U.S. Treasury Eliminates Pennies Production – Here’s What Credit Unions Need to Know

by Nicola Foggie, Chief Regulatory Officer, CrossState Credit Union Association

On November 12, 2025, the U.S. Department of the Treasury officially ceased the production of the penny due to it costing more to produce than it is worth. While pennies will remain legal tender and continue circulating in the economy for years to come, financial institutions and retailers are asking what they might do to prepare for the eventuality where they are no longer available to the public.

Presently, there is no specific legislation or NCUA guidance or regulations directing credit unions on how to prepare for operational, member relations, and policy adjustments. However, there is industry information available along with actions a credit union might take to manage the future potential fallout. For instance, while electronic transactions will not change, cash payments will eventually be rounded to the nearest five cents. 

Here are key guidance and strategy steps along with policy points for credit unions to consider.

Operational Guidance

• Inventory management: As the Federal Reserve’s penny supplies dwindle, credit unions will experience limited availability and should manage remaining inventory effectively. Some regional Fed locations have already stopped distributing pennies, and others will follow as stock is depleted.
• Processing deposits: Continue accepting pennies from members for deposit. Promote recirculation by encouraging them to deposit coins collected at home. If your credit union requires coins to be rolled for deposits, be sure to inform members of your policy.
• Adjust internal systems: Update cash handling procedures and point-of-sale (POS) software to accommodate nickel rounding for cash transactions. This will ensure a smooth transition once the supply of pennies runs out.
• Prepare for increased nickel demand: Anticipate a potential increase in the demand for nickels as they will become the lowest-denomination coin. Be aware that nickels also cost more than their face value to produce, which could lead to a similar debate in the future. 

Member Communication Strategy

• Educate members early: Clearly and consistently communicate with members about the penny phaseout. Inform them that while new pennies are no longer being minted, existing pennies are still legal tender.
• Clarify cash rounding: Explain how cash rounding will work for transactions once pennies are no longer widely available. Use simple examples: a purchase of $1.92 would be rounded down to $1.90, while a purchase of $1.93 would be rounded up to $1.95.
• Promote digital alternatives: Emphasize the convenience of noncash payment options like debit cards, mobile wallets, and online banking, which are unaffected by the change. This can help members transition away from cash for smaller purchases.
• Provide a member FAQ: Develop a list of frequently asked questions to address common concerns, including how to handle deposited pennies and the rounding process. 

Policy Considerations

• Stay informed on legislation: Follow any federal legislation that may affect the rounding process. Organizations like America’s Credit Unions are monitoring proposed bills that could formalize rounding rules and provide legal clarity for merchants.
• Review state and local laws: Check if state or local regulations exist that could impact cash rounding. Some areas may have specific rules regarding equal treatment for cash and card customers.
• Update fee schedules and disclosures: Ensure that any disclosures or informational materials related to cash transactions are updated to reflect the eventual rounding process.
• Consider community impact: Recognize that members who are underbanked or rely heavily on cash will be most affected by the rounding. Monitor member feedback to address any inequities. Some businesses and charities may also be impacted, which could have a ripple effect on your members.

See the July 2025 article from the Federal Reserve Bank of Richmond that explains the “rounding up” steps.

Additionally, while Brinks and other carriers are no longer accepting pennies for deposit to the Federal Reserve, the Fed’s FAQs indicate that depository institutions “may contact their local cash office for an alternate deposit location should their endpoint also cease acceptance of deposits.”

Questions? Email our Compliance Team!