Penn. Town Cites Federal Reg About Pennies as Payment That Expired 50 Years Ago
News outlets repeated the claim while Internet commenters were skeptical.
A story about a man in central Pennsylvania who tried to pay a $25 parking ticket he believed was unjust in pennies went kind of viral on the Internet this week. Officials from the town, Chambersburg, told the man, Justin Greene, he could not pay his fine with pennies, citing a federal regulation pinned to their bulletin board which said that federal law specified "pennies and nickels as small change and not legal tender for debts in excess of 25 cents." It took a borough employee some time to find the rule on the bulletin board, and Greene complained it wasn't fair because the sign was hard to see.
More importantly, however, despite the regulation being repeated uncritically by other outlets who picked up the local paper's story, that small change regulation hasn't been on the books in about 50 years. Snopes explains the rule came out of a law passed in the 19th century that was superseded by the 1965 Coinage Act, which specifically identified coins as legal tender.
An official from the Treasury Department confirmed to Reason on background—because, he said, he did not want it to appear that a Department spokesperson was saying local municipalities could not decline to accept pennies—that the regulation the town cited does not currently exist. The spokesperson, however, pointed to a FAQ page that he said says local businesses and municipalities can choose not to accept payment in coins.
According to Jason Cohen, the finance director of Chambersburg, who spoke to Reason today, borough officials became aware the regulation was outdated because of Internet comments left on the local paper's article on the story. Cohen said no one had ever questioned the regulation before, so it's likely been copied and kept on the bulletin board for half a century. The borough consulted a lawyer after finding out the regulation may no longer be in effect and confirmed that it wasn't. Cohen says the borough is planning to purchase a change counting machine to accept coins as payment. Based on the guidance from the Treasury Department, they may not have to.
As for Greene, who told the local paper he wanted to find another way to inconvenience the borough when making his payment, Cohen says he came in and paid his $25 ticket in cash on Wednesday.
It costs two cents, by the way, to produce a penny, and one of the biggest impediments, politically, to phasing it out could be the job losses that would follow at the U.S. Mint, where the penny makes up 60 percent of coin production.
