National penny shortage has one Washington local government seeking federal fix

The U.S. Treasury stopped minting 1-cent coins last month after a presidential order citing that pennies cost more than three times their face value, and the decision has precipitated a coin shortage in places like Clark County, Wash., where JPMorgan Chase could not fill the county’s penny order, disrupting cash transactions for schools, courts, the sheriff’s office and property-tax payments. County Treasurer Alishia Topper warned departments and said the county may round down cash transactions if pennies run out, highlighting a patchwork response across businesses and local governments as chains such as McDonald’s and Taco Bell already round cash totals. Industry groups and the National Restaurant Association are pushing for federal legislation to standardize rounding—Republican-backed Common Cents Act would round cash to the nearest five cents but has not passed—leaving potential operational disruptions and transaction losses until states or Congress provide uniform guidance.

Analysis

The U.S. Treasury stopped minting 1-cent coins last month after a presidential order citing that pennies cost more than three times their face value, and that decision has created an immediate operational shortage in parts of the payments system. Clark County Treasurer Alishia Topper notified departments that JPMorgan Chase could not fill the county’s penny order, disrupting cash flows used by school districts, courts, the sheriff’s office and property-tax payments that are sometimes made in cash.

Responses are fragmented: large chains such as McDonald’s and Taco Bell are posting notices that cash purchases will be rounded up or down, and the National Restaurant Association is lobbying for a national rounding standard to relieve businesses that retail industry groups say have already absorbed millions in rounding losses. The Common Cents Act, introduced in September to round cash transactions to the nearest five cents, has not been approved, leaving legal and operational uncertainty.

Local-government approaches vary: Topper says Clark County would round down if pennies run out, Washington’s treasury did not respond to requests for guidance, and Oregon’s treasury is still assessing impacts per Eric Engelson. The lack of federal guidance raises the risk of revenue leakage, customer disputes and uneven compliance across jurisdictions until Congress or state treasuries issue uniform policy.

Key Decisions for Investors

• Municipal bond and local-government investors should monitor county treasury disclosures and property-tax collection reports for signs of delayed or reduced cash receipts and request clarity on contingency rounding policies,
• Retail and payments investors should accelerate stress-testing merchant margin models for rounding scenarios and prioritize companies with higher card/digital-payment penetration given reported rounding losses and the current absence of federal standards,
• Credit and bank investors should track legislative action on the Common Cents Act and state treasury guidance as event risks that will materially reduce operational uncertainty; absent passage expect continued localized disruption and reputational risk for affected institutions