WASHINGTON—For credit unions and their members, the penny’s long goodbye is no longer theoretical—it’s operational.
Just before Christmas the U.S. Treasury quietly released a detailed set of Penny Production Cessation FAQs, confirming that the federal government has stopped manufacturing new pennies and laying out how businesses, financial institutions, and consumers should prepare as the coin gradually slips out of everyday use.
The move reflects a basic math problem: It now costs 3.69 cents to produce a single penny, nearly triple its cost a decade ago. Treasury estimates halting production will save taxpayers $56 million annually, while acknowledging that the coin’s purchasing power—and relevance—has steadily eroded in an economy dominated by electronic payments.
What Changes At The Register—And What Doesn’t
Despite the halt in production, pennies are not being eliminated. Roughly 114 billion pennies remain in circulation, and the Federal Reserve will continue recirculating them for as long as possible. The pace at which pennies disappear will depend largely on consumer behavior, Treasury said, encouraging Americans to spend their loose change to ease the transition.
As pennies become harder to come by, cash transactions will increasingly be rounded to the nearest five cents—but only cash. Electronic payments, including debit cards, credit cards, checks, ACH, and gift cards, will continue to settle to the exact cent, with no rounding involved, Treasury said.
Treasury guidance points to “symmetrical rounding,” in which totals ending in 1, 2, 6, or 7 cents round down, while totals ending in 3, 4, 8, or 9 cents round up. Transactions of exactly one or two cents may round to a nickel. Importantly, rounding is meant to occur after taxes and fees are calculated, preserving existing sales tax structures, which remain governed by state law.
Implications For Credit Unions
For financial institutions, the FAQs answer a key operational question: yes, credit unions will continue to accept pennies for deposit. Pennies remain legal tender indefinitely and retain their full face value. That said, institutions may maintain their own requirements for large deposits, such as rolling or wrapping coins, and members are encouraged to check policies in advance.
Treasury is also urging businesses—and by extension, the financial institutions that support them—to apply rounding rules fairly, consistently, and transparently, including clear receipt disclosures. The department says it is working directly with point-of-sale providers to ensure systems can handle rounding properly and avoid consumer confusion at checkout.
No Inflation, But Plenty Of Questions
Treasury insists the shift will not raise prices overall, noting that cash transactions should round down just as often as they round up. Refunds paid in cash may also be rounded if pennies are unavailable, though businesses retain discretion over refund policies.
For consumers, the penny’s fade-out is subtle. For credit unions, it’s another moment where front-line staff may become educators—explaining why a cash transaction rounded, why a receipt looks different, or why a jar of pennies is still welcome at the branch.
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