S. 1525: Common Cents Act

S. 1525 would stop producing new pennies for everyday circulation, but every penny already in circulation would still count as legal tender. So this is not a ban on owning, spending, or accepting old pennies — it is a phaseout of new ones.

The everyday change is in cash transactions. If a total ends in 1, 2, 6, or 7 cents, it may be rounded down; if it ends in 3, 4, 8, or 9 cents, it may be rounded up. For very small cash totals, the bill says a 1-cent or 2-cent purchase may be rounded up to 5 cents.

The bill does not force every business to use rounding. It says people and businesses may round when exact change is not available, and if they do, the rounding must favor the customer when a business is paying cash to a customer or taking cash from one.

Workers paid in cash get a separate protection. If an employer chooses to round a cash payment to an employee, the amount must be rounded up to the nearest 5 cents, not down.

Most electronic payments would not change at all. Credit cards, checks, electronic transfers, gift cards, money orders, and similar payment methods are excluded, so the real effect lands on cash purchases and cash wage payments.

S. 1525 also tries to manage the transition. Treasury would have 60 days to assess effects on low-income, older, unbanked, and underbanked people, and the Federal Reserve would have 90 days to publish a plan for handling penny orders, deposits, and coin distribution during the phaseout.

The bill also changes the rules for nickels. It would let Treasury use a lower-cost zinc-and-nickel design for 5-cent coins and allow those coins to weigh between 4 and 6 grams, which the bill says is meant to reduce production costs while limiting problems for coin machines.