On the heels of President Trump’s order earlier this year for the Treasury to end the production of the penny, arguing that the coins cost more to produce than their value and waste taxpayer money, businesses have begun to see penny shortages.
On September 30, NACS met with Treasury officials and sent a letter to the Senate Banking and House Financial Services Committees urging them to pass federal legislation to allow businesses to continue carrying out cash transactions as issues arise.
The letter highlighted that businesses need legislation which will create a national law allowing businesses to round transactions to the nearest nickel, ensure rounding for cash customers does not violate terms of the Supplemental Nutrition Assistance Program (SNAP), and facilitates check cashing at retail locations.
The letter stated: “As you are aware the U.S. Mint produced its last pennies in June of this year. The Federal Reserve distributes these coins throughout the nation and is reporting that dozens of coin distribution locations have already run out of pennies to distribute to facilitate commerce. Many more will run out soon in the coming days that will impact every congressional district. Main Street businesses do not have the insight into where pennies will stop being available next and how soon that will occur.”
The Fed is analyzing penny inventory on a weekly basis. When inventory at a specific location is depleted, FedCash Services will cease fulfilling orders of pennies at that specific location. For deposits, as localized inventory is depleted, it will vary over time whether coin distribution locations are able to accept deposits.
Without the production of new pennies, cash transactions would need to be rounded to the nearest nickel. There are some states and localities with cash laws that would prohibit this type of rounding. There are also pricing laws in various states. This is why federal legislation is needed to preempt these issues.
“Businesses are desperate for Congress to address this issue by passing a law allowing them to round to the nearest nickel. Without federal legislation, businesses are left in the impossible position of trying to figure out what to do and at risk of being out of compliance with other laws. We urgently need Congress to act,” said Anna Ready Blom, strategic advisor of the government relations team at NACS.
NACS will continue to monitor the situation. Look out for more updates as they become available.