82 FR 43730 - Exchange of Coin

DEPARTMENT OF THE TREASURY
United States Mint

Federal Register Volume 82, Issue 180 (September 19, 2017)

Page Range43730-43732
FR Document2017-19885

The United States Mint proposes to revise its regulations relating to the exchange of uncurrent, bent, partial, fused, and mixed coins. The proposed revisions include updates to redemption rates and procedures previously proposed in the Federal Register on July 16, 2014, as well as revisions that will enhance the integrity of the acceptance and processing of bent and partial United States coins.

Federal Register, Volume 82 Issue 180 (Tuesday, September 19, 2017)
[Federal Register Volume 82, Number 180 (Tuesday, September 19, 2017)]
[Proposed Rules]
[Pages 43730-43732]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19885]


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DEPARTMENT OF THE TREASURY

33 CFR 100

United States Mint


Exchange of Coin

AGENCY: United States Mint, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Mint proposes to revise its regulations 
relating to the exchange of uncurrent, bent, partial, fused, and mixed 
coins. The proposed revisions include updates to redemption rates and 
procedures previously proposed in the Federal Register on July 16, 
2014, as well as revisions that will enhance the integrity of the 
acceptance and processing of bent and partial United States coins.

DATES: Send comments on or before November 3, 2017.

ADDRESSES: The United States Mint invites comments on all aspects of 
this proposed revision. You may send comments, identified by docket 
number and/or RIN number, by any of the following methods:
     Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for sending comments.
     Mail: Submit all written comments to Mutilated Coin 
Redemption Program; Financial Directorate; United States Mint; 801 9th 
Street NW., Washington, DC 20220.
     Hand Delivery/Courier: Same as mail address.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
rulemaking. All comments received will be posted without change to 
regulations.gov, including any personal information provided. For 
additional information on the rulemaking process, see the ``Public 
Participation'' heading of the SUPPLEMENTARY INFORMATION section of 
this document.

FOR FURTHER INFORMATION CONTACT: Sheila Barnett, Legal Counsel, Office 
of the Chief Counsel, United States Mint, at (202) 354-7624 or 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The Treasury Regulations appearing at 31 CFR part 100, subpart C, 
are promulgated under 31 U.S.C. 5120, and relate to the exchange of 
uncurrent, bent, partial, fused, and mixed coins. The last amendment to 
31 CFR part 100, subpart C, was on August 23, 1999. Since then, the 
United States Mint has identified portions of the regulations in need 
of revision to update redemption rates and procedures, and to enhance 
the integrity of the acceptance and processing of bent and partial 
United States coins.
    The first category of proposed revisions would update and improve 
the redemption process of bent and partial coins to enhance security 
and ensure the integrity of United States coinage. These revisions were 
not previously proposed. The revisions would establish procedures for 
certifying participants based on submission amounts and frequency, 
sampling submissions to authenticate material, conducting site visits 
for certain participants, and requiring information on how the 
submission came to be bent or partial. The revisions will also inform 
submitters of required banking information. Lastly, the revisions would 
provide the United States Mint discretion to cease processing 
submissions that appear to be part of an illegal scheme, or contain 
material that is not identifiable as bent or partial United States 
coinage.
    The second category of proposed revisions, previously proposed in 
79 FR 41468, July 16, 2014, relates to the redemption rates for 
uncurrent coins and bent and partial coins that have been withdrawn 
from circulation. For uncurrent coins, the revision would clarify the 
procedure for redemption by instructing the public to deposit the 
uncurrent coins with a financial institution that will accept them, or 
with a depository institution that has a direct relationship with a 
Federal Reserve Bank. The revision would make clear that a Federal 
Reserve Bank will redeem uncurrent coins based on the policies 
described in the Federal Reserve's Operating Circular 2.
    For bent or partial coins, the proposed revision would update the 
redemption rates of certain coins to reflect the current values and 
compositions of coins being redeemed. For example, in the existing 
regulation, the redemption rate for one-cent coins is $1.4585 per 
pound; this redemption rate was derived from the weight of brass one-
cent coins (3.11 grams or 0.1097 ounces each), which the United States 
Mint has not minted and issued since 1982. In 1983, the United States 
Mint began minting and issuing only copper-plated zinc one-cent coins, 
which weigh 2.50 grams or 0.0882 ounces each. Due to the weight 
difference, a pound (the minimum weight for redemption) of copper-
plated zinc one-cent coins contains a higher quantity of coins than a 
pound of brass one-cent coins. The proposed revisions would make the 
redemption rate $1.8100 for a pound consisting solely of copper-plated 
zinc one-cent coins. For brass one-cent coins, or a mix of both brass 
and copper-plated zinc one-cent coins, the lower redemption rate of 
$1.4585 will apply. A similar update would be made to the redemption 
rate for $1 coins.
    The third category of proposed revisions, also previously proposed 
in 79 FR 41468, July 16, 2014, would clarify that the United States 
Mint will not accept fused coins. The United States Mint will also not 
accept mixed coins (coins of several alloy categories presented 
together) for redemption, with the exception of bent or partial one-
cent coins and $1 coins that are presented in mixed years.

[[Page 43731]]

    The fourth category of proposed revisions puts the public on notice 
that the Director of the United States Mint may provide information 
pertaining to any bent or partial coin submission to law enforcement 
officials or other third parties for purposes of investigating related 
criminal activity or for purposes of seeking civil judgment. The 
revisions would also notify potential participants that they may be 
held criminally and/or civilly liable, fined, and/or imprisoned for 
fraudulent submissions.

II. Public Participation

    The United States Mint previously proposed updates to redemption 
rates and procedures in 79 FR 41468, July 16, 2014, and requested 
comments. The United States Mint received one comment, but it was not 
responsive to the proposed updates. A final rule was not published.
    In 81 FR 75922, Nov. 1, 2016, the United States Mint issued a 
request for public comment on new ways to enhance the integrity of the 
acceptance and processing of bent and partial coins. Seventeen comments 
were received and reviewed. The majority of comments were submitted by 
individuals or entities that previously exchanged bent or partial coins 
with the United States Mint.
    In general, most comments expressed support for requiring 
participant certification, particularly for participants submitting 
large quantities of bent or partial coins. Many comments expressed 
concern with the cost and feasibility of coinage material 
authentication but supported sampling or spot testing by the United 
States Mint.
    Many comments supported the suggestion of requiring chain of 
custody information regarding the bent or partial coin submissions. 
Comments from stakeholders in the recycling industry, however, 
discussed the difficulty they face in tracing coins recovered by auto 
and appliance shredding, and therefore recommended that recyclers be 
considered the point of origin. Multiple comments noted the importance 
of documenting the chain of custody of coins that had circulated 
outside of the United States.
    The suggestion of annual limitations on submissions was largely 
disfavored by those who submitted comments. Many comments described a 
backlog of bent or partial coins from the suspension of the exchange 
program and a lack of alternative forums to redeem such coins.

III. Procedural Analysis

Regulatory Planning and Review

    The Office of Management and Budget has determined that this 
proposed rule does not constitute a ``significant regulatory action'' 
under Executive Order 12866 or Executive Order 13771.

Regulatory Flexibility Act Analysis

    It is hereby certified that the proposed revisions will not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, a regulatory flexibility analysis under the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., is not required. First, the 
regulations do not directly regulate any entities. The redemption of 
uncurrent, bent, or partial coins is a discretionary service offered to 
the public; participation is voluntary. Second, many of the coins 
presented for redemption in the past were submitted by individuals 
transacting with the United States Mint in their own names. The number 
of entities tendering significant quantities of coins for redemption is 
small. Even if each such individual or entity qualified as a ``small 
entity'' within the meaning of 5 U.S.C. 604(a), the United States Mint 
does not believe that the proposed revisions are likely to have a 
significant economic impact. The revisions do not change or limit the 
scope of what may be submitted for redemption or who may submit them. 
The revisions may require additional information from participants to 
deter potential fraud and abuse, but the added administrative costs for 
participants are expected to be minimal.

IV. Request for Comment

    Before the proposed revisions to the Treasury Regulations at 31 CFR 
part 100, subpart C, are adopted as final regulations, the United 
States Mint will consider any comments that are submitted to the bureau 
as prescribed in this preamble under the ``Dates'' and ``Addresses'' 
headings. The United States Mint and the Department of the Treasury 
request comments on all aspects of the proposed revisions.

List of Subjects in 31 CFR Part 100

    Coins.

    For the reasons set forth in the preamble, the United States Mint 
proposes to revise 31 CFR part 100, subpart C as follows:

PART 100--EXCHANGE OF PAPER CURRENCY AND COIN

Subpart C--Request for Examination of Coin for Possible Redemption
Sec.
100.10 Request for examination of uncurrent coin for possible 
redemption.
100.11 Request for examination of bent or partial coin for possible 
redemption.
100.12 Exchange of fused or mixed coin.
100.13 Notices.

PART 100--EXCHANGE OF PAPER CURRENCY AND COIN

Subpart C--Request for Examination of Coin for Possible Redemption


Sec.  100.10   Request for examination of uncurrent coin for possible 
redemption.

    (a) Definition. Uncurrent coins are whole U.S. coins which are 
merely worn or reduced in weight by natural abrasion yet are readily 
and clearly recognizable as to genuineness and denomination and which 
are machine countable.
    (b) Redemption process. The United States Mint will not accept 
uncurrent coins for redemption. Members of the public wishing to redeem 
lawfully held uncurrent coins must deposit the uncurrent coins with a 
bank or other financial institution that will accept them, or with a 
depository institution that has established a direct customer 
relationship with a Federal Reserve Bank. A Federal Reserve Bank will 
redeem uncurrent coins, based on the policies described in the Federal 
Reserve's Operating Circular 2.
    (c) Criteria for acceptance. Depository institutions that redeem 
uncurrent coins must sort the coins by denomination into packages in 
accordance with the Federal Reserve's Operating Circular 2. The Federal 
Reserve Banks have the right to reject any shipment containing objects 
that are not U.S. coins or any contaminant that could render the 
uncurrent coins unsuitable for coinage metal.
    (d) Redemption sites. The Federal Reserve Banks and branches listed 
in Sec.  100.17 are the only authorized redemption sites at which a 
depository institution that has established a direct customer 
relationship with a Federal Reserve Bank may redeem uncurrent coins.


Sec.  100.11   Request for examination of bent or partial coin for 
possible redemption.

    (a) General. Lawfully held bent or partial coins of the United 
States may be submitted to the United States Mint for examination in 
accordance with the provisions in this subpart. Any submission under 
this subpart shall be deemed an acceptance of all provisions of this 
subpart.
    (b) Definitions. (1) Bent coins are U.S. coins which are bent or 
deformed so as to preclude normal machine counting

[[Page 43732]]

but which are readily and clearly identifiable as to genuineness and 
denomination.
    (2) Partial coins are U.S. coins which are not whole; partial coins 
must be readily and clearly identifiable as to genuineness and 
denomination.
    (3) Participants are individuals or businesses that submit coins 
through the redemption process.
    (c) Redemption process.
    (1) Depending on submission amount and frequency, participants may 
be subject to a certification process by the United States Mint. The 
established annual weight threshold and details about the participant 
certification process will be published on the United States Mint's Web 
site. If certification is required, it must be done prior to 
submission.
    (2) All submissions for review shall include an estimate of the 
value of the coins and an explanation of how the submission came to be 
bent or partial. The submission should also contain the bank account 
number and routing number for a checking or savings account at a bank 
or other financial institution (such as a mutual fund, brokerage firm, 
or credit union) in the United States.
    (3) Participants may be required to provide documentation for how 
the participant came into custody of the bent or partial coins.
    (4) The United States Mint reserves the right to test samples from 
any submission to authenticate the material. The size of the sample 
will be limited to the amount necessary for authentication. Testing may 
result in partial or complete destruction of the sample.
    (5) The United States Mint reserves the right to conduct site 
visits for participants over a certain volume threshold to verify 
information provided to the United States Mint.
    (6) No redemption will be made when:
    (i) A submission, or any portion of a submission, demonstrates a 
pattern of intentional mutilation or an attempt to defraud the United 
States;
    (ii) A submission appears to be part of, or intended to further, 
any criminal activity;
    (iii) A submission contains a material misrepresentation of facts;
    (iv) Material presented is not identifiable as United States coins. 
In such instances, the participant will be notified to retrieve the 
entire submission, at the participant's sole expense, within 30 days. 
If the submission is not retrieved in a timely manner, the entire 
submission will be treated as voluntarily abandoned property, pursuant 
to 41 CFR 102-41.80, and will be retained or disposed of by the United 
States Mint;
    (v) A submission contains any contaminant that could render the 
coins unsuitable for coinage metal. In such instances, the participant 
will be notified to retrieve the entire submission, at the 
participant's sole expense, within 30 days. If the submission is not 
retrieved in a timely manner, the entire submission will be treated as 
voluntarily abandoned property, pursuant to 41 CFR 102-41.80, and will 
be retained or disposed of by the United States Mint; or
    (vi) A submission contains more than a nominal amount of uncurrent 
coins. In such instances, the participant may be notified to retrieve 
the entire submission, at the participant's sole expense, within 30 
days. If the submission is not retrieved in a timely manner, the entire 
submission will be treated as voluntarily abandoned property, pursuant 
to 41 CFR 102-41.80, and will be retained or disposed of by the United 
States Mint.
    (7) The Director of the United States Mint, or designee, shall have 
final authority with respect to all aspects of redemptions of bent or 
partial coin submissions.
    (d) Redemption rates.
    (1) Generally. Participants shall separate bent or partial coins by 
denomination in lots of at least one pound for each denomination 
category. The United States Mint will redeem bent or partial coins on 
the basis of their weight and denomination at the following rates:
    (i) One-Cent Coins: $1.4585 per pound.
    (ii) 5-Cent Coins: $4.5359 per pound.
    (iii) Dime, Quarter-Dollar, and Half-Dollar Coins: $20.00 per 
pound.
    (iv) $1 Coins: $20.00 per pound.
    (2) Exceptions. (i) The United States Mint will redeem one-cent 
coins inscribed with a year after 1982 at the rate set forth at 
subparagraph (1)(i) of this subsection unless such one-cent coins are 
presented unmixed from one-cent coins inscribed with a year before 
1983. The United States Mint will redeem unmixed one-cent coins 
inscribed with a year after 1982 at a rate of $1.8100 per pound.
    (ii) The United States Mint will redeem $1 coins inscribed with a 
year after 1978 at the rate set forth at subparagraph (1)(iv) of this 
subsection unless such $1 coins are presented unmixed from $1 coins 
inscribed with a year before 1979. The United States Mint will redeem 
unmixed $1 coins inscribed with a year after 1978 at a rate of $56.00 
per pound.
    (e) Redemption sites. Coins are shipped at the sender's risk of 
loss and expense.
    (1) Bent and partial coins submitted in quantities less than or 
equal to a threshold established annually will be redeemed only at the 
United States Mint at Philadelphia, P.O. Box 400, Philadelphia, PA 
19105.
    (2) Bent and partial coins submitted in quantities greater than a 
threshold established annually should be scheduled with the United 
States Mint to be sent directly to the authorized recycler(s) of the 
United States Mint.


Sec.  100.12   Exchange of fused or mixed coin.

    (a) Definitions. (1) Fused coins are U.S. coins which are melted to 
the extent that they are bonded together.
    (2) Mixed coins are U.S. coins of several alloy categories which 
are presented together, but are readily and clearly identifiable as 
U.S. coins.
    (b) The United States Mint will not accept fused coins for 
redemption. The United States Mint will not accept mixed coins for 
redemption, except as provided for in Sec.  100.11(d)(2).


Sec.  100.13   Notices.

    (a) Additional information and procedures about the United States 
Mint's redemption of bent or partial coins can be found on the United 
States Mint's Web site.
    (b) Criminal penalties connected with the defacement or mutilation 
of U.S. coins are provided in 18 U.S.C. 331.
    (c) The Director of the United States Mint may provide information 
pertaining to any bent or partial coin submissions to law enforcement 
officials or other third parties for purposes of investigating related 
criminal activity or for purposes of seeking a civil judgment.
    (d) Whoever intentionally files a false claim seeking reimbursement 
for uncurrent, bent or partial coins may be held criminally liable 
under a number of statutes including 18 U.S.C. 287 and 18 U.S.C. 1341 
and may be held civilly liable under 31 U.S.C. 3729, et seq.

    Dated: September 13, 2017.
Jean Gentry,
Chief Counsel, United States Mint.
[FR Doc. 2017-19885 Filed 9-18-17; 8:45 am]
 BILLING CODE P


Current View
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of proposed rulemaking.
DatesSend comments on or before November 3, 2017.
ContactSheila Barnett, Legal Counsel, Office of the Chief Counsel, United States Mint, at (202) 354-7624 or [email protected]
FR Citation82 FR 43730 

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