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February 19, 2019

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New York City Considers Ban on Restaurants, Retailers From Refusing to Accept Cash

A bill to ban restaurant and retail establishments in New York City from going cashless has been introduced in the New York City Council.

The bill’s sponsor, Council Member Ritchie Torres, introduced the measure amid a growing number of retail establishments adopting credit or debit card-only business models. He asserts that the practice of not accepting cash is racially exclusionary.

Fine for Refusing to Accept Cash

Intro. 1281 would prohibit a “food-service establishment or a retail establishment, as policy, to refuse to accept payment in cash from consumers.”

Violating the prohibition would result in a fine of not more than $250 for a first violation, and not more than $500 for each succeeding violation. The New York City Department of Consumer Affairs would be responsible for enforcement and the fines would take effect 120 days after Intro. 1281 becomes law.

Issues with Cash, Issues with Credit

The number of cashless operations in New York City is growing. Merchants say their key reasons for going cashless are increased efficiency and fewer health risks. Paper currency and coins necessitate cash registers, safes, sorting, counting, security, and frequent trips to the bank. Advocates for cashless operations also assert that paper bills carry pathogens that cause ailments, including acne and salmonella poisoning. Going cashless has become part of restaurants’ and retailers’ business models. Transportation providers also have adopted the policy. For example, the state of New York does not accept cash at many of its bridges, tunnels, and toll roads. If Intro. 1281 passes, it could change the way many businesses operate in New York City.

Torres asserts that the ban is necessary to stop the exclusion of lower-income communities of color from what should be an open and free market. Black and Hispanic households are more likely than white households to be “unbanked,” meaning no one in those households possesses a checking or savings account, according to data from the FDIC. “The cashless marketplace sends an exclusionary message — that the impoverished, the homeless, the underbanked, the undocumented need not apply,” Torres said in an interview about the bill. He also said, “I think we need to ask ourselves as a city, is that the kind of de facto discrimination we’re okay with sanctioning in the marketplace?”

Next Steps

The Council’s Committee on Consumer Affairs and Business Licensing will need to hold a public hearing on the bill before it goes to the City Council for a vote. The bill is expected to face opposition from the food service industry, which continues to see rising costs for doing business in New York City, as well as in the state. If the bill passes in the City Council, it likely will become law. Mayor Bill de Blasio said in December that, although he had not yet read the legislation, it “has merit.”

Jackson Lewis P.C. © 2019

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Jonathan L. Bing, New York, Government Relations, Jackson Lewis Law firm
Principal

Jonathan L. Bing is a Principal in the New York City and Albany, New York, offices of Jackson Lewis P.C.

Mr. Bing represents clients in a broad range of advocacy including advancing legislation in the New York State Legislature and New York City Council; securing funding from State and City budgets for non-profit organizations; advising on cutting through the “red tape” of government, and, defending clients against investigations by the New York State Department of Financial Services and Attorney General. Representative clients include the...

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Alissa M. Yohey, Corporate lawyer, Jackson Lewis
Principal

Alissa M. Yohey is a Principal in the Albany, New York, office of Jackson Lewis P.C. Her practice focuses on hospitality law, corporate law, transactional law, and lobby law compliance.

Ms. Yohey’s hospitality practice encompasses advising clients on alcohol beverage laws, state and local permits required for the operation of hospitality businesses, and violations matters.

On behalf of alcohol beverage industry clients, including restaurants, bars, hotels, caterers, cruise lines, airlines, liquor stores, wholesalers, manufacturers and other businesses, Ms. Yohey assists clients in efficiently navigating the complex state and federal alcohol beverage laws and licensing processes. Her experience in this area encompasses a broad array of issues, including, but not limited to, new retail and wholesale liquor licenses, renewals, corporate changes, approvals for establishment alterations, 500-foot hearings, community board meetings, permits for offsite special events, warehouse permits, declaratory rulings, disciplinary matters, brand label approval, post-licensing regulatory compliance, alcohol beverage marketing promotions, state and federal label and packaging compliance, and distribution issues.

Ms. Yohey assists clients in obtaining the necessary licenses and permits required to operate a hospitality business, including Sales and Use Tax certificates, health permits, sign permits, cabaret licenses, and outdoor dining permits. She also represents clients before various state and local tribunals with respect to violations matters, including New York City Health Department, Building Department and FDNY violations.

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Government Relations Director

Ellen M. Gustafson is a Government Relations Director in the Albany and New York City, New York, offices of Jackson Lewis P.C.

Ms. Gustafson joins the firm from former New York City Council Member Dan Garodnick's office and brings a wealth of knowledge and experience to the New York City budget and legislative processes, as well as community outreach. In addition to managing the capital and discretionary budget allocations for the office, Ms. Gustafson created a plan to obtain more pre-k seats in the district, resulting in more than 900...

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