Payment Choice Act of 2025

Bill Number

S. 2326

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-07-17: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Last Updated

2026-06-11T17:06:24Z

AI-Generated Summary

Purpose

The Payment Choice Act of 2025 aims to protect consumers' ability to use cash as payment at physical retail locations across the United States. It reinforces that U.S. currency is legal tender (meaning it must be accepted to settle debts) and ensures retail businesses cannot refuse cash for everyday purchases, promoting financial inclusion for those without bank accounts or credit cards.

Key Provisions

• Cash Acceptance Requirement: Retail businesses that sell goods or services to the public at physical locations and accept in-person payments must take cash for transactions up to $500. They cannot charge higher prices to cash-paying customers compared to those using other methods like cards.
• Exceptions to the Rule:
• Temporary issues, such as a cash register breakdown or not having enough change on hand.
• Businesses can offer on-site devices that convert cash to prepaid cards, but these must be free to use, have no minimum deposit over $1, not collect personal information, and have no expiration or usage fees (except limited inactivity fees after 12 months of no use, clearly disclosed).
• Large Bill Policy: For the first 5 years after enactment, businesses are not required to accept $50 bills or larger. After that, the Secretary of the Treasury must issue rules requiring acceptance of $1, $5, $10, and $20 bills, with potential rules for other denominations.
• Enforcement Mechanism:
• Customers can send a written notice to the business detailing the violation, giving 45 days to correct it.
• If unresolved, customers can sue in federal or state court for an injunction (court order to stop the practice), actual damages (or at least $250 if lower), and civil penalties ($500 for first offense, up to $1,500 for repeats).
• Courts may appoint free lawyers for low-income plaintiffs, award attorney fees up to $3,000 to winners, and allow the U.S. Attorney General to join cases of public importance.
• In states with stronger consumer laws, local enforcement must be tried first (with a 30-day wait).
• Rulemaking and Reporting:
• The Treasury Secretary can create rules for additional exceptions and implementation.
• The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) must submit annual reports to Congress on ATM locations and numbers owned by insured banks and credit unions, to track cash access.

Significant Changes to Existing Law

• Adds a new section (5104) to Title 31 of the U.S. Code, which deals with money and finance. Previously, while U.S. currency is designated as legal tender under existing law (Section 5103), there was no specific federal mandate requiring private businesses to accept it for retail sales—businesses could often refuse cash in favor of digital payments.
• Introduces private enforcement rights for consumers, shifting from voluntary compliance to potential lawsuits, and adds federal oversight through Treasury rulemaking.
• Does not override stronger state or local laws, allowing for variation (e.g., some cities already ban cashless stores).

Potential Impacts

• On Citizens: Empowers consumers, especially the unbanked or underbanked (about 5% of U.S. households without bank accounts), by ensuring cash access for small purchases. Reduces discrimination against cash users but may increase minor inconveniences if businesses add prepaid card options.
• On Government Agencies: Treasury gains rulemaking authority; FDIC and NCUA face new annual reporting duties on ATMs, potentially improving data on cash infrastructure. Courts may see more consumer lawsuits, increasing workload.
• On Businesses: Retailers must adapt payment systems or face penalties and suits, possibly raising costs for handling cash (e.g., security, change). Small businesses might benefit from clearer rules but could struggle with compliance.
• International Relations: No direct impact, as the bill focuses on domestic currency use.

Main Stakeholders Affected

• Consumers: Primary beneficiaries, gaining enforceable rights to pay with cash.
• Retail Businesses: Must comply, including chains, small shops, and service providers at physical locations.
• Financial Institutions: Banks and credit unions report on ATMs, potentially influencing cash distribution networks.
• Government Entities: Treasury (rulemaking), FDIC/NCUA (reporting), Department of Justice (enforcement intervention), and courts (handling cases).

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens consumer protection laws by creating a private right of action (allowing individuals to sue directly), similar to civil rights statutes. Avoids preemption of state laws, preserving federalism. Enforcement relies on civil penalties rather than criminal charges, keeping it accessible but potentially leading to a rise in small-claims-style litigation.
• Constitutional: Aligns with the Commerce Clause (Congress's power over interstate trade) by regulating retail practices affecting national commerce. No apparent free speech or due process issues, as it targets discriminatory practices without restricting business expression.
• Political: Addresses growing "cashless society" trends amid privacy and inclusion concerns, appealing to bipartisan support (introduced by senators from different parties). Could spark debates on balancing innovation (e.g., digital payments) with equity, especially for low-income or elderly populations reliant on cash. The 5-year grace period on large bills eases implementation while planning for broader acceptance.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Cramer, Kevin [R-ND]

Cosponsors (1)

Sen. Fetterman, John [D-PA]

Recent Actions

• 2025-07-17: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
• 2025-07-17: Introduced in Senate

Bill Versions

• Payment Choice Act of 2025 — issued 2025-07-17 — PDF (10 pages)