[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                       CASHED OUT: HOW A CASHLESS
                     ECONOMY IMPACTS DISADVANTAGED
                        COMMUNITIES AND PEOPLES

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 14, 2021

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 117-53
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-196 PDF                 WASHINGTON : 2021                     
          
-----------------------------------------------------------------------------------  


                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York           BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            ANN WAGNER, Missouri
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            ROGER WILLIAMS, Texas
BILL FOSTER, Illinois                FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio                   TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
RITCHIE TORRES, New York             JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts      BRYAN STEIL, Wisconsin
ALMA ADAMS, North Carolina           LANCE GOODEN, Texas
RASHIDA TLAIB, Michigan              WILLIAM TIMMONS, South Carolina
MADELEINE DEAN, Pennsylvania         VAN TAYLOR, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   PETE SESSIONS, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts

                   Charla Ouertatani, Staff Director
              Subcommittee on Oversight and Investigations

                        AL GREEN, Texas Chairman

EMANUEL CLEAVER, Missouri            TOM EMMER, Minnesota Ranking 
ALMA ADAMS, North Carolina               Member
RASHIDA TLAIB, Michigan              BARRY LOUDERMILK, Georgia
JESUS ``CHUY'' GARCIA, Illinois      ALEXANDER X. MOONEY, West Virginia
SYLVIA GARCIA, Texas                 DAVID KUSTOFF, Tennessee
NIKEMA WILLIAMS, Georgia             WILLIAM TIMMONS, South Carolina, 
                                         Vice Ranking Member
                           
                           
                           C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    October 14, 2021.............................................     1
Appendix:
    October 14, 2021.............................................    29

                               WITNESSES
                       Thursday, October 14, 2021

Breyault, John, Vice President, Public Policy, 
  Telecommunications, and Fraud, National Consumers League (NCL).     4
Garcia, Norma, Policy Counsel and Director, Mission Economic 
  Development Agency (MEDA)-San Francisco........................     6
Ruggia, Beverly Brown, Director, Financial Justice Program, New 
  Jersey Citizen Action..........................................     8
Valdez, Alex, Member, Colorado House of Representatives..........     9
Zywicki, Todd, Senior Fellow, Center for Monetary and Financial 
  Alternatives, Cato Institute; and Foundation Professor of Law, 
  George Mason University Antonin Scalia School of Law...........    11

                                APPENDIX

Prepared statements:
    Breyault, John...............................................    30
    Garcia, Norma................................................    43
    Ruggia, Beverly Brown........................................    50
    Valdez, Hon. Alex............................................    53
    Zywicki, Todd................................................    56

              Additional Material Submitted for the Record

Garcia, Hon. Jesus ``Chuy'':
    Written responses to questions for the record from John 
      Breyault...................................................    69
Garcia, Hon. Sylvia:
    Written responses to questions for the record from Norma 
      Garcia.....................................................    72

 
                       CASHED OUT: HOW A CASHLESS
                     ECONOMY IMPACTS DISADVANTAGED
                        COMMUNITIES AND PEOPLES

                              ----------                              


                       Thursday, October 14, 2021

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12:04 p.m., 
via Webex, Hon. Al Green [chairman of the subcommittee] 
presiding.
    Members present: Representatives Green, Cleaver, Adams, 
Tlaib, Garcia of Texas, Williams of Georgia; Emmer, Mooney, 
Kustoff, and Timmons.
    Ex officio present: Representative Waters.
    Chairman Green. The Oversight and Investigations 
Subcommittee will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time. Also, without 
objection, members of the full Financial Services Committee who 
are not members of this subcommittee are authorized to 
participate in today's hearing.
    As a reminder, I ask all Members to keep themselves muted 
when they are not being recognized by the Chair, to minimize 
disturbances while Members are asking questions of our 
witnesses. The staff has been instructed not to mute Members, 
except when a Member is not being recognized by the Chair and 
there is inadvertent background noise.
    Members are reminded that all House rules relating to order 
and decorum apply to this remote hearing. Members are also 
reminded that they may participate in only one remote 
proceeding at a time. If you are participating today, please 
keep your camera on, and if you choose to attend a different 
remote proceeding, please turn your camera off.
    If Members wish to be recognized during the hearing, please 
identify yourself by name to facilitate recognition by the 
Chair.
    Members are reminded that your questioning is limited to 5 
minutes. You should be able to see a timer on your screen that 
will indicate how much time you have left, and a chime will 
sound at the end of your time.
    The title of today's hearing is, ``Cashed Out: How a 
Cashless Economy Impacts Disadvantaged Communities and 
Peoples.''
    I now recognize myself for 5 minutes, make that 4 minutes, 
to give an opening statement.
    Few things are more fundamental to the sustenance of life 
than the very simple act of buying a bag of groceries. Yet in 
recent years, the emergence of so-called cashless businesses, a 
trend accelerated by the pandemic, has caused me to ask just 
how simple that act really is if a merchant refuses to accept 
the U.S. dollar as payment. The inability to access food is but 
one example of how a cashless economy would adversely impact 
many, including persons who are unbanked, of low wealth, 
differently abled, homeless, or otherwise disadvantaged.
    As today's expert witnesses will illuminate, cashless 
commerce hampers equal access to other essential goods, 
services, and transactions that many of us take for granted. 
Unequal access to full economic participation is not the only 
downside. There are serious privacy and security threats on 
cashless commerce for virtually all consumers, and very real 
consequences about which we will learn more today.
    But against this dispiriting background, there is good news 
to be found. It is the overwhelming bipartisan agreement, if 
you will, by leaders in States, localities, and even here in 
Congress that a totally cashless economy should not become a 
reality. In purple, blue, and red States alike, policymakers 
agree that the U.S. dollar in its physical form must continue 
to be accepted as legal tender.
    [inaudible] our witnesses today come from jurisdictions 
that have enacted cashless bans at the State and local levels. 
I look forward to hearing from each of them regarding the 
lessons learned from the frontline experiences that they have 
shared, and we hope that in so doing, we will get a better 
understanding of what a cashless economy can do to persons who 
are not as fortunate as some of us.
    In closing, I thank Subcommittee Member Sylvia Garcia for 
her leadership on the Payment Choice Act of 2021. I am honored 
to join many of my colleagues on both sides of the aisle as a 
co-sponsor of the bill and its proposed solution to many of the 
ills about which we will learn more today.
    The Chair now recognizes the ranking member of the 
subcommittee, Mr. Emmer, for 5 minutes for an opening 
statement.
    Mr. Emmer. Thank you, Chairman Green. Thank you for hosting 
this thoughtful hearing as we consider the implications of a 
cashless economy and how those implications affect certain 
communities and small businesses, and how they do so in an open 
and free society.
    In a world without cash, transactions are mediated by 
financial institutions. Of course, this intermediation provides 
efficiency and convenience, but I must stress that cash is a 
tool that was used even by ancient civilizations to 
specifically avoid intermediation and preserve values of 
individual liberty and privacy.
    Cash is essential to an open and free society--4.7 percent 
of the U.S. adult population is unbanked, meaning they don't 
have credit, they don't have a credit card or a debit card, and 
a larger population is underbanked. The FDIC found that one of 
the primary reasons people are underbanked or unbanked is 
because they do not trust their institutions. While electronic 
transactions have exponentially increased during the pandemic, 
Americans are also storing physical cash on their selves at a 
higher rate than previous years.
    This is all to say that cash is clearly an important tool 
in any open and free society, but we are also in a digital age 
where electronic transactions often just make more sense.
    With that being said, government should never be in the 
business of telling people and businesses, large or small, what 
forms of payment they should accept. Sometimes, holding cash 
can put the business and its employees in danger or it can be 
more expensive. My office has received feedback from small 
businesses across the country that, for the most part, prefer 
not to hold cash and would oppose any Federal law requiring 
them to accept cash as a payment.
    So, how do we adapt to the digital economy while 
maintaining the privacy elements of cash? Decentralized 
technology like cryptocurrency and stablecoins can offer this 
solution. Because these tools run on distributed ledger 
technology, they are open, permissionless, and private. This 
allows citizens to continue to live in an open society while 
that society becomes more and more digitized.
    I implore my colleagues to look to financial technology as 
a solution. Financial technology is a solution to extending 
financial services to the unbanked and the underbanked. It is a 
solution to adapting to an increasingly digital society while 
maintaining individual liberty and autonomy. And it is also a 
solution that not only offers more affordability to consumers, 
but keeps consumers, small businesses, and employees safe.
    Mr. Chairman, again, I appreciate the opportunity to engage 
in the discussion today, and I look forward to our witnesses' 
testimonies. Thank you, and I yield back the remainder of my 
time.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes the Vice Chair of the 
subcommittee, the gentlewoman from Georgia, Ms. Williams, for 1 
minute.
    Ms. Williams of Georgia. Thank you, Mr. Chairman.
    Today's topic is personal for me. I am a Congresswoman who 
has been unbanked, and I have been that person trying to make 
it to payday. I have been that person who needed a couple 
hundred bucks but couldn't get access to lending. I have been 
that person who has had to rely on cash to get by.
    Too many of my constituents remain unbanked or underbanked, 
and this is an equity issue. In 2019, for instance, the FDIC 
reported that 13.8 percent of Black individuals were unbanked, 
compared to only 2.5 percent of White individuals. We have to 
do all that we can to help those most marginalized get access 
to responsible financial services. We have a lot of work to do 
on this issue, but meanwhile, we can't take a step backward by 
cutting off the only option that some people have: cash.
    Today, I look forward to discussing how we can preserve 
financial inclusion as the digital economy expands. Our 
constituents are counting on us to get this right, and I am 
determined to hold the door open for more people like me to 
make it from a place of financial hardship to a place like 
Congress.
    Mr. Chairman, I yield back.
    Chairman Green. The gentlelady yields back.
    Please allow me now to welcome each of our witnesses, and I 
am pleased to introduce this panel.
    We have with us today: John Breyault, the vice president of 
public policy, telecommunications, and fraud at the National 
Consumers League; Norma Garcia, a policy counsel and director 
at the Mission Economic Development Agency in San Francisco; 
Beverly Brown Ruggia, a financial justice program director at 
New Jersey Citizen Action; Representative Alex Valdez, a member 
of the Colorado House of Representatives; and Todd Zywicki, a 
professor of law at George Mason University Antonin Scalia 
School of Law, and a senior fellow at the Cato Institute.
    Our witnesses are reminded that your oral testimony will be 
limited to 5 minutes. You should be able to see the timer on 
your screen that will indicate how much time you have left, and 
a chime will go off at the end of your time. I would ask that 
you be mindful of the timer, and quickly wrap up your testimony 
if you hear a chime, so that we may be respectful of both the 
witnesses' and the subcommittee members' time.
    And without objection, your written statements will be made 
a part of the record.
    Once the witnesses finish their statements, each Member 
will have 5 minutes to ask questions. I do want to remind the 
Members that you should ask your questions and receive your 
answers within this 5-minute period to be respectful of the 
time of others. So, please ask questions and receive answers 
within the 5-minute period to the extent that you can.
    Mr. Breyault, you are now recognized for 5 minutes to give 
an oral presentation of your testimony.

  STATEMENT OF JOHN BREYAULT, VICE PRESIDENT, PUBLIC POLICY, 
 TELECOMMUNICATIONS, AND FRAUD, NATIONAL CONSUMERS LEAGUE (NCL)

    Mr. Breyault. Good afternoon, Mr. Chairman, Mr. Ranking 
Member, and members of the subcommittee. My name is John 
Breyault, and I am the vice president of public policy, 
telecommunications, and fraud for the National Consumers League 
(NCL).
    Founded in 1899, NCL is the nation's pioneering consumer 
and worker advocacy organization. Our nonprofit mission is to 
advocate on behalf of consumers and workers in the United 
States and abroad. I appreciate the opportunity to provide the 
subcommittee with NCL's perspective on the growing use of peer-
to-peer (P2P) payment apps and the need for stronger consumer 
protections from fraud and erroneous payments for users of 
these services.
    As you will hear from my fellow witnesses, a cashless 
economy is one where far too many consumers, particularly those 
with low incomes, and especially those who come from 
historically marginalized communities, are likely to be left 
behind. To be clear, a cashless economy is one that comes with 
real costs for these vulnerable consumers, such as fewer retail 
choices, higher prices for everyday goods and services, more 
surveillance, and less access to the banking system.
    Emblematic of the impact of a cashless economy on 
vulnerable consumers is the explosive growth of peer-to-peer, 
or P2P, payment apps, like PayPal's Venmo, Square's cash, and 
the banks' Zelle service. By one estimate, roughly 4 in 5, or 
79 percent, of Americans have used mobile payment apps. By 
2023, more than $1 trillion will likely be transacted via these 
platforms.
    Unfortunately, the features that make P2P services 
appealing--low cost, nearly instantaneous payments all made via 
mobile app--are also key contributors to high fraud rates. In 
2020, the FTC received nearly 62,000 complaints from consumers 
who sent money to fraudsters via payment apps or similar 
services, with a total reported loss of $87 million. These 
complaint statistics, sobering as they may be, are just the tip 
of the iceberg. Analysts estimate that fraud rates on these 
platforms are 3 to 4 times higher than for traditional payment 
methods, such as debit or credit cards.
    P2P services are aware that scammers use their services to 
obtain funds from their victims, and while P2P services do 
employ technological measures and consumer education messaging 
to try and stop fraudulent transactions, there is a business 
incentive not to introduce too many security roadblocks in the 
payment process. If these platforms are making the decision to 
skew their services towards speed and convenience, at the 
expense of safety and security, they must take responsibility 
for those business choices.
    While no financial service is immune from fraud, 
protections for consumers who lose money on P2P apps to scams 
or even simple errors are sorely lacking. A big reason for this 
is a loophole in the Electronic Fund Transfer Act (EFTA) that 
excludes payments initiated by the consumer from the 
protections of unauthorized charges. This is also known as 
fraud in the inducement or victim-assisted fraud. This allows 
P2P services and banks to avoid liability for payments sent 
from consumers to scammers, even when such payments are the 
result of fraud.
    Similarly, when a consumer sends a payment in error, such 
as by entering the wrong email address into the app, the P2P 
platforms are not obligated to correct the error. Instead, they 
simply encourage the consumer to ask the unintended recipient 
to voluntarily send the money back. Unsurprisingly, this is no 
substitute for strong antifraud and error resolution 
protections.
    The end result of this loophole is that the liability risk 
for fraud is transferred from the platforms and banks to 
consumers themselves. The only recourse for many victims of 
fraud or errors committed via these apps is to throw themselves 
on the mercy of the banks or platforms and beg to be made 
whole. Unfortunately, thanks to the lack of legal protections, 
it is far too easy for the banks and P2P platforms to simply 
tell fraud victims that they are out of luck.
    This state of affairs is unacceptable for consumers. 
Billion-dollar banks and payment platforms are far more able to 
spread the costs of protecting consumers from errors and fraud 
across the system. By comparison, a single error or instance of 
fraud can be devastating to an individual consumer.
    To ensure the P2P apps are secure for their users and do 
not continue to be powerful tools for fraudsters, action by 
Congress is urgently needed. My written testimony includes a 
number of legislative actions to strengthen protections for 
consumers using P2P apps.
    In particular, I would like to urge Congress to pass 
legislation that expands the EFTA's definition of unauthorized 
electronic fund transfer to cover fraudulently induced 
payments, with ultimate liability resting with the institution 
that received the fraudulent payment. Doing so would give 
consumers confidence that they will be made whole if they are 
induced to send money to scammers via P2P services. It would 
also create a strong incentive for all stakeholders in the P2P 
payments ecosystem to make security a priority just as it is in 
the debit and credit card space.
    Chairman Green, Ranking Member Emmer, on behalf of the 
National Consumers League, thank you for your continuing work 
to protect consumers and for holding this hearing. I look 
forward to answering your questions.
    [The prepared statement of Mr. Breyault can be found on 
page 30 of the appendix.]
    Chairman Green. Thank you, Mr. Breyault.
    Ms. Garcia, you are now recognized for 5 minutes to give an 
oral presentation of your testimony.

STATEMENT OF NORMA GARCIA, POLICY COUNSEL AND DIRECTOR, MISSION 
        ECONOMIC DEVELOPMENT AGENCY (MEDA)-SAN FRANCISCO

    Ms. Garcia. Thank you very much, Chairman Green, and 
members of the subcommittee. My name is Norma Garcia, and I am 
the policy counsel for the Mission Economic Development Agency 
in San Francisco, California.
    Since 1973, the Mission Economic Development Agency has 
been advancing the mission towards creating equity for Latinos 
and immigrants seeking a better life. We are a Latino-led 
nonprofit organization that invests in the lives of our 
underserved Latino families through direct services, community 
development initiatives, and policy advocacy.
    You have asked me to focus my testimony on a few questions, 
and I will get to those now. You have asked for policy 
recommendations to protect consumers in marginalized 
communities from adverse implications of a cashless society, 
and I will say that because many of the community members we 
serve fall into several categories of vulnerability, as 
outlined in my written testimony, we do not support the idea of 
moving to a cashless economy. To do so would perpetuate a 
growing income inequality by making it harder for people who 
use cash and don't have access to credit and technology to 
effectuate a cashless payment.
    We cannot exclude a portion of the population from the 
economy, quite a large portion of the population. That is not 
good for our communities, that is not good for our country, and 
we must remain vigilant in ensuring that our economy is 
inclusionary and accessible to everyone.
    I do believe this committee is asking the right questions. 
You are asking us to consider the impact on the most vulnerable 
populations, and that is what we call essentially an equity 
impact analysis. It is kind of a corollary to an environmental 
impact analysis, and we think it is an essential piece of any 
policy proposal that is coming before us for consideration.
    So, what is the impact on the most-vulnerable communities? 
We can tell you that in San Francisco, my organization serves a 
highly vulnerable population that does not share equally in the 
economic boom that is San Francisco and Silicon Valley. In 
fact, due to growing income inequality, San Francisco's Latino 
community lives in one of the nation's ground zeroes for 
displacement of Latinos from a community they have called home 
for generations.
    We believe that a proper equity impact analysis demands 
that once it is determined that a particular policy will have a 
negative adverse impact, we need to decide that if it is not 
working, and it is going to adversely impact the most 
vulnerable, we should move on to other ideas. And, ideally, if 
there are other mitigating circumstances that are being 
considered in determining if there is a path forward, the 
communities that are most affected must be at the table.
    We need to find new ways to coexist with existing 
practices, like electronic payment options, in addition to cash 
payments. It is one way to protect consumers in those 
communities that are marginalized from having outside adverse 
implications.
    We are doing this in San Francisco. We passed an ordinance 
in 2019, and it is something that can serve as a model in other 
parts of the country. Essentially, we are talking about 
preserving cash as a payment option which can coexist with 
other payment options. We have identified the universe of 
businesses to which this applies. We have created reasonable 
parameters around any exceptions. We are educating businesses 
and community members about their rights and obligations, and 
we are creating effective mechanisms for monitoring and 
enforcing this new ordinance. This is super important, and we 
are happy to share this with you.
    On the impacts of a cashless society, I think other 
witnesses have clearly said this in a very effective way: We 
know that those who suffer most in a cashless society are 
immigrant communities, senior citizens, unbanked and/or 
unhoused persons, and others who are likely to depend on cash. 
And I think that one constituency that has not been mentioned 
is young people who may not be able to get a bank account but 
need to be able to transact in cash.
    I think I would like to move on, given that my time is 
running out.
    There are some other considerations that need to be taken 
into account, and one that has not been mentioned is that 
noncash systems are not always inherently reliable. They 
require connectivity. Power outages occur with regularity here 
in California. We know that when the power goes out, merchants 
can't take electronic payments, and cash only is the way to 
pay. With mobile wallets, phones must be charged. Pay-by-the-
minute accounts need to be topped off, which means that people 
need to have the resources to keep this going. And for low-
income communities, this may be particularly burdensome.
    The implications for small businesses, particularly 
minority-owned small businesses--I can tell you that in San 
Francisco's Mission District, the merchants that serve our 
community are used to dealing in cash because our community is 
used to dealing in cash. And so, these merchants know that if 
they want to have a successful business, they need to meet 
customers where they are, and they may well have incentives to 
deal in cash themselves as merchants to avoid any costs 
associated with electronic receipt of payments. They are able 
to keep prices lower that way. They are not passing those costs 
on to the consumer, and they are not in a position where they 
have to absorb the costs themselves.
    Some businesses can--
    Chairman Green. The gentlelady will have an opportunity to 
give additional comments. I am going to have to move on, but 
thank you for your testimony thus far.
    Ms. Garcia. Thank you. I appreciate the opportunity.
    [The prepared statement of Ms. Garcia can be found on page 
43 of the appendix.]
    Chairman Green. Thank you.
    Ms. Ruggia, you are now recognized for 5 minutes to give an 
oral presentation of your testimony.

STATEMENT OF BEVERLY BROWN RUGGIA, DIRECTOR, FINANCIAL JUSTICE 
               PROGRAM, NEW JERSEY CITIZEN ACTION

    Ms. Ruggia. Thank you, Chairman Green and members of this 
subcommittee, for the opportunity to testify. My name is 
Beverly Brown Ruggia, and I am the financial justice director 
for New Jersey Citizen Action, a Statewide nonprofit 
organization which has been working since 1984 for social, 
racial, and economic justice through advocacy, organizing, and 
community empowerment programs for low- and moderate-income New 
Jerseyans.
    I will be underscoring much of what has been said, and it 
is based on what we are experiencing in our State.
    In 2019, New Jersey passed bipartisan legislation to 
protect consumers' choice to use cash as payment for most 
retail purchases. The legislature acted because denying cash as 
a form of payment for goods and services discriminates against 
people who cannot afford or are unable to obtain noncash 
payment options. Additionally, the practice potentially 
subjects consumers to unnecessary costs, violations of privacy, 
and to cybersecurity risks.
    Cashless payment policies discriminate against communities 
of color and low-income customers disproportionately. As has 
been cited, the FDIC showed that 7.1 million Americans are 
unbanked or live in households where no one has a bank account. 
According to the study, almost 15 percent of African-American 
households and about 13 percent of Latino households are 
unbanked, compared with just 2 to 3 percent of White 
households.
    Another 24 million households are underbanked, meaning that 
at least one household member has a bank account but does not 
generally use credit cards or other traditional bank credit 
products. Indigenous and working-age disabled households and 
households with volatile income are also among the unbanked and 
underbanked at high rates.
    A 2018 Reveal news report demonstrated that redlining 
persists in this country and still denies millions of low- and 
moderate-income people, especially Black and Brown people, 
access to banking services and accounts. Even where possible, 
opening a bank account requires documents, which many low-
income and elderly people do not have. People experiencing 
homelessness usually cannot provide utility bills or other 
proof of address needed to open a bank account.
    Online banking services also require, as has been said, 
reliable and affordable internet access, which low- and fixed-
income people often cannot afford, and people for whom English 
is not their first language are more likely to be unbanked than 
native English speakers.
    But the main reason cited by 29 percent of the FDIC 
survey's respondents is not having enough money to maintain the 
minimum balances required to open and maintain a bank account. 
Cashless policies specifically penalize individuals and 
households who cannot afford a bank account, a credit card, and 
the consumer credit products needed to make noncash payments.
    The alternatives to credit cards, such as prepaid cards or 
mobile devices, are costly. A study by the Financial Health 
Network found that in 2018, unbanked and underbanked households 
spent $180 billion in fees and interest on nonbank financial 
products.
    Cashless payment policies can also pose practical barriers. 
One of Citizen Action's Board Co-Chairs is blind. She cannot 
use bank cards because the terminals are not accessible in 
design, lacking braille key pads and appropriate PIN security, 
for example. In other words, cashless policies exclude the 
most-vulnerable individuals and households among us who are not 
able or cannot afford to use anything but cash.
    The second-most popular reason cited in the FDIC survey of 
unbanked households was a distrust of the banking system. Bank 
card payments are not as private as cash payments. Point of 
sale systems give businesses and large companies access to 
personal and financial information. Cashless payments also 
force customers to expose themselves to potential identity 
theft and other forms of cyber fraud.
    So, it should be no surprise that another national study 
found that cash has been the preferred method for daily 
transactions among communities of color, whether they are 
banked or unbanked.
    Technology in banking and finance must expand financial 
equity and inclusion by providing choices and options that make 
personal financial management easier, more efficient, and safer 
for all consumers. Technology must not limit choices and 
perpetuate systemic inequities in our financial system that 
exclude and discriminate.
    Cashless payment policies amount to discriminatory retail 
redlining. Instead of a redline around a neighborhood, there 
are millions of redlines around individual customers shopping 
on Main Street every day which deny them access to goods and 
services despite having perfectly sufficient U.S. legal tender 
to spend.
    Thank you.
    [The prepared statement of Ms. Ruggia can be found on page 
50 of the appendix.]
    Chairman Green. Thank you for your testimony.
    State Representative Valdez, you are now recognized for 5 
minutes to give an oral presentation of your testimony.

STATEMENT OF STATE REPRESENTATIVE ALEX VALDEZ, MEMBER, COLORADO 
                    HOUSE OF REPRESENTATIVES

    Mr. Valdez. Good morning, Mr. Chairman, and thank you, 
members of the subcommittee. My name is Alex Valdez, and I am a 
State Representative from Colorado's House District 5, which 
encompasses downtown Denver.
    My district, like Denver's population, is heavily Latino. 
My district is 40-percent Latino, and Colorado's population as 
a whole is nearly 22-percent Latino. As a Latino 
Representative, the Chair of the Latino Caucus, and the Chair 
of the LGBTQ Caucus, as well as the Chair of the Energy and 
Environment Committee, I am more than familiar with how 
minority communities are affected by the policies we make on 
our everyday lives.
    During Colorado's 2021 legislative session, I sponsored 
House bill 21-1048, ``Concerning a Requirement that Retail 
Establishments Accept United States Currency for Purchases.'' 
House bill 21-1048 required retail establishments offering 
goods or services to accept U.S. currency as a form of payment 
for in-person transactions. Retail establishments that do not 
comply may be fined up to $250 per transaction.
    Throughout the stakeholder process, some exceptions were 
established--certain instances that retail establishments need 
not comply if the transaction is for a security deposit being 
placed on a credit card or if the retail establishment is a 
bank or a credit union. This was important for rental cars, et 
cetera.
    The catalyst for this bill came directly from the 
community. Marginalized communities within House District 5, 
and underbanked and underbanked Coloradoans in general were 
struggling to survive as the myth spread that COVID-19 spread 
on cash but not on credit or debit cards. Spread throughout the 
State, country, and the world, this war on cash is not a new 
concept, but one that we saw grow exponentially during the 
global health pandemic, adding even more strain to families 
having to navigate a tumultuous time. This attack on cash has 
long affected minority communities, creating inequalities in 
every facet of the economy.
    In 2017, 4.2 percent of Coloradoans did not have any sort 
of bank account, and 17.3 percent of Coloradoans were 
underbanked, which resulted in many having to use cash for 
everyday necessities. According to a 2017 Federal Deposit 
Insurance Corporation report, it was estimated that 25 percent 
of all American households are either underbanked or 
underserved. This is roughly 32 million households without a 
bank account or access to traditional banking systems, 
including debit and credit cards.
    To deny so many people their sole method of purchasing 
power is wrong, especially when a third of low-income 
qualifying individuals and 17 percent of Latinos countrywide 
use cash for all purchases. Cash usage is still prevalent and 
important throughout our society. There are large swaths of 
Coloradoans who still prefer to use cash.
    When crafting this bill, I spoke with a variety of folks 
about how this would impact them. Some were not able to buy 
their groceries at a local store and were forced to travel long 
distances to find establishments that accepted cash. Others had 
undocumented relatives who faced yet another barrier when 
denied cash purchases. On one occasion, I even attempted to pay 
with cash after having dinner with a friend and was told by the 
restaurant that they did not accept cash. I was lucky, I had a 
credit card I could use to pay, but those who don't are no less 
deserving of having a meal, buying groceries, or purchasing 
goods. In situations such as this, no person should be made to 
feel embarrassed, rejected, or judged based on their purchasing 
method.
    The policy solution to address this crisis is laid out in 
the sponsored bill. Putting an end to the ban on cash supports 
all members of our society, especially people of color, the 
elderly, undocumented folks, and the unhoused. As our economy 
continues to navigate and recover from the COVID-19 pandemic, 
it is critical to ensure that every person can fully 
participate in our economy. Cashless systems prevent this, 
sifting economic recovery and hindering healthy communities.
    Banning one of the simplest ways to pay--cash--is 
inequitable. Those who don't have a credit or debit card or a 
bank account should not be excluded. The millions of Americans 
who are underbanked have the right to participate in our 
economy to meet their basic needs.
    Our currency states that it is good for all debts, public 
and private, and it is my hope that you will advance 
legislation making that statement a reality.
    Thank you very much for your time today. I am excited to 
answer any questions the subcommittee may have.
    [The prepared statement of Mr. Valdez can be found on page 
53 of the appendix.]
    Chairman Green. Thank you very much.
    We will now hear from Professor Zywicki. You are recognized 
for 5 minutes to give an oral presentation of your testimony.

 STATEMENT OF TODD ZYWICKI, SENIOR FELLOW, CENTER FOR MONETARY 
  AND FINANCIAL ALTERNATIVES, CATO INSTITUTE; AND FOUNDATION 
PROFESSOR OF LAW, GEORGE MASON UNIVERSITY ANTONIN SCALIA SCHOOL 
                             OF LAW

    Mr. Zywicki. Thank you, Chairman Green, Ranking Member 
Emmer, and members of the subcommittee. My name is Todd 
Zywicki, and I am the George Mason University Foundation 
Professor of Law at the Antonin Scalia Law School, and a senior 
fellow of the Cato Institute. And during the 2020 year, I 
served as the Chair of the Consumer Financial Protection 
Bureau's (CFPB's) Task Force on Consumer Financial Law, which 
gave me a unique perspective on these issues, a unique 
perspective on consumer finance and financial protection, 
during a time of unprecedented challenges and unprecedented 
acceleration of these trends that we have seen with respect to 
the migration towards electronic payments over the last several 
years.
    Let me make clear at the outset that I am neither in favor 
of banning cash, nor am I in favor of requiring cash. I am 
sensitive to the issues here. I am very sensitive to the issues 
of financial inclusion, and the centerpiece of our CFPB task 
force report was how to increase financial inclusion so that 
nobody is left behind, and as we see this transition toward a 
more cashless society, to make sure nobody is left behind here 
also.
    But I am also aware of the advantages to consumers, to 
businesses, and to the economy from the developments that we 
have seen, and the developments that we saw this past year. It 
has been said that 6 months of time was telescoped into maybe 3 
years of accelerated transition during the past year during the 
pandemic with respect to electronic payments. But I think that 
this, like many other things--dealing with this is 
presumptively left to the market and to voluntary choices of 
consumers and businesses, unless there is compelling evidence 
to the contrary.
    We saw a similar transition during my own lifetime with the 
virtual elimination of checks, which were a very popular and 
ubiquitous and maybe the most important payment system for most 
people. And during our lifetime, we saw the phasing out of 
checks simply because of the cost of checks and the preferred 
convenience and cost of electronic payments.
    Let's make a couple of things clear at the outset, which 
is, first, I think that these trends we have seen during the 
past year are inevitable. They are going to continue, and I 
think, over time, we are going to continue to see a decline in 
the use of cash and an increase in the use of electronic 
payments. Generational change is supporting this, new entrance 
by businesses are supporting this, especially because a lot of 
the cost of accepting cash are fixed costs the legacy 
businesses have in terms of installing vaults, security 
systems, cash registers and the like.
    But at the same time, we also know that a lot of consumers 
are going to continue to want to use cash. A lot of businesses 
are going to continue to want to accept cash, especially larger 
legacy businesses who have made these investments. So I think 
at this point, there is no reason to intervene to either compel 
use of cash or to prohibit it.
    And I think the reason for these trends are clear. There 
are benefits to businesses, which quite clearly will trickle 
through to consumers. I detail these in my testimony, but the 
first is simply, it can be less expensive. The primary cost of 
cash, in addition to the capital start-up costs that I 
mentioned, are labor costs. As labor costs go up, cash is very 
labor-intensive. And as labor becomes more expensive, and we 
know we are in an economy right now with labor shortages, that 
increases the relative cost of handling cash. Payments are 
becoming faster and more convenient.
    Also, to state an obvious observation, cash is less 
hygienic, especially for food in food establishments, and that 
is why a lot of places banned or chose not to take cash at 
sandwich shops and the like.
    There are also benefits to consumers in terms of crime 
concerns and the like, and there are benefits to society in 
terms of reduced crime and tax evasion. And small businesses 
and new entrants can probably benefit the most.
    We should also recognize that there are benefits to even 
unbanked consumers, excluded consumers, from trying to increase 
access to electronic payments. Cash is not free. We have a lot 
of check cashers. They charge a lot. They have concerns about 
crime. Cash can be inconvenient. It can be difficult to obtain 
cash. You can have trouble--it is difficult to make online 
purchases and the like.
    And so my view is that rather than propping up cash, it 
would be better to look at what it is--the factors that are 
excluding consumers and promote greater competition and 
innovation to open and expand electronic payments to other 
consumers. I list several in my testimony.
    I think we should have broader credit union chartering to 
serve underserved communities. I think we need more industrial 
loan company chartering. I think fintech can help solve this 
problem. I think better competition and portability in bank 
accounts can do this. And I also think that a faster payment 
system that would allow checks to clear faster will help 
consumers very much as well, who rely on check cashers and the 
like.
    Thank you for your time, and I look forward to answering 
your questions.
    [The prepared statement of Mr. Zywicki can be found on page 
56 of the appendix.]
    Chairman Green. Thank you, Professor.
    It is now my honor to recognize the Chair of the full 
Financial Services Committee, the gentlewoman from California, 
Chairwoman Waters, for 5 minutes of questions.
    Madam Chairwoman, you are now recognized.
    Chairwoman Waters. Thank you so very much, and I certainly 
appreciate this hearing. This is very important.
    Millions of Americans still use cash as their primary 
method of payment, including disproportionately communities of 
colors, unhoused persons, the underbanked and unbanked, elderly 
persons, and immigrants without documentation, among others. 
Many businesses such as tech companies, restaurants, and stores 
are moving towards going cashless, and in some communities, 
such as communities with low-income or migrant populations, 
many stores are cash-only.
    Do you see the potential for economic segregation here 
where some consumers are economically shut out of making 
purchases in certain communities, possibly even where they live 
or work?
    Now, let me just segue a bit and say something. I am very 
much in support of innovation and looking toward the future and 
how we can expedite, how we can use the electronic 
opportunities that are available to us. However, let's talk 
about what is happening in the real world.
    I just referred to the underbanked and the unbanked. Let me 
tell you about the millions of people who work every day in 
different ways, some of whom are still cashing checks at these 
check-cashing places. That costs them money, but they don't 
have bank accounts. They are underbanked, or they are not 
banked at all.
    But in addition to that, do you know that there is an 
underground economy where we have so-called handymen--I would 
like to think of as handymen and handywomen--who are taking 
care of communities all across this country? They are doing odd 
jobs. They are painting. They are taking care of lawns, et 
cetera, et cetera. And they want cash. They want to be paid in 
cash. And I and a lot of other people do that. We pay them in 
cash. These are people who are taking care of their families. 
These are people who have children. These are people who depend 
on the cash that they make on a daily basis in order to have a 
decent quality of life.
    I do not want to be in a position where we all move so 
heavily against cash as a form of payment. As a matter of fact, 
of course, I have credit cards and, of course, I use the 
database systems in order to pay bills, et cetera, et cetera; 
but I still resent the fact that people can't get a hotel room 
if they don't have a credit card because hotels don't take 
cash.
    Having said that, Mr. Breyault, what do you say about those 
people whom I am referring to, who are unbanked or underbanked, 
and how cash systems are the only thing they know and the only 
thing they use? Are we to forget about them?
    Mr. Breyault. Chairwoman Waters, no, not at all. And I 
couldn't agree more with your statements. The need for cash to 
be a viable payment method for consumers is one that remains 
with us and will continue to remain with us for many years. 
Unfortunately, as you mentioned, more and more establishments 
are choosing to only accept digital payments. That has real 
costs in terms of access to the marketplace for low-income 
consumers, who often come from marginalized communities, and it 
has real costs in terms of greater surveillance.
    When you pay with a digital payment, you necessarily have 
to give your data to the bank, maybe two banks, the merchant, 
maybe even a payment processor, and that data is shared with 
advertisers, data brokers, and others who build often 
discriminatory profiles on millions of consumers. Cash is an 
anonymous way for millions of consumers to pay, and I think 
that they should continue to have that right.
    Chairwoman Waters. Thank you so very much.
    And I am going to yield back so that you can move on. I 
know you have other Members who have a lot of questions. Thank 
you very much. And I yield back the balance of my time.
    Chairman Green. The gentlelady yields back.
    The Chair now recognizes the ranking member of the 
subcommittee, Mr. Emmer, for 5 minutes of questions.
    Mr. Emmer. Thank you, Chairman Green. And, again, thank you 
to our witnesses for your time and your perspectives today as 
we examine the implications of a cashless economy.
    While some cities and some States have enacted laws that 
require businesses to accept cash, there are also businesses 
that have experimented with a cashless model. There is no one-
size-fits-all solution to payment options, of course, and cash 
is certainly essential to democracy in an open and free 
society.
    That said, Professor Zywicki, I want to dive into the 
reasons a business might not want to accept cash. And I will 
ask several questions. I would appreciate as quick a response 
as you can give to each.
    First, retailers have to pay employees to account for cash 
in the register and at the back of the store, count the drawer 
nightly, package it up, and either hire a courier or send an 
employee to transport it to the bank, and then they have to pay 
fees for processing and handling.
    Did I leave anything out, Professor?
    Mr. Zywicki. I think that pretty much covers all of it. It 
is a very labor-intensive way to do things.
    Mr. Emmer. And there is also some risk that is associated 
with handling all that cash. The business can be exposed to 
theft and the employees can be exposed to danger in the form of 
robberies.
    Professor Zywicki, are there costs associated with these 
types of risks?
    Mr. Zywicki. Absolutely, Mr. Emmer. There are security 
costs. There are the costs of hiring armored cars. There are 
the costs of installing vaults and safes. And as you said, 
there is the cost of--there is the risk to employees who work 
on the front lines who have a lot of cash on hand.
    Mr. Emmer. So, Professor, is it fair to say that a Federal 
requirement to accept cash is effectively a tax on any business 
that might otherwise prefer to go cashless?
    Mr. Zywicki. Absolutely, yes.
    Mr. Emmer. Businesses that stop accepting cash might boost 
their bottom line by reducing overhead costs, saving time, and 
creating some operational efficiencies, no doubt. But, 
Professor Zywicki, do you agree that for some small businesses 
that may be struggling during the ongoing pandemic, those 
savings might actually be the difference between staying open 
versus going out of business?
    Mr. Zywicki. I think that is exactly right. And I think one 
of the points here is that legacy businesses have already 
incurred a lot of these costs: surveillance, security systems, 
safes, all these sorts of things. For new businesses, however, 
they are completely unnecessary, in many cases, for a lot of 
these businesses, and so it is just a cost that is a tax 
imposed on them by incumbents that blocks small businesses, 
blocks new entrants of new businesses and so could really make 
the difference for many of these businesses.
    Mr. Emmer. Thank you. I appreciate your perspective.
    Technology and payments innovation provides more 
convenience and affordability for the consumer certainly. The 
privacy implications of a cashless economy, however, cannot be 
emphasized enough, as far as I am concerned. So as we grapple 
with preserving privacy and transitioning to a digital economy, 
I believe we must look to technology solutions in payments that 
preserve the privacy elements of cash. And, again, I said it at 
the beginning of this hearing, and I will say it again, 
stablecoins and decentralized technology innovations are the 
first things that come to my mind as these are solutions that 
are actually open, permissionless, and private.
    Thank you again, Mr. Chairman, and to all of the witnesses, 
for your time. I yield back the remainder of my time.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Cleaver, who is also the Chair of our Housing, Community 
Development, and Insurance Subcommittee, for 5 minutes.
    Mr. Cleaver, you may be muted.
    I don't see Mr. Cleaver, so we will move on to--
    Mr. Cleaver. I am back.
    Chairman Green. Okay. Mr. Cleaver, you are now recognized 
for 5 minutes.
    Mr. Cleaver. Okay. Sorry, Mr. Chairman, I was having some 
technical difficulty.
    Let me, first of all, say that I am not some kind of, 
``Cro-Magnon'' Member of Congress. And in 1970, Tyrone Davis 
said, ``I would like to turn back the hands of time.'' I am not 
a Tyrone Davis either. However, I am very concerned about a lot 
of the issues surrounding cryptocurrency.
    Let me start by just saying that I am concerned about 
security. We don't have a chance, Professor, right now, at 
least our panel doesn't--we don't have the know-how to trace 
bitcoin. We started using this invisible currency, and we still 
are trying to figure out how to trace bitcoin. Is that 
something we should continue to allow in the marketplace in 
terms of monetary policy?
    Mr. Zywicki. Is that for me?
    Mr. Cleaver. Yes, sir.
    Mr. Zywicki. I think that is a great question. And the 
issue that I think is raised by that is the issue of privacy, 
and I think one of the things we deal with in this area is that 
privacy is a double-edged sword. The privacy of cash is a 
double-edged sword in the sense that we know that widespread 
use of cash facilitates tax evasion, the shadow economy, and 
the like, while at the same time, it preserves legitimate 
privacy. And I think that is the same questions that are raised 
by bitcoin.
    I think it is going to be a long time before bitcoin is 
widely used, and cryptocurrency, and I think one of the reasons 
is kind of dealing with this tradeoff of the good and the bad 
that is associated with privacy with these payment mechanisms.
    Mr. Cleaver. Yes, thank you.
    Somebody else may want to chime in, some of the other 
witnesses. Because it is being traced after the exchange, is 
the problem. Would any of the other witnesses like to respond 
to this?
    Go ahead?
    Mr. Breyault. Congressman Cleaver, thank you very much for 
the question. Certainly, in my written statement, I talked 
about the lack of regulations on things like digital payment 
apps, like Zelle or Venmo. When we talk about cryptocurrencies 
in terms of consumer protections, it is basically a Wild West. 
Consumers really have no protections in place when, for 
example, someone hacks their Coinbase account and steals all of 
their bitcoins. We constantly hear stories of this happening. 
So, I think that it is a space where there needs to be much 
stronger consumer protection regulation.
    But to Mr. Zywicki's point about the anonymity of 
cryptocurrency, I would just have to add that an important 
distinction to make between cryptocurrency and cash is that 
cash is backed by the full faith and credit of the United 
States Government. It is heavily regulated in its production, 
and the U.S. Bureau of Engraving and Printing creates it. 
Cryptocurrencies are only based on the faith of the people who 
create them and who have them in their wallets. So, I hesitate 
to sort of compare apples to apples--to think you are comparing 
apples to apples when you are talking about cash versus 
cryptocurrency.
    Mr. Cleaver. Let me stay with you on that. So, creating 
this cashless economy--and I really try not to hang back in 
time, but it is chilling to think that somebody's hard-earned 
money could be wiped out. Do you believe that we should perhaps 
hold up on things like bitcoin until we figure out how we can 
at least trace the exchange? Because right now, people can get 
wiped out and there is no recourse, because they can't even--I 
don't even think the FBI right now possesses the technology to 
figure out where the money went.
    Mr. Breyault. Congressman, I certainly think that greater 
scrutiny of bitcoin and other cryptocurrencies is needed. I 
know the FCC and various regulatory bodies and the Executive 
Branch are currently looking at that. But in terms of whether 
the spread of these cryptocurrencies can be held up, as you put 
it, I think the cat is out of the bag. I think it is very easy 
to create new cryptocurrencies by anybody in the United States 
or abroad, and I think we need to look at regulating them to 
make sure that they are as safe as possible rather than trying 
to prevent their use altogether.
    Mr. Cleaver. Yes, that was going to be my next question. 
Isn't it time for Congress to start thinking about regulations? 
We can't just sit back and watch this take place without doing 
anything, understanding that the poorest people in the country 
are going to be the prime targets for the unscrupulous.
    Chairman Green. The gentleman's time has expired.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Chairman Green. The Chair will now recognize Mr. Kustoff 
for 5 minutes.
    Mr. Kustoff. Thank you, Mr. Chairman. And thank you to the 
witnesses for appearing this afternoon.
    I was looking at a study from the Federal Reserve entitled, 
``Findings from the Diary of Consumer Payment Choice,'' which 
found that in the year 2020, last year, cash payments decreased 
by roughly 7 percent. Credit card share payments increased from 
24 percent in 2019 to 27 percent last year. That is the 
percentage of the payments. Square, which I think we all know 
is a digital payment system, also found that the number of 
cashless transactions last year increased significantly.
    Professor Zywicki, can you project, if Congress did 
nothing, and if regulators did nothing, in 5 years, what do you 
think the makeup of payment types will be, and roughly what 
will the percentages be, if that makes any sense?
    Mr. Zywicki. Yes, it does. I think that these trends are 
clear. Obviously, we had an acceleration last year, both 
because a lot of places just started doing remote ordering, 
online ordering, for example, restaurants that did sort of 
curbside pickup, that sort of thing. And so what we saw were a 
lot--we also found it more difficult to get cash. I think 
people were reluctant to go to the ATM or the bank or whatever 
because it was difficult, and so we saw, while people were 
spending cash less, they were hoarding cash more during this 
same time.
    My guess is we will probably revert to the long-term trend 
going forward, but maybe a little bit more. A lot of people 
have made the transition now. A lot of people who didn't do 
online banking, for example, now have done online banking. 
People who were unused to paying with electronic payments have 
done it. And there is a huge generational change going on where 
younger people really--some use cash, but a lot don't. So, I 
would say we can look forward to 5 or 6 percent growth a year 
in these electronic payments and a dwindling share of cash as 
well.
    Mr. Kustoff. Professor, you used an interesting term a 
moment ago, ``generational,'' which I think all of us are 
focused on. We have talked about urban districts. I have a 
rural district which is slower to change.
    Mr. Zywicki. That is right.
    Mr. Kustoff. Can you inject, ``generational,'' and apply it 
to districts that are more urban or more rural, that are slower 
to change or may not have the resources to change? Does, 
``generational,'' make a difference in those types of areas?
    Mr. Zywicki. Absolutely. And we documented this in our CFPB 
Task Force report. There are quite clearly things going on with 
generations, which is that the Gen X generation, for example--
Gen Z, I'm sorry, are the first generation that does more 
mobile banking than online banking. And you have to go all the 
way back to, essentially, the baby boomers to still find a 
generation where people do much in-person banking. It had 
shifted online.
    But you are right, there are very important issues 
involving rural populations that I think are understudied. And 
we called for more research in the CFPB Task Force report. I 
mentioned it here, that rural populations face unique 
challenges with respect to access to the internet, high-speed 
internet service, mobile payments, and that sort of thing.
    And so, I think that it is worth exploring in greater 
detail what the unique challenges are of your rural populations 
in order to promote financial inclusion and access to 
electronic payments.
    Mr. Kustoff. Thank you, Professor.
    Mr. Breyault, if I could go backwards for a moment and ask 
you generally the same question that I just asked the 
professor, 5 years from now, if Congress doesn't take any 
action, regulators don't take action, can you forecast what you 
think the percentage, roughly, for the various payment methods 
would be, digital versus cash?
    Mr. Breyault. I'm sorry, Congressman. Are you directing 
that to me?
    Mr. Kustoff. Yes, sir.
    Mr. Breyault. I don't have any reason to dispute Mr. 
Zywicki's numbers, in terms of the trend lines. However, I 
would say that if those trend lines hold, there will be 
millions of consumers who depend on cash, who will find it 
harder to continue to do so.
    Now, I think that there are real societal harms that occur 
if that continues without adequate safeguards being put in 
place. And I think that Congress has a role to play in making 
sure that the seniors, the immigrants, the low-income 
consumers, the handymen and handywomen that Chairwoman Waters 
talked about, are not left behind.
    I would also point out that the access to the 
infrastructure, the banks, has been dwindling. Between 2014 and 
2018, 1,900 more banks were shut down in low-income areas than 
were opened. And I think that is emblematic of the financial 
industry's embrace of a cashless economy that, unfortunately, 
does tend to harm consumers in low-income areas.
    Mr. Kustoff. Thank you. My time has expired, I yield back.
    Chairman Green. The gentleman yields back.
    The Chair now recognizes the gentlewoman from North 
Carolina, Ms. Adams, for 5 minutes.
    Ms. Adams. Thank you, Chairman Green, Ranking Member Emmer, 
and Chairwoman Waters, for holding the hearing today, and thank 
you to our witnesses for your testimony.
    This question is for Ms. Garcia and Ms. Ruggia. Since 
joining Congress in 2014, addressing food insecurity/hunger has 
been one of my top priorities. It is heartbreaking to me that 
over 177,000 of my neighbors in North Carolina's 12th District 
are food insecure, and it is even worse that nationwide, over 
42 million Americans are struggling with food insecurity.
    So my question is, what would a cashless economy in your 
city or State mean for access to food and growing food deserts?
    Ms. Garcia. Thank you very much for that question. And I 
think you have highlighted a very important issue. When we are 
talking about cashless economies and their impact on 
communities, the idea that one cannot use cash, legal tender, 
to purchase food for themselves or their families is absolutely 
devastating.
    And when we are talking about creating greater access to 
the necessities of life, we have to leave open the avenues for 
people to be able to do that with what they have. And if what 
they have in their pocket is cash, then that should be the 
method by which they should be able to access what they need.
    What is really interesting is that we are talking about 
people who want to pay for what they need. They are not asking 
for it for free. And to not be able to use your money is a form 
of economic exclusion, and, as Chairwoman Waters said, it is 
economic discrimination and segregation. Thank you.
    Ms. Adams. Right. Okay. Ms. Ruggia?
    Ms. Ruggia. Yes. I would say that, by definition of food 
desert, where people lack access to healthy foods, by 
definition, it means they have limited choices. So if you have 
a community where there are already few store outlets, food 
outlets, and then many of those stores or any of those stores 
move to cash only, then you are limiting the choices even more. 
And that means that people will have less access to healthy 
foods that they need for their families.
    Ms. Adams. Thank you. We are all too familiar with the 
downsides of a cashless economy, as we just discussed, but at 
the same time, we know the benefits of getting our neighbors 
access to banking services.
    Earlier this year, our committee discussed what we could do 
to drive down the underbanked rate. So, based off of your 
experiences, to the two ladies, how do you think Congress can 
be most helpful in ensuring that our underbanked neighbors get 
access to those critical services?
    Ms. Ruggia. Go ahead.
    Ms. Garcia. Thank you. One way we can do this is by looking 
at alternative models for banking. So, perhaps Congress can 
look at public banking as an option.
    Another idea is considering the notion of postal banking. 
This is something that has been under discussion for years, 
because the infrastructure is already there in neighborhoods 
that don't have banks, and it may be a way to keep postal 
workers potentially working, and keep those jobs alive. Thank 
you.
    Ms. Adams. Okay.
    Ms. Ruggia. I would say exactly that. First of all, the 
postal banking pilot has already taken off. It would be great 
to see that expanded and made permanent so that communities 
where they don't have banks, would have access to at least 
retail banking.
    And that moves me to say, also, that Congress is already 
considering a number of policies that would help get more 
people banked. Number one, all of the human infrastructure 
policies that are being debated right now would lead to greater 
financial security, which, of course, we know is the number-one 
reason that people can't get bank accounts. So, human 
infrastructure is critical.
    Also, expanding and enforcing the Community Reinvestment 
Act (CRA) would hold banks to their obligation to provide 
access to banking services in the communities where they do 
business.
    And finally, making sure that we have the consumer finance 
protection policies in place, so that we restore trust in the 
banking system, so that we make sure that people are not 
victims of unfair, deceptive, and abusive practices in banks 
and nonbanks.
    We could start with making sure that we have, for instance, 
I would say a rate cap for consumer loans, so that we don't 
have usurious practices like payday lending that continue. I 
think all of those things would help get more people banked.
    Ms. Adams. Great. Thank you very much.
    Mr. Chairman, I only have a few seconds left, so I will 
yield back.
    Chairman Green. The gentlelady yields back.
    The Chair now recognizes Mr. Timmons of South Carolina for 
5 minutes.
    Mr. Timmons. Thank you, Mr. Chairman.
    I must say I am a bit perplexed by all this. We want to 
help the unbanked and underbanked become more banked, but this 
proposal wants to make it easier to stay underbanked and 
unbanked by removing an incentive to increase Americans' 
participation in the banking system.
    Some of my colleagues across the aisle want to track 
everyone's bank accounts that have $600 or more a year in an 
attempt to get people to pay more taxes, but we also want to 
make it easier to use cash.
    And I guess the last thing is, as a small business owner, 
some of the biggest challenges that we faced were with cash. 
There was one night--I have a CrossFit gym, Swamp Rabbit 
CrossFit. And we have one coach coaching the class. There is a 
class with, I don't know, 10 or 15 people in it. And I came by 
one night and there was around $5,700 in the cash register. 
Normally, we keep around $100, but that night, two couples had 
paid their entire annual membership in cash.
    Theoretically, if that was going to happen on a regular 
basis, I would have had to have hired a new person to sit out 
there. I would have had to maintain security over it. That was 
a one-off thing and we made sure it never happened again. But, 
again, businesses make their own decisions.
    So, here we are trying to make it easier for people to stay 
unbanked. We are going into the small business owner's 
decisions on how to survive as a small business owner, which is 
extremely challenging, by the way. And we want to track 
people's money to get more taxes, but we also want to let them 
use cash to avoid taxes.
    There are just a lot of things. And honestly, maybe the 
most shocking thing about all of this, which is the most 
confusing, is that this is a bipartisan proposal.
    I guess I am going to start with Professor Zywicki. Help me 
understand this.
    Mr. Zywicki. I am not sure what I can say other than that I 
think a sensible policy would be one that eliminates barriers 
to people getting bank accounts who want bank accounts. I think 
a sensible policy means creating regulatory reform to expand 
access to bank accounts for those who want it.
    And I think that we should be aware of these tradeoffs that 
you are talking about with cash involving tax evasion, the cost 
it imposes on businesses, and the risk of crime and the like. 
And I think this is one of those situations, Representative, 
where one-size-fits-all doesn't seem to fit very well for a lot 
of businesses, and for a lot of consumers.
    Mr. Timmons. Let's just talk about the origins of this 
issue. What is the single biggest factor that has led to 
businesses deciding to stop accepting cash payments?
    Mr. Zywicki. The pandemic, quite clearly.
    Mr. Timmons. Sure. And I just find it ironic that the party 
of government-mandated lockdowns that forced businesses to 
adapt or die, now want to tell businesses what form of payment 
they can and cannot accept.
    I appreciate that in-person payments have declined, but I 
have never been anywhere in my life that does not accept cash. 
I guess this could be a challenge in certain areas, and maybe 
that is a State issue. Maybe the States should start addressing 
it.
    The thought of somebody not being able to buy groceries 
with cash is insane. If that is currently going on somewhere, 
we need to take measures to make sure that is not happening, 
because people need to be able to buy groceries.
    But the other side of it is that this one-size-fits-all 
approach is going to create an enormous burden on all 
businesses, not just grocery stores and gas stations. As a 
business owner, I would prefer cash or, honestly, the ACH 
payments, because I don't have to pay the 2- or 3-percent fee.
    So, I think the free market is working here. If States want 
to address certain areas--again, it is absolutely ridiculous 
that somebody would not be able to buy groceries with cash, and 
we need to take steps to make sure that the basic necessities 
are provided and made available.
    But I just think this is a solution in search of a problem 
at the Federal level, and maybe if we drill down to the State 
level or maybe make this much more targeted, we could move it 
in the right direction.
    Mr. Zywicki. I would agree with you, Representative. I have 
not been able to find any evidence that businesses, the small 
number of businesses who have chosen to do this--as you said, 
it is very profitable for them to take cash. So, I see no 
evidence that there is any ill intent here. It is situations 
where people have been subject to robbery repeatedly, crime. It 
is situations in which they made investments after the pandemic 
and it is very expensive to accept cash. It is new startups. I 
haven't seen any reason to believe that there is anything--
    Mr. Timmons. Professor, I'm sorry. We are out of time.
    I appreciate it, Mr. Chairman, and I yield back.
    Thank you.
    Chairman Green. Thank you. The gentleman yields back.
    The Chair now recognizes the gentlewoman from Michigan, Ms. 
Tlaib, for 5 minutes.
    Ms. Tlaib. Thank you so much, Chairman Green, for always 
being so incredibly thoughtful in bringing, especially many of 
my neighbors who are talking about this issue to Washington, to 
Congress, so that we can remain connected to, again, the 
struggles and challenges of our families.
    I represent the third-poorest congressional district in the 
country, so this is something that I think is at the forefront 
of some of the struggles. It is not free to bank in our 
country.
    The Federal Reserve has found that 6 percent of adults are 
unbanked, and another 16 percent are underbanked. I know that 
one out of four people in Detroit, an 85-percent Black city, 
don't have access to a savings account or a checking account.
    Many of these unbanked or underbanked individuals are 
experiencing economic distress. They are living paycheck to 
paycheck. Their lack of access to banking compounds the 
difficulties they have in accessing housing, credit, and other 
essential services.
    What we need to understand is there aren't structures in 
place right now to support working-class individuals, again, 
the majority being my neighbors, in that regard. And I 
understand the struggle of trying to figure out what we are 
doing here.
    I think just talking about this issue and figuring out, how 
do we fix it, because as a result, even though the pandemic has 
accelerated the trend towards digital payments, cash remains 
the primary payment method for 35 million Americans, and that 
is 14 percent of our population.
    We know that it is expensive to be poor in our country. 
Even as financial institutions offer so-called low-cost bank 
accounts, so-called free checking, it is rarely free, 
particularly for low-income families and individuals who may 
struggle to maintain a balance. Banks recoup that cost of 
maintaining an account through other fees, like overdraft 
penalties and so much more.
    Ms. Ruggia, how does the shift to a cashless economy 
compound the effects of penalties like overdraft fees, and do 
you think we have adequate overdraft protections in place for 
many of our neighbors, again, low-income neighbors who are 
experiencing this?
    Ms. Ruggia. Thank you, Congresswoman. I think that 
certainly, in the case of cashless retail, where people are 
required to have some kind of credit or consumer credit card, 
definitely widens the field for the kinds of abuses that you 
are talking about, the kinds of hidden fees, and overdraft 
charges.
    We have a coaching program, and we have a housing 
counseling program, and people are struggling to manage their 
budgets and make sure that they are not doing things to make 
their credit worse.
    So, to force people to move into situations where they are 
in danger of going into overdraft more often, and subjecting 
them to cybersecurity problems such as identity theft, would 
exacerbate the problem.
    Ms. Tlaib. Ms. Ruggia, I can tell you, it could be the 
littlest things--one day, not being able to get your child to 
school and having to spend a little bit more on gas or having a 
flat tire. So many different emergencies can really impact a 
family just automatically and set them back even 2 months.
    Ms. Garcia, what role can the creation of a public banking 
infrastructure play here, such as postal banking--I know you 
talked about that, offering debit cards automatically tied to 
individual Fed accounts--play in mitigating the effects of a 
cashless economy and bridging that gap between the banked and 
the underbanked?
    Ms. Garcia. Yes, you definitely cited a very important 
element of one of the benefits of public banks. Certainly, 
greater accessibility and creation of banks that are using 
community input into what the community really needs, is really 
important. We need to make sure that whatever structures we 
create, those structures are created with community input.
    And another concept of public banking is that there is an 
understanding that exclusion is not economically efficient, 
right? That is a really important underlying precept around the 
creation of a public bank for the people.
    Access is so important. And I think there are so many 
neighborhoods that have been cut out of banking, in part, 
because banks just are not there or they have left.
    Ms. Tlaib. Absolutely. I agree.
    I am also really concerned--and, Mr. Chairman, as I think 
you know, I am very concerned that the shift towards a cashless 
economy is placing more power and more data in the hands of 
unaccountable technology companies.
    For example, Google now has access to 70 percent of the 
nation's credit and debit card transactions via data-sharing 
agreements. That is very scary. And in 2019, Amazon integrated 
with Worldpay, a company that had already processed more than 
$1.7 trillion in payments annually.
    These are companies that then sell the biometric payment 
data they have collected to other third parties with little to 
no regulation. And as corporations leverage their market power 
to keep consumers within their ecosystem, consumers deserve 
public alternatives to big--
    Chairman Green. The gentlelady's time has expired.
    Ms. Tlaib. Thank you, Mr. Chairman. I am so sorry I ran out 
of time.
    Chairman Green. You may place your comments in the record, 
of course.
    Ms. Tlaib. Thank you, sir.
    Chairman Green. The gentlelady's time having expired, the 
Chair will now recognize the gentlelady from Texas, Ms. Garcia, 
for 5 minutes of questions.
    Ms. Garcia of Texas. Thank you, Mr. Chairman. And thank you 
so much for bringing this topic forward. I can tell you that 
just listening to some of the comments that are being made 
has--I share Mr. Timmons' frustration but for a different 
reason, because I just don't see why some of the remarks that 
are being made are being made, because it seems to me that some 
people aren't getting it.
    There are poor people who are not going to be able to 
access those basic necessities of life, even something as 
simple as just handing cash to a child to get their meal at 
school, being able to pay a cash bond when one of their friends 
or loved ones may be in jail, or even being able to just put 
cash in an offertory basket at church. Those things cannot be 
done with credit cards. Not everybody has a credit card.
    To me, this sense of frustration peaked when someone called 
this, ``attacks.'' Let's put ourselves in the shoes of someone 
who can't get to a bank, can't get to a credit union, doesn't 
have an account, and may not even have the capacity, the 
literacy capacity, the language capacity to understand and to 
be able to manage an account.
    So yes, this is about making sure that we have financial 
inclusion, and our economic banking system needs it. It needs 
choices, choices for the consumer to make.
    And, Mr. Timmons, I am surprised you have not been to a 
place that says, ``No cash taken.'' I think probably about half 
of the vendors in most of the airports that I have been in, in 
the last year, will simply not take cash. And I have been to 
drive-throughs that will not either.
    My personal rule is, if it is less than $20, I don't put it 
on a credit card. I carry cash. But I carry cash more to be 
able to give people cash tips, because merchants not only don't 
give them their tips daily or monthly, sometimes they even 
charge back the merchant fee to the wait staff. And I don't 
want them to do that, so I do my tips in cash to make sure 
people can put that money in their pocket the same day.
    And to put $8 on a credit card just because you went 
through a drive-through to get some chicken--we cannot do that 
to people. And I am fortunate. I have a credit card. I have a 
debit card. I rarely use the debit card.
    But in a recent study on access to banking, the FDIC found 
that in 2019, 12.2 percent of Hispanic households and 13.8 
percent of Black households were unbanked, but only 2.5 percent 
of White households were unbanked. The banking industry has 
made great strides to reach out to many of our communities, but 
they still have a long way to go, particularly when it comes to 
financial literacy and access to banking and inclusion in a 
person's own language.
    Ms. Garcia, I wanted to ask you a question. We are not 
cousins, so this is just an objective, unbiased question. In 
your experience in San Francisco, it seems like a lot of what 
you talked about also exists in my district. My district is 77-
percent Latino, and the primary language is Spanish for many 
people in my community.
    What additional challenges does the banking system have 
when it comes to financial literacy and access to information 
in a person's own language?
    Ms. Garcia. Thank you very much for your question. And I am 
sorry we are not cousins, though we do share the same last 
name.
    There are many challenges for individuals such as you have 
described when it comes to banking. First of all, there are 
potentially cultural issues that arise with trusting banks, 
like, is a bank a place I can trust, where I can put my money? 
There are many people who are used to keeping cash on hand as a 
matter of security and prefer to do that.
    They also know that banks aren't always the best place for 
them, in terms of feeling welcome. And it may be hard for 
people who don't have that experience to understand what it 
feels like to be an outsider, but this is a very real 
perception for many members of our community.
    We talk a lot about the future here, but we also need to 
deal with the present. How do we help people now? And if we are 
moving to greater use of electronic means, then how do we help 
people adjust to that?
    It is not going to be overnight. This is not where we can 
just flip the switch and create a cashless economy that 
everyone can participate in. So, unless and until we can help 
people who are the most vulnerable, we need to make sure that 
we make cash an option. It is valid legal tender in this 
country. Thank you.
    Ms. Garcia of Texas. Thank you. And, Mr. Chairman, I see my 
time has expired, but I just wanted to submit for the record a 
report on credit card fraud. This report highlights that credit 
card fraud is still the second-biggest challenge in our economy 
and has the highest numbers. I might add that cash fraud comes 
in at about, I think it is number six or number seven.
    I know there is a concern about security, but going to 
credit cards and debit cards--
    Chairman Green. The gentlelady's time has expired.
    Ms. Garcia of Texas. --is also a big concern for our 
consumers with regard to fraud. Thank you.
    Chairman Green. The gentlelady's time has long since 
expired.
    The Chair now recognizes Ms. Williams of Georgia for 5 
minutes.
    Ms. Williams of Georgia. Thank you, Mr. Chairman.
    We have heard today that there are clear racial disparities 
when it comes to who is unbanked or underbanked.
    Ms. Garcia, if more of our economy were to go completely 
cashless, how would this deepen economic disparities that 
already exist for individuals who are disproportionately 
unbanked and unable to use digital payment methods?
    Ms. Garcia. Thank you very much for your question. I 
believe that it would exacerbate an already-huge inequity that 
many people of color, that many people in our communities 
experience on a daily basis.
    And we need to move away from that. That is exactly what is 
happening in society, that there is a hue and cry that we move 
towards equity and away from exclusion.
    So, with this proposal that we move to cashless, we really 
need to look at it in that light. And I fully understand your 
concerns and Congress' concerns in looking at this very 
carefully from an equity perspective.
    Ms. Williams of Georgia. Thank you, Ms. Garcia. I am 
determined to minimize these kinds of disparities for those 
most marginalized, for my constituents and for the younger, 
unbanked Nikemas of the world. That is why I have co-sponsored 
the Payment Choice Act, which ensures that retail businesses 
continue to accept cash for payment.
    Representative Valdez, what impact would passing this 
legislation have now, while numerous businesses still do accept 
cash, to ensure financial inclusion while setting a predictable 
standard for businesses?
    Mr. Valdez. Thank you, Congresswoman Williams. Since we 
have passed it in Colorado, we have heard a lot from 
constituents who have been able to shed light on this issue 
within their communities at local merchants.
    If we don't pass this, I believe people will continue to 
move in the direction of excluding cash for a variety of 
purposes that we have heard during the hearing today. But most 
importantly, you would see people feel more and more 
marginalized and embarrassed at being refused the currency that 
they have to spend.
    So, I think what you have is just a widening gap in kind of 
the feeling of the haves and the have-nots of the world. And I 
think it is something we are likely to see increase with the 
fallout from COVID-19 and some of the financial difficulties 
that ordinary Americans are experiencing. As garnishments and 
those sorts of things start to happen, you will see more and 
more folks who are looking to enter the cash economy. So I 
actually think we will start to see things move in the other 
direction as well.
    Ms. Williams of Georgia. Thank you so much.
    Ms. Ruggia, beyond preserving a cash option, what 
recommendations do you have to ease the transition to a digital 
economy for those who are unbanked and underbanked, to maximize 
their financial inclusion and economic prosperity?
    Ms. Ruggia. As I said, the factors that keep people from 
banking are pretty clear: financial security; access; and also 
the trust factor.
    I think it is really important to make sure that all of the 
protections are in place, so that as the general economy moves 
towards less of a cash environment, everybody is protected from 
potential abuses and unfair practices.
    We know that in the nonbank environment, people are already 
being abused with high interest rates and other forms of unfair 
practices. So, it is important that all of the protections and 
all of the factors are in place to create an environment where 
we can move towards implementing more technology into the 
banking and finance environment.
    As I said before, we need to make sure that people have 
access to bank accounts. Even if it is online, they have to be 
able to have the internet access. So there is the access 
factor, making sure that the Community Reinvestment Act is 
expanded and enforced, and making sure that all of the 
agencies, like the CFPB and the FTC, have the tools to make 
sure that there are not abusive, unfair, and deceptive 
practices going on in the world of fintech and technical 
financial practices.
    Ms. Williams of Georgia. Thank you.
    Mr. Chairman, today we have heard that there are clear 
racial disparities when it comes to who is unbanked and 
underbanked, and we, as Members of Congress, have an obligation 
to make sure that our economy works for everyone. With that, 
Mr. Chairman, I yield back the balance of my time.
    Chairman Green. The gentlelady yields back.
    And the Chair now recognizes himself for 5 minutes.
    Friends, it really costs to be poor in this country. I know 
poor people. I know people who live under overpasses. And, 
unfortunately, there is an overpass just outside my office 
where people are residing. That is their home. And they are not 
persons who can open bank accounts, because, first of all, it 
costs money to open a bank account itself.
    And then, if you have an overdraft and if you are poor--
having been poor in my life, I know what it is like to write a 
check that doesn't have the funds available to cover it. So, 
you have the overdraft fees. And then, you have the cost of a 
credit card. Credit cards, for me, are cost-free or so they 
say, but for most people in this country, they pay some fee to 
have a credit card.
    But it really costs people to be poor, and it costs 
something that they can't afford, is the point that I am trying 
to make. So, I am concerned.
    Mr. Zywicki, sir, are you still there?
    Mr. Zywicki. Yes, sir. Yes, Mr. Chairman.
    Chairman Green. Let's you and I engage in a friendly 
colloquy, because I appreciate your position. You said you were 
neither for nor against it initially.
    How do we deal with this if we have some degree of 
recalcitrance when it comes to opening up the system such that 
there is the equity? There are many who oppose public banking, 
but at the same time they would have persons have bank 
accounts. So how do we deal with this, in your opinion, having 
studied this?
    Mr. Zywicki. Thank you. It is a great question. I 
appreciate the question. The way I think of this is, first, I 
think this dichotomy we have between being banked and unbanked, 
I think is something that doesn't really work very well 
anymore.
    I think that there are a lot of people who really need 
access to payments, but don't need all of the bells and 
whistles and expense and complications of a bank account. And I 
think that there are ways we can facilitate that for simple 
online payment platforms. Prepaid cards can sort of merge into 
that. I think one of the ways--
    Chairman Green. As we do this, I may interrupt from time to 
time, but I am going to do so respectfully.
    Many persons don't have the technology to engage these 
platforms. How do you deal with that?
    Mr. Zywicki. And that is obviously the biggest challenge 
here, I would agree. I think that one of the things we should 
be looking at is expanding who can be a bank. For example, I 
think Walmart tried to start a bank about 10 years ago, and the 
incumbent banks kept them from doing it. I think Walmart could 
go a long way towards providing bank services in rural 
communities, for example.
    I think that expanding the payment system in general to 
nonbanks would also help people get access to payments 
without--
    Chairman Green. Let me interrupt you again. You mentioned 
Walmart. What about the idea that was brought up earlier of a 
post office being an institution that engages, allows people to 
bank? What are your thoughts on this?
    Mr. Zywicki. I have looked at that, and I don't have any 
strong view one way or the other on the post office. It is 
just, my sense is that the post office--based on the analysis 
we did in the task force report, the post office is a solution 
to a nonproblem, which is that, according to the FDIC study, 
the primary reason why--very few people say that the reason why 
they don't have access to a bank account is a lack of physical 
access, which is basically what the post office offers. My view 
is--
    Chairman Green. If I may, isn't that what you are offering 
at Walmart? It is similar to Walmart. Why would you think that 
Walmart works, but a post office won't work?
    Mr. Zywicki. Yes. Walmart provides a whole suite of banking 
services, and is also open many more hours than the post office 
is, for example.
    Chairman Green. Many more hours can be beneficial, but what 
about the hours that banks keep now? It is hard to find my bank 
open after 3 or 4 o'clock. They are out. And they don't have 
the window service that they used to have, the drive-through 
service.
    Mr. Zywicki. I agree completely with that, and I think we 
need more competition in banking. We need better bank account 
portability. We need credit unions being able to do more, and 
industrial loan banks. We need fintech. I think that it is time 
to shake up the banking industry that has gotten too complacent 
in the way that they serve a lot of lower-income consumers.
    Chairman Green. Thank you for the friendly colloquy.
    My time has expired, and I want to be a good Member, and a 
good example for my friends on the subcommittee.
    My time having expired, friends, I want to thank each of 
the witnesses for their testimony and for committing the time 
and resources to share their expertise with this subcommittee. 
Your testimony today will help to advance the important work of 
this subcommittee and of the Congress.
    The Chair notes that some Members may have additional 
questions for these witnesses, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is now adjourned, and the Chair is grateful to 
all who participated.
    [Whereupon, at 1:39 p.m., the hearing was adjourned.]

                            A P P E N D I X


                            October 14, 2021

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