philosecurity

7/15 – Updated with more details, and a shiny new photo.

The Bush Turnpike in Texas no longer accepts cash as of July 1, 2009. Based on the federal Coinage Act of 1965, I believe this is illegal.

The Coinage Act (31 U.S.C. 5103) states: “United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”

The Treasury Department has made it clear that “Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills.” However, I would argue that the NTTA is now operating as a “creditor.” “ZipCash is the NTTA’s “drive now, pay later” option for customers without TollTags,” reads their advertising literature. “High-speed cameras take pictures of the license plates of vehicles without TollTags. Invoices for the tolls are then sent to the registered owner of each vehicle.”

The time at which payment is collected matters a lot. Stores are not required to accept US cash for products and services paid up front, because no debt is incurred. However, “restaurants that do not collect payment until after a meal is served would have to accept that legal tender for the debt incurred in purchasing the meal.” (Wikipedia) Based on this logic, the NTTA (“a political subdivision of the State of Texas”) would presumably not be required to accept cash for payment as a driver is getting onto the highway, but once he or she has driven the stretch of road, the debt has been incurred and US cash monies must be accepted.

There currently appears to be no way for a driver on the Bush Turnpike who is not the registered owner to directly receive and pay an invoice from the NTTA (according to Texas law, the owner is responsible). The NTTA sends “ZipCash” invoices only to the registered vehicle owner, and TxTolls are not transferable between vehicles. What’s more, the NTTA has no instructions (at least, none that I could find) on their web site which indicate how a driver could pay their ZipCash invoice in, well, real cash.

With the advent of “ZipCash” the North Texas Tollway Authority (NTTA) now falls under the Fair and Accurate Credit Transactions Act of 2003 (FACTA) definition of “creditor” as “any entity that regularly extends or renews credit – or arranges for others to do so – and includes all entities that regularly permit deferred payments for goods or services.”

This means that the NTTA is also regulated by the FTC’s new Red Flags Rules, which apply to any “creditor” that “offers or maintains ‘covered accounts.’ A covered account is (1) an account primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions…” The NTTA’s “Toll Tags” accounts fit squarely into that definition. (I wonder how hard the NTTA has worked on their required Red Flag Identity Theft Protection Program…)

According to the US Treasury, the Coinage Act ensures that “all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor.”