Penny's End: Who Pays When Cash Rounds Up?
S. 1525 — Common Cents Act · Filed by Cynthia Lummis (R-WY) · 3 cosponsors · Introduced Apr 30, 2025 · Passed chamber
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What it does
This bill stops the U.S. Mint from making new pennies for everyday use (though it can still make them as collectibles), changes the 5-cent coin's composition to reduce production costs, and allows businesses and individuals to round cash payments to the nearest nickel when exact change cannot be provided. The bill also requires the Federal Reserve to report on how penny discontinuation affects low-income and unbanked communities, and establishes a process for Congress to review any future decisions to stop making other coins.
Why we flagged it
The bill's core function is to discontinue penny production and establish a legal framework for cash-transaction rounding. While framed as cost-saving and convenience, the operative mechanism creates asymmetrical rounding rules that may disadvantage cash-dependent consumers.
What the text implies
- Rounding rules are asymmetrical: consumers round down on 1–2 cents but businesses round up on 3–4 cents, creating a systematic small cost to consumers in cash transactions.
- Low-income, elderly, unbanked, and underbanked populations—who rely disproportionately on cash—bear the friction and cumulative cost of rounding, while digital-payment users are unaffected.
The full analysis lists 5 implications of this text.
Who stands to gain
U.S. Mint (reduced production costs); Retail and service businesses (reduced cash-handling costs, rounding in their favor on customer paym