Signals a pushback against "cashless" policies amid debates on financial inclusion and privacy (cash avoids transaction tracking). Bipartisan sponsorship (from both parties) suggests broad appeal, but could spark debates on business autonomy versus consumer rights in an increasingly digital economy.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (25)
Rep. Norcross, Donald [D-NJ-1], Rep. Garcia, Sylvia R. [D-TX-29], Rep. Kustoff, David [R-TN-8], Rep. Beatty, Joyce [D-OH-3], Rep. Smith, Christopher H. [R-NJ-4], Rep. Ivey, Glenn [D-MD-4], Rep. Davidson, Warren [R-OH-8], Rep. Gottheimer, Josh [D-NJ-5], Rep. Fields, Cleo [D-LA-6], Rep. Rutherford, John H. [R-FL-5], Rep. Stutzman, Marlin A. [R-IN-3], Rep. Sherman, Brad [D-CA-32], Rep. Moore, Tim [R-NC-14], Rep. Huizenga, Bill [R-MI-4], Rep. Sessions, Pete [R-TX-17], Rep. Kean, Thomas H. [R-NJ-7], Rep. Barr, Andy [R-KY-6], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Taylor, David J. [R-OH-2], Rep. Case, Ed [D-HI-1], Rep. Houlahan, Chrissy [D-PA-6], Rep. Meeks, Gregory W. [D-NY-5], Rep. Cleaver, Emanuel [D-MO-5], Rep. Williams, Nikema [D-GA-5], Rep. Salazar, Maria Elvira [R-FL-27]
Recent Actions
- 2025-02-07: Referred to the House Committee on Financial Services.
- 2025-02-07: Introduced in House
- 2025-02-07: Introduced in House
Bill Versions
- Payment Choice Act of 2025 — issued 2025-02-07 — PDF (9 pages)