The U.S. Mint intends to revise its regulations relating to the exchange of uncurrent, bent, partial, fused, and mixed coins, the agency announced May 5. Under the proposed rulemaking, the Mint would prohibit redemption of coins submitted from outside of the U.S. It also would prohibit domestic recyclers from submitting coins damaged during the recycling process. While the Mint aims to enhance the integrity of its coin redemption program and prevent fraud, these revised regulations would negatively impact the recycling industry and potentially the environment.
For decades, the Mint’s coin-redemption program received damaged coins collected in the recycling of used cars, vending machines, laundry machines, and other sources. Through the program, the Mint would pay for coins on a one-to-one basis (a penny for a penny, a nickel for a nickel, etc.). “These coins get twisted, bent, or fused together,” says Billy Johnson, ISRI’s chief lobbyist. Advances in sorting technology and new machinery that can identify small objects have allowed recyclers to purposefully recover large quantities of coins easily and more quickly. According to ISRI, recovered coinage has “become an integral part of many recycling companies’ operations, product mix, and bottom lines.”
Under the proposed rule, coins damaged in industrial processes would not be eligible for redemption, making it difficult for recyclers to continue participating in the program. The processes include “shredders, burnishers, incinerators, exposure to elevated temperatures, or coins that have been drilled, punctured ground, polished, etched, or chemically treated by any industrial or recycling process.” The Mint will also establish weight and shipment limits for a maximum of 1,000 lbs. of coins per month per participant. This limit would be onerous for recyclers but the other part of the ruling prevents them from submitting coins up to that amount because the coins have gone through a recycling process.
Though Johnson anticipates an uphill climb, ISRI will submit comments to the Mint by the agency’s July 6 deadline. The association will again recommend the Mint establish a more rigorous certification program to accept coins generated by domestic recycling operations. Before the latest suspension, the redemption program involved an inspection process requiring participants to certify the coins were genuine. According to the Mint, damaged coins present a high risk of being counterfeit because their condition makes them difficult and time-consuming to evaluate. Since the coins are damaged during the recycling process, the Mint claims they’re broken and can’t be reused. Johnson insists the coins still are money and recyclers can authenticate them for redemption.
This is not the first time ISRI has recommended a certification program to the Mint. In 2015, when the Mint suspended the redemption program to assess its security, ISRI suggested on establishing a registered supplier program. Interested participants would be required to register with the Mint and provide basic information—physical business address and contact information—and agree to allow random inspections by the Mint. Recyclers would be willing to undergo such rigorous certification because the redemption program is an important aspect of their businesses, Johnson notes.
After reinstating the redemption program in 2018 with revisions that included new guidelines and certifications for submissions, the Mint shut it down again in 2019. ISRI asked the Mint for information while recyclers continued collecting and stockpiling coins throughout the period. “There’s value for all those coins,” Johnson says. “Our members are sitting with warehouses full of damaged coins that they’ve collected and that they’ve effectively paid for with no way of getting their money back.”
The Mint’s proposed rule would not only hurt recyclers; it could lead to negative environmental impacts. “Getting rid of the coins and the material in them—copper, silver, zinc—means more mining, and a lot of the material isn’t mined in the U.S.,” Johnson notes. Some of the countries that mine these materials are not friendly to the U.S. or may not follow safety or environmentally friendly practices. ISRI intends to also pursue this issue with Congress.
President Joe Biden’s administration has indicated a focus on the environment and the U.S. worker. Resuming the redemption program would protect those interests by promoting more recycling and less mining for materials, Johnson notes. ISRI will recommend funding and putting a rigorous certification process in place. “The members I’ve spoken to would be happy to go through a certification process and willing to have their facilities inspected,” Johnson says.