The Common Cents Act mandates the end of penny production, authorizes new nickel compositions, and establishes voluntary guidelines for rounding cash transactions to the nearest five cents.
Lisa McClain
Representative
MI-9
The Common Cents Act directs the U.S. Mint to cease the production of pennies for general circulation while authorizing new, cost-effective manufacturing specifications for nickels. The bill establishes voluntary guidelines for rounding cash transactions to the nearest five cents and provides legal protections for businesses that adopt these practices. Additionally, it mandates that the Federal Reserve develop a strategic plan to ensure a stable transition and monitor the impact of these changes on the public.
Common Cents Act Ends Penny Production and Introduces 5-Cent Rounding for Cash Transactions
The U.S. is looking to trim the fat from its pocket change. The Common Cents Act proposes a major shift in our currency by officially ending the production of pennies for general circulation and giving the Treasury the green light to change what nickels are made of to save on costs. While the pennies already in your jar will stay legal tender, the Mint will stop making new ones for the public, shifting its focus to making pennies only as collectible items. Additionally, the bill allows the Treasury to experiment with a new nickel recipe—specifically a zinc core with a nickel coating—as long as it doesn't break vending machines or laundromat dryers (SEC. 2).
The New Math at the Register
Since pennies are going the way of the VHS tape, the bill introduces a 'rounding' system for cash transactions when exact change isn't available (SEC. 3). If your total ends in 1, 2, 6, or 7 cents, the business can round down to the nearest nickel. If it ends in 3, 4, 8, or 9 cents, they can round up. For example, if you're at a hardware store and your total is $10.02, you might pay $10.00. If it’s $10.04, you might pay $10.05. It’s important to note this is strictly for cash; if you’re swiping a card or using an app, the price stays exactly what it is. Businesses can also choose to always round in your favor, and if an employer pays a worker in cash, they are legally required to round up to the nearest nickel if they choose to round at all.
Protection for Businesses and Workers
To make this transition smoother for shops and banks, the bill creates a 'safe harbor' (SEC. 4). This means as long as a business follows the rounding rules, they can't be sued or penalized under federal or state laws for not giving back that exact one or two cents in change. However, the bill is very clear that this doesn't give anyone a pass on labor laws. Your boss can't use 'rounding' as an excuse to dip below the minimum wage or shortchange your overtime pay. It’s a rule designed to keep the checkout line moving, not to rewrite employment contracts.
Watching Out for the Unbanked
While saving the government money on minting costs sounds good on paper, there’s a real concern for people who rely entirely on cash. The bill tasks the Federal Reserve with studying how these changes will hit low-income communities, seniors, and the 'unbanked'—people who don't have traditional bank accounts (SEC. 5). Since those extra cents can add up over a year for someone on a tight budget, the Treasury has to report back to Congress on whether rounding is causing an unfair financial burden. The Fed also has to ensure that the supply of existing pennies doesn't just vanish overnight, creating a 'coin cliff' that could disrupt local economies.