WASHINGTON — The Federal Reserve has announced plans to resume penny deposits from banks and credit unions at commercial coin distribution locations beginning Jan. 14, restoring a service that had been temporarily suspended because of inventory constraints following the end of penny production.
In a statement, the central bank said the resumption applies to commercial coin terminals that handle bulk coin deposits from depository institutions. The pause had been implemented after the U.S. Mint ended production of the one-cent coin, tightening available inventories and prompting the Fed to prioritize circulation needs.
The Fed said improved inventory management and stabilization of coin flows now allow it to again accept penny deposits as part of its normal cash services operations.
Limited Ability
The suspension had limited institutions’ ability to return excess pennies, particularly as consumers and businesses increasingly move away from cash transactions involving small-denomination coins.
The decision does not reverse the end of penny production, which has fueled ongoing debate over the cost and utility of the one-cent coin.
The Federal Reserve said it will continue to monitor coin inventories and circulation patterns as cash usage evolves, and will adjust services as needed to ensure efficient distribution across the financial system.
Credit unions have had to put policies in place on how to handle pennies in transactions by rounding to the nearest nickel. Among them is GreenState Credit Union in Iowa, as the CU Daily reported here.
