Common Cents Act
- Sponsor
- Rep. McClain, Lisa C. [R-MI-9]
- Committees
- Financial Services Committee (primary)
- Last action
- Oct 14, 2026
Bottom line
The Common Cents Act aims to eliminate the penny from everyday cash transactions, streamline payments through optional rounding, and ensure a stable transition while studying potential impacts on vulnerable populations.
What it actually does
This bill directs the Secretary of the Treasury to cease the production of one-cent coins for general circulation, while allowing for continued production for numismatic purposes. It establishes a framework for optional rounding of cash transactions to the nearest 5 cents when exact change is not available. Furthermore, it mandates the Federal Reserve Board to develop and report on a strategic plan to manage the transition and assess the impact on various communities, including low-income and unbanked individuals.
Proponents argue
Proponents argue that discontinuing the penny will save the U.S. government money by eliminating the production of a coin that costs more to mint than its face value. They contend that rounding cash transactions will increase efficiency for businesses and consumers by reducing the time and effort spent handling low-value coins, thereby modernizing the nation's currency system.
Opponents contend
Opponents might express concerns that rounding cash transactions, even optionally, could disproportionately affect low-income individuals or those who rely heavily on cash, potentially leading to a regressive 'rounding tax' over time. They may also argue against removing a familiar part of the currency, citing public sentiment or the potential for businesses to subtly adjust prices to benefit from rounding up.
The bill is concise and clearly written, making it accessible for a reader to understand its core provisions and implications within a short timeframe.
Section 2
Ceasing Production of One-Cent Coins and Amending 5-Cent Coin Specifications
This section directs the Secretary of the Treasury to stop minting one-cent coins for general circulation, though they can still be produced for collectors (numismatic items). It also amends existing law (31 U.S.C. 5112) to allow for a new composition for the 5-cent coin (nickel) that could include an inner layer of zinc and an outer layer of nickel, with the goal of reducing production costs and minimizing adverse impacts on coin-accepting machines.
Supporters argue
Proponents argue that ceasing penny production is a fiscally responsible move, as the cost to produce a penny often exceeds its face value, leading to taxpayer losses. Modernizing the nickel's composition could further enhance cost efficiency without impacting its utility.
Critics contend
Some may argue that discontinuing the penny, even if costly to produce, removes a symbolic and historically significant coin from circulation. Concerns might also be raised about the potential for public confusion or resistance to changes in coin composition.
Tradeoffs
The provision balances the economic efficiency of ceasing production of a costly coin against the public's familiarity and sentimental attachment to the penny, as well as the operational considerations for vending machines and other coin-operated devices.
Section 3
Optional Cash Transaction Rounding Rules
This section establishes rules for rounding cash transactions to the nearest 5 cents when exact change cannot be provided. It specifies that amounts ending in 1, 2, 6, or 7 cents may be rounded down, while amounts ending in 3, 4, 8, or 9 cents may be rounded up. For very small transactions ($0.01 or $0.02), rounding up to $0.05 is allowed. The rounding is optional for businesses and financial institutions, and if an employer rounds a cash payment to an employee, it must be rounded up. These rules do not apply to non-cash transactions.
Section 4
Legal Protection for Cash Transaction Rounding
This section clarifies that any person or financial institution adhering to the cash rounding provisions described in Section 3 will not be considered in violation of any Federal, State, Tribal, or local law, regulation, or standard. It explicitly states that this Act does not excuse noncompliance with minimum wage, overtime pay, or paid leave laws.
Section 5
Strategic Plan and Reports on Coin Distribution Stability
This section mandates the Board of Governors of the Federal Reserve System to submit a strategic plan and subsequent reports to Congress regarding the stability of the coin distribution system, particularly concerning pennies. The plan must address limiting disruptions, evaluating coin terminals, and assessing how penny processing affects the transition. Crucially, it requires the Secretary of the Treasury to conduct an assessment on the impact of penny supply disruptions and rounding practices on low-income communities, older consumers, and unbanked individuals, including recommendations to Congress.
Section 6
General Procedures for Discontinuation of Coin Circulation
This section amends existing law (31 U.S.C. 5111) to establish a formal procedure for the Secretary of the Treasury to discontinue the minting for circulation of any coin. It requires the Secretary to provide 60 days' notice to specific Congressional committees (House Financial Services and Senate Banking, Housing, and Urban Affairs), including reasoning and a comprehensive phasing-out plan. A briefing to these committees must follow within 30 days of the notice.
Any one-cent coin minted before the enactment date of this subsection shall remain legal tender for all debts, public charges, taxes, and dues.
Section 2(bb)(2)
Why it matters:This is standard legislative practice to ensure legal continuity and avoid confusion regarding the status of existing currency, rather than an attempt to hide information.
Case for: Ensures that existing pennies retain their value and can still be used, preventing immediate demonetization and avoiding widespread public confusion or financial loss for those holding pennies.
Case against: No significant case against this provision, as it is a necessary legal clarification to prevent disruption.
Estimated impact: Prevents the immediate devaluation of billions of pennies currently in circulation, maintaining their purchasing power.
With respect to an employer providing a cash payment to an employee in an amount not divisible by 5 cents, if the employer chooses to round, the employer shall round the amount of cents in such payment up to the nearest amount divisible by 5 cents.
Section 3(c)
Why it matters:This is a specific carve-out for a particular type of transaction, ensuring that if rounding occurs in this context, it benefits the employee. It's a protective measure that might be overlooked by a reader focused on general consumer transactions.
Case for: Ensures that employees are not disadvantaged by rounding practices when receiving cash payments, providing a small benefit to them if rounding occurs.
Case against: Some employers might argue it adds a minor administrative burden or slightly increases payroll costs if they choose to round, but the optional nature mitigates this.
Estimated impact: Potentially minor, positive financial impact for employees receiving cash payments that are rounded, ensuring they always receive slightly more or the same amount.
Nothing in this Act may be construed to require any person to round a payment as described in subsections (a) or (b).
Section 3(e)
Why it matters:This is a key clarifying statement that defines the optional nature of the entire rounding scheme. It's positioned to ensure that the detailed rules aren't misinterpreted as mandates, which is a common legislative technique to avoid ambiguity.
Case for: Ensures flexibility for businesses and consumers, allowing them to continue using exact change if preferred, and addresses concerns that rounding would become a mandatory practice that could disadvantage certain groups.
Case against: Some might argue that making it optional could lead to inconsistent application across businesses, potentially causing confusion or frustration for consumers expecting a standardized rounding practice.
Estimated impact: Preserves individual and business autonomy in cash transactions, preventing a forced shift to rounding.
Requires an assessment by the Secretary of the Treasury on the impact of penny supply and demand disruptions, and rounding practices for check cashing, on low-income communities, older consumers, debanked, unbanked, and underbanked individuals, including feedback from State or local entities; and includes recommendations to the Congress to address any adverse impacts identified.
Section 5(a)(4)
Why it matters:While important, it's a specific directive within a broader reporting requirement. Its placement ensures that the social equity implications are considered as part of the overall transition strategy, rather than being a standalone, potentially isolated, study.
Case for: Crucial for ensuring that the policy changes do not inadvertently harm vulnerable populations. The requirement for recommendations provides a mechanism for Congress to address any identified issues proactively.
Case against: No significant case against this provision, as it is a measure to ensure equitable policy implementation.
Estimated impact: Provides critical data and policy recommendations to mitigate potential negative financial impacts on vulnerable groups, potentially leading to future legislative adjustments.