By the Ulman Public Policy Team
On July 14, the U.S. House of Representatives passed the Common Cents Act (H.R. 3074) by a voice vote. The bill directs the U.S. Department of Treasury to permanently halt the minting of pennies for general circulation and establishes a framework for rounding cash transactions to the nearest five cents. The bill was introduced in April 2025 by Reps. Lisa McClain (R-MI-9) and Robert Garcia (D-CA-42).
The Common Cents Act and its Impact
In February 2025, President Donald Trump directed the Secretary of the Treasury, Scott Bessent, to stop the production of pennies. Following that directive, the Mint received its final supply of blank pennies in June 2025. The Common Cents Act was introduced to officially codify the elimination of the penny into law.
Eliminating the penny requires businesses to change how they give customers change during cash transactions. The Common Cents Act establishes guidelines for businesses and consumers in cash transactions where exact change in pennies is not available. The bill permits businesses and consumers to round down to the nearest nickel in cases where the covered amount ends with 1 cent, 2 cents, 6 cents, or 7 cents, and to round up to the nearest nickel in cases where the covered amount ends with 3 cents, 4 cents, 8 cents, or 9 cents.
The bill also authorizes the Secretary of the Treasury to prescribe an alternative nickel coin with a zinc inner layer and a nickel outer layer. Currently, five-cent coins are composed of 75% copper and 25% nickel. However, nickel has grown considerably more expensive to source and the Mint’s FY2025 report marked nickels’ unit cost as 13.31 cents. As long as testing confirms this alternative composition reduces production costs, and has minimal adverse impact on the machines accepting the coins, the provision provides the Treasury with the flexibility to phase in a cheaper coin without any particular timeline.
Furthermore, the bill requires the Board of Governors of the Federal Reserve to develop a strategic plan and submit periodic reports to Congress on the operation of coin terminals and stability of the coin distribution system. With coin terminal locations reporting shortages following the Mint’s cessation of penny output, these reports will give financial institutions and consumers earlier visibility into disruptions like the penny-order suspensions some coin terminals imposed last year.
Senate Action
On July 15, the House bill was received by the U.S. Senate, read twice, and referred to the Senate Committee on Banking, Housing, and Urban Affairs. A Senate companion bill, S. 1525, was introduced in April 2025 by Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY). A spokesperson for Sen. Lummis indicated that there are plans to move the bill quickly through the Senate by hotline before the August recess. Sen. Lummis’ seat on the Senate Committee on Banking, Housing, and Urban Affairs could help facilitate that expedited timeline.