What community bankers need to know about the end of penny production

With the federal government discontinuing new penny production, community bankers and the consumers they serve have many questions about what the change will mean for them.

Here’s a breakdown of what is and is not happening with the change to the U.S. penny—and how ICBA is working to gain clarity and address disruptions from a process that has lacked any formal announcement from the Treasury Department.

A lasting debate over the one-cent piece

Given the cost of minting pennies has long exceeded their face value, the United States has been discussing discontinuing production of pennies for decades. Former President Barack Obama once said in an interview that the U.S. should get rid of the penny but has bigger things to do. In 2017, Sen. John McCain’s COIN Act proposed stopping minting pennies for 10 years. Even Hollywood tackled the issue during a 2001 episode of The West Wing.

The debate over the penny culminated in a February 2025 post on Truth Social from President Donald Trump, who called for an end to minting pennies given the cost. With the cost to produce a penny nearing 4 cents, the government is proceeding to end production of the coin.

What community bankers should know about the change

With roughly 240 billion pennies in circulation, the end of penny production has raised many questions for community bankers charged with managing their supply of the coin.

First, the penny is not being removed from circulation, and it remains legal tender. What is changing is the ordering and supply of new pennies, which is being discontinued. Pennies are produced by the U.S. Mint—a bureau of the Treasury Department—but coin distribution to banks is handled by the Federal Reserve.

While Treasury has not issued a formal announcement about the change, the Fed recently released frequently asked questions on anticipated changes to penny ordering and deposits. According to the FAQs, the Fed is committed to accepting deposits of pennies from banks, but it will analyze its penny inventory on a weekly basis. When inventory at a specific location is depleted, FedCash Services will cease fulfilling orders of pennies at that specific location.

ICBA’s call for a comprehensive plan

While there has been no formal announcement from Treasury, it apparently has already discontinued production of the penny. This has created noticeable disruptions in penny availability for community banks, affecting their ability to serve consumers and small businesses.

Given these disruptions and the lack of guidance from Treasury, ICBA recently called on the department to restart production of the one-cent coin and develop a formal plan to phase out the production of the penny.

In the letter, ICBA:

• Noted the absence of an official statement and phaseout plan has led to a penny shortage before any strategy for managing halted production has been implemented.

• Said the lack of clarity surrounding penny processes has created inventory management challenges, resulted in rounding issues and customer dissatisfaction for the retail sector, and left community bankers without definitive guidance for their customers.

“A phaseout plan, along with an official public statement, could help alleviate short-term issues while still fulfilling President Trump’s goal to cease penny production,” ICBA President and CEO Rebeca Romero Rainey said in the letter.

ICBA remains engaged as the shift proceeds

While the end of penny production continues to raise questions from consumers, they can rest assured that community banks will continue to keep customer ledgers down to the penny.

Meanwhile, ICBA will be engaged with Treasury throughout the process to ensure community bankers have the information and educational resources needed to move ahead.