U.S. House Passes Bipartisan Bill Codifying End of Penny Production and Establish Cash-Rounding Rules
- The U.S. House passed the bipartisan Common Cents Act (H.R. 3074) to end penny production for general circulation and establish nationwide cash rounding rules when exact change is unavailable.
- The legislation directs the Treasury to stop minting pennies for circulation, allow rounding of cash transactions to the nearest five cents voluntarily, and permits continued penny production for collectors.
- The Federal Reserve must create a strategy to maintain penny distribution during the transition and assess impacts on vulnerable groups, while the Treasury may develop a cheaper five-cent coin if viable.
- The bill moves to the Senate, where a companion bill (S. 1525) has been introduced but not yet advanced out of committee.
The U.S. House of Representatives has passed bipartisan legislation that would formally end the production of pennies for general circulation while establishing nationwide rules for cash transactions when exact change is unavailable.
The Common Cents Act, filed as H.R. 3074, was approved Tuesday under suspension of the rules, a process requiring support from at least two-thirds of members present and voting.
The proposal was introduced by Representative Lisa McClain (R-MI) alongside Representative Robert Garcia (D-CA). It previously advanced through the House Financial Services Committee in a bipartisan 35-13 vote.
Under the legislation, the U.S. Department of the Treasury would be directed to permanently cease producing one-cent coins for general circulation. The U.S. Mint could continue manufacturing pennies for collectors, and all pennies already in circulation would remain legal tender.
The measure would allow businesses and financial institutions to round cash totals to the nearest five cents when exact change cannot be provided. Amounts ending in one, two, six or seven cents could be rounded down, while totals ending in three, four, eight or nine cents could be rounded up.
Rounding would be voluntary rather than required and would apply only to cash payments. Transactions made using credit cards, debit cards, checks, gift cards, electronic transfers or similar payment methods would continue to be charged at their exact amount.
The proposal would also allow the Treasury to develop a potentially less expensive five-cent coin using an inner layer of zinc and an outer layer of nickel, provided testing shows the composition would reduce production costs without substantially disrupting coin-operated machines.
Additionally, the Federal Reserve would be required to develop a strategy for maintaining penny deposits and distribution during the transition and examine the potential effects of shortages and rounding on low-income, unbanked and older Americans.
The Treasury stopped producing pennies for circulation in November 2025 after determining that each one-cent coin cost nearly four cents to manufacture. The decision was projected to save approximately $56 million annually, although the absence of nationwide rounding rules created challenges for some retailers and banks.
The Common Cents Act now heads to the Senate. A companion proposal, S. 1525, was introduced by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), but has not yet advanced out of committee.