BAKERSFIELD, Calif. (KGET) — To the long list of COVID-19 victims, add this: U.S. coins. There is a severe shortage across the country of nickels, dimes, quarters and pennies, and it’s almost entirely a direct consequence of the coronavirus pandemic.
The Federal Reserve has been aware of the issue for a few weeks now, but it is finally filtering down to the local level, as many in Bakersfield may have noticed. What’s going on here?
The Federal Reserve, which oversees the national coin inventory and its distribution to banks, has been forced to start strategically allocating its supply, and the coin shortage has been rolling downhill for about three weeks now.
Here’s the 50-cent tour of the issue, courtesy of Michael George, senior vice president at Valley Strong Credit Union.
“There’s less retail that’s open right now,” George said, “where a lot of people would get small bills and change, whether it be restaurants or retail shopping stores. The other (factor) is that less people are using the lobbies (of their banks). They’re using their debit cards to go do transactions — so that’s an exact dollar amount. They’re using ATMs to get cash, which is larger than the small bills.
And they’re using online and mobile banking a lot more.”
It’s so bad, many local stores are requiring exact change or electronic transfers using debit cards and credit cards. Exacerbating the problem is the fact that COVID-19 has been sweeping through banks across the U.S., including Bank of America, to name one that’s been particularly hard hit. More than 50 Bank of America branches in South Florida are closed, for example, and South Carolina has also been significantly affected
Bakersfield resident Melody Morris, a Bank of America customer, had noticed it was more challenging to get her funds. She said she had tried and failed to complete a transaction at the California Avenue branch’s ATMs after encountering a line of 30 people.
“I thought, OK, today I would try here (at the Ming Avenue branch),” she said, “but I can’t get the money out through the ATM at all. So then I was able to stand in line here inside, and they were able to transfer my money. “
Our currency system is based on circulation — the money must constantly move — and it has largely stopped because of the pandemic. Retail stores, restaurants, bars — they’ve been closed, or seriously restricted. So those dead presidents, in effect, have been on lockdown too.
Coin deposits at banks are down 50 percent since march. People are avoiding vending machines, transit hubs and laundromats, which typically receive influxes of coins.
Can’t the Fed just make more coins? Not with employees of the U.S. Mint staying home as part of coronavirus safety efforts. And making more coins doesn’t necessarily solve the problem: $48 billion in coins are already in circulation.
A coin task force, established a couple weeks ago, is expected to release recommendations at the end of the month.
In the meantime, Bakersfield residents might be well advised to remember all of their coin-in-the-fountain wishes and make the actual deposit at a later date.