Local banks, businesses deal with national coin shortage

Benjamin Franklin once said, “A penny saved is a penny earned.” 

Of course, the meaning of that short quip dealt with saving money. However, the U.S. Treasury is saying it might be more helpful of you put your spare change in circulation as the country is continuing with a coin shortage. 

According to the Federal Reserve, business and bank closures associated with the COVID-19 pandemic, have significantly disrupted the supply chain and normal circulation patterns for U.S. coins. While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.

“2020 is the year of anomalies,” said David Case, vice president of Schertz Bank & Trust in San Marcos. “A national coin circulation problem is right up there with the infamous paper product crisis witnessed earlier this year.”

He said the Federal Reserve has limited the amount of coin each bank branch may order with only pennies and quarters being available at the moment.  

“This is why you see local businesses advertising ‘exact change only’ when cash is used to purchase goods,” Case added.

The Federal Reserve is working with the U.S. Mint and others in the industry on solutions. As a first step, a temporary cap was imposed on the orders depository institutions place for coins with the Federal Reserve to ensure that the current supply is distributed. In addition, a U.S. Coin Task Force was formed to identify, implement, and promote actions to address disruptions to coin circulation.

Since mid-June, the U.S. Mint has been operating at full production capacity, minting almost 1.6 billion coins in June and is on track to mint 1.65 billion coins per month for the remainder of the year.

As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the rebuilding of coin inventories.