A cashless economy may not be in Oregon’s future.

Lawmakers are weighing whether to require businesses to accept cash.

The proposal has attracted opposition from business lobbyists, who testified Monday that retailers have many legitimate reasons not to accept cash, including security and efficiency.

But policies and practices that appear legitimate at first glance can still be exclusionary, said one of the bill’s top sponsors, Rep. Janelle Bynum, D-Clackamas.

“What we’re trying to address is essentially what some people would call, ‘back-door discrimination,’” Bynum told The Oregonian/OregonLive before the House Judiciary hearing on the bill.

House Bill 4107, backed by many Democrats and three Republicans, would also outlaw discrimination based on someone’s hair style or type. Both types of bans -- on certain hairstyles or using cash -- have outsize impacts on people of color, Bynum and others testified.

People of color are 5 times more likely than white people not to have access to banks, Bynum said. More than 16 percent of African American families and 14 percent of Latino families were unbanked compared to 3 percent of white families in 2017, Bynum said, citing an FDIC study.

Nkenge Harmon Johnson, chief executive of Urban League of Portland, told lawmakers that when she encounters businesses that don’t accept cash, she asks why. The reply is often that it’s easier, she said.

“Well then, the question is, ‘Easier for whom?’” Harmon Johnson said.

Bynum said the bill was also driven by data-privacy concerns.

“It’s the ability for people to buy the things are just basic things -- food, a cup of coffee -- without having to enter into a third-party financial relationship,” she said.

If it passes, the measure would take effect in July 2021. But industry groups raised concerns about how the bill could affect them.

Anthony Smith, the Oregon director for the National Federation of Independent Business, said his group opposed the bill. He said some business owners actually prefer customers pay with cash. But other operators rarely make cash sales.

Deciding what type of payments to accept is driven by concerns about efficiency, safety and security and customer experience, he said.

“Those are all reasons why a business, for very legitimate reasons, might go cashless,” Smith said.

He also questioned why lawmakers want to exempt most public bodies and government agencies from the requirement to accept cash.

The law would also exclude roadside stands, mobile food carts and some airport businesses past security. It would not apply to purchases of fuel, rental deposits or sales that happen over the internet or by phone.

It would allow other businesses to refuse coins to cover transactions of $100 or more, or not to accept $50 or $100 bills.

Two insurance industry lobbyists testified that by law, insurance agencies could not accept cash for certain transactions. They asked lawmakers to add exemptions covering their industry into the bill.

Democratic Rep. Akasha Lawrence Spence said many businesses in her district, which covers downtown Portland, have gone cashless to prevent theft. She asked if the bill could be amended to take such concerns into account.

Bynum said she was willing to work on the bill “to making sure we get to a ‘yes.’”

Bynum said she believes the measure levels the playing field for businesses and customers. As a business owner herself, she said she wants to make sure everyone who walks into her McDonald’s restaurants can make a purchase using what they have in their pocket.

“As technology evolves, I think we have to stick with our values,” Bynum said.

-- Molly Young

myoung@oregonian.com

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