In a new letter, Republicans on the House Financial Services Committee said they are concerned by the Federal Reserve’s decision to cease accepting penny deposits or orders at many coin terminal locations across the U.S.
The U.S. Mint printed the last penny in November after President Trump ordered an end to penny production. While the Mint produces coinage, the Fed distributes coins to banks and credit unions. In their letter, Committee Chairman French Hill (R-Ark.) and eight committee Republicans – along with House Conference Chairwoman Lisa McClain (R-Mich.) – acknowledged the Fed is not “shutting down” coin terminals entirely, as private armored carriers can continue to process orders and deposits from financial institutions’ own accounts.
“However, this is not a practical solution, as banks understandably want to preserve their own penny inventories out of concern that additional terminals may no longer be available, leaving them unable to obtain additional pennies in a cost-effective manner,” the lawmakers wrote.
The lawmakers also noted that nearly 300 billion pennies may still be in circulation. “We urge the Federal Reserve to proceed cautiously before shutting down additional terminals and to assess whether reopening more locations to penny deposits and orders would help recirculate existing coins and alleviate current pressures in the system,” they said.
Earlier this month, top Democrats on the Senate Banking and House Financial Services committees urged federal officials to provide “immediate guidance” about the current penny shortage, saying the sudden end of penny production created challenges for banks and retailers.
Treasury issues guidance
In related news, the Treasury Department today issued FAQs for businesses and individuals about the end of penny production. The documents explain why the federal government stopped producing pennies and how it will affect cash payments.
American Bankers Association President and CEO Rob Nichols welcomed the guidance and said that a clear path forward is essential to ensuring a smooth transition for consumers, businesses and the banks that serve them.
“As we noted in our recent letter to Treasury, maintaining the ability to accept and process pennies — along with consistent rounding rules and strong public education — is critical for both customer service and operational continuity,” Nichols said. “We also appreciate that the guidance notes the Federal Reserve is committed to recirculating existing coins, and that can be demonstrated by re-opening all coin distribution locations to all penny transactions.”
