The Federal Reserve announced it will resume accepting penny deposits from banks and credit unions at commercial coin distribution locations beginning January 14, 2026. The decision reverses a previous suspension that had affected over 100 of the Fed's 165 coin terminals nationwide, creating significant challenges for financial institutions and retailers.
The Federal Reserve Financial Services announced new actions to better support the circulation of pennies for commercial activity, reversing a suspension that had left banks and retailers struggling with coin shortages.
Key Announcement
Beginning January 14, 2026, the Federal Reserve will resume accepting pennies from banks and credit unions at commercial coin distribution locations. This reverses the suspension that had been in effect at numerous terminals since late 2025.
Timeline of the Suspension
The suspension developed rapidly after penny production ended:
- June-August 2025: Large-scale penny minting ended
- Early October 2025: 41 of 165 Fed coin terminals stopped handling pennies
- October 17, 2025: American Bankers Association sent letter urging Fed to maintain penny services
- November 20, 2025: Over 100 terminals (more than 60%) had suspended penny services
- December 2025: Congressional Democrats demanded guidance; Treasury issued rounding guidance
- January 8, 2026: Fed announced reversal
- January 14, 2026: Penny deposits resume
Industry Response
The American Bankers Association applauded the decision. "We applaud the Federal Reserve's decision to resume accepting penny deposits at coin distribution locations beginning Jan. 14, which will help strengthen coin circulation nationwide," said Rob Nichols, ABA President and CEO.
The ABA had previously raised concerns that the Fed's policy of refusing banks' excess penny deposits at coin terminals had blocked circulation and created artificial shortages.
Federal Reserve Statement
The Federal Reserve emphasized that its role in coin operations is limited to distributing coins to banks and credit unions on behalf of the U.S. Mint, which remains the nation's issuing authority. The Fed does not provide coins directly to businesses or consumers.
"Our monitoring of the flow of penny deposits from financial institutions as these changes take effect will determine whether some subsequent expansion of ordering options for pennies is feasible, given that penny production has ended," the Fed stated.
Impact on Commerce
The suspension had created significant challenges:
- Major cities affected included New York, Chicago, St. Louis, Dallas, and San Francisco
- Retailers faced checkout friction with cash-paying customers
- Some businesses were forced to round transactions, causing confusion
- Banks had been unable to accept customer penny deposits in some regions
Looking Ahead
While this move eases immediate pressure, it does not restart penny production. The Federal Reserve will monitor penny deposit flows to determine if expanded ordering options become feasible. With approximately 250 billion pennies estimated to remain in circulation, the coins will continue to phase out naturally over time as they are lost, damaged, or collected.