Penny elimination shifts small transaction costs to cash-dependent Americans

What it does

This bill stops the U.S. Mint from making new pennies for everyday use (though old pennies remain legal tender), allows cash transactions to be rounded to the nearest nickel when exact change is unavailable, and requires the Federal Reserve to report on how penny supply disruptions and rounding might affect low-income and unbanked communities. The bill benefits businesses and consumers by reducing transaction friction; it may cost consumers small amounts through rounding, and creates uncertainty for communities that rely heavily on cash.

Why we flagged it

The bill's core mechanism is a straightforward policy change—ending penny production and permitting cash rounding—stated plainly in the text. However, the distributional consequences (rounding costs borne by cash-dependent populations) and the reliance on post-hoc Federal Reserve reporting to assess harm create a mixed civic profile.

What the text implies

• Rounding rules favor merchants and payers over customers receiving change: customers' change is rounded down (1–2¢, 6–7¢ → 0¢; 3–4¢, 8–9¢ → 5¢), while merchants paying customers round in the customer's favor. This asymmetry may accumulate to merchant benefit over time.
• Low-income and unbanked populations, which rely disproportionately on cash, will absorb rounding losses without offsetting gains from digital payment adoption.
• Employer rounding is mandatory upward (to nearest 5¢) only when the employer chooses to round; employers can avoid rounding entirely, creating wage-payment uncertainty for cash-paid workers.
• Federal Reserve reporting on penny supply disruption and rounding impacts is required but non-binding; Congress receives recommendations but is not obligated to act if harms materialize.
• The bill permits the Secretary of the Treasury to discontinue other coins in the future using the same notice-and-briefing procedure, potentially opening a pathway to further currency consolidation.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Businesses and consumers gain convenience and reduced transaction costs from eliminating pennies and rounding; however, low-income, unbanked, and elderly consumers who rely on cash face cumulative rounding losses and potential supply disruptions. The bill mandates a Federal Reserve assessment of these harms but does not prevent them.

Who stands to gain

• retail merchants (reduced transaction processing costs)
• financial institutions (simplified cash handling)
• vending machine operators (reduced need for penny acceptance)

Named in the bill

U.S. Mint, Federal Reserve Board of Governors, Secretary of the Treasury, House Committee on Financial Services, Senate Committee on Banking, Housing, and Urban Affairs, Bank Holding Company Act of 1956

Where it stands

1 cosponsor: 1 Democrats.

• Aug 27, 2026 — Introduced · Congress.gov: “Introduced in House”
• Aug 27, 2026 — Referred to House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Referred to the House Committee on Financial Services”
• Sep 14, 2026 — Passed the House · Congress.gov: “On motion to suspend the rules and pass the bill Agreed to by voice vote”
• Sep 14, 2026 — Floor vote scheduled · Congress.gov: “Ms. De La Cruz moved to suspend the rules and pass the bill”
• Sep 28, 2026 — Reported out of committee · Congress.gov: “Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.”
• Sep 28, 2026 — Passed both chambers · Congress.gov: “Passed Senate without amendment by Unanimous Consent”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.