My name is Meryl Chertoff, and I direct the Georgetown Project on State and Local Government Law and Policy. I am also an Adjunct Professor at Georgetown University Law Center. Thank you for the opportunity to testify in favor of HB 21-1048.

“We are cash-free,” signs blast at some Colorado businesses. Who is hurt? Disproportionately, it is the unbanked and people of color. But it hurts everyone, because the more transactions we are forced to do cashless, the less privacy each one of us has.

Having five dollars in your pocket gives a person dignity.  But today, five dollars in your pocket no longer may buy you a cup of coffee, and it’s not because prices have gone up at the corner coffee shop. It is because an increasing number of businesses in Colorado and around the country won’t accept cash. The tech and financial services industries have decided they would prefer that the legal currency of the United States be unwelcome in a growing number of commercial establishments

Around the country, advocates for consumer protection are responding with measures to protect Americans from yet another effort to make some of us second-class citizens, and to harvest data from everyone else.

New York City and Philadelphia banned cashless businesses over the last two years. Washington, DC just did, in a measure that will take effect at the end of the current public health emergency. New Jersey, Connecticut and Rhode Island passed cashless business bans last year. In Massachusetts, there has been a law on the books since 1978 that says that retailers cannot discriminate against a cash buyer by requiring the use of credit.

In 2017, the FDIC reported that roughly 8.4 million U.S. households were unbanked, and an additional 24 million were underbanked. The current economic crisis will increase the number of unbanked households. Those households don’t have credit and debit cards.

According to a 2015 FDIC survey, in Colorado that year, 4.4% of residents were unbanked, and 19.1% were underbanked, for a total of almost a quarter of Coloradans.

While being low-income is not itself a category protected by federal civil rights laws, the fact that an increasing number of businesses are going cashless means that they effectively discriminate against Blacks, Latinos and the undocumented.

It also contributes to a sense that some are less equal citizens than others. Cash is an equalizer. It gives anyone holding it dignity. A cashless model creates two tiers of retail: those reserved exclusively for the banked and those where everyone else can shop, eat and receive basic services. Plain and simple, cashless perpetuates inequality.

The current COVID-19 pandemic should in no way deter passage of this bill. Public health experts confirm that handling cash is an extremely low-risk activity. It is more important than ever to allow households to buy essential items like groceries using any form of payment they can access. Nor should the Committee think that requiring retail businesses to accept cash somehow discourages people from opening bank accounts. The simple truth is that without a minimum balance most banks charge monthly fees, fees that many living at the margin simply cannot afford, particularly since the economic crunch precipitated by COVID-19.

Then there is the question of privacy. It is no surprise that the drivers of cashless business are largely big tech.  For each transaction you do without cash, more data is harvested about your location, purchasing habits, and preferences. A cash purchase– be it of coffee, cigarettes or medicine– allows you to maintain your anonymity. The swipe of a card lets someone, somewhere know what you have just bought.  And if you think this sort of surveillance society based on your cashless purchases is far off, consider that in China, purchases are monitored and become part of the social credit score that determines your access to a variety of benefits.

Cashless means that the real world increasingly mirrors the online one: where every click, or in this case every swipe, allows the marketers to build a more granular profile of who you are.  Many measures will be needed to end that. HB 21-1048 is one.