The Measurement Gap

Section 5 of the Common Cents Act (H.R. 3074), passed by the House of Representatives on July 14, 2026, directs the Treasury and the Federal Reserve to assess the impact of penny supply disruptions and rounding practices on low-income communities, older consumers, and debanked, unbanked, and underbanked individuals. This paper examines whether that question can be answered with existing data.

Our audit of the empirical literature, from Lombra (2001) through the Federal Reserve Bank of Richmond (2025), finds that the published estimates of rounding's consumer cost rest on posted-price simulations, self-reported survey diaries, or macro price indexes. To our knowledge, no published study anywhere has measured observed, per-transaction rounding outcomes at the point of sale, and no public authority in the United States collects such data. The population Congress named is precisely the population that transacts most in cash, so the distributional question is real. But cash rounding occurs on exactly the transactions that leave no independent settlement record.

The House-passed text requires, within 90 days of enactment, a public Federal Reserve report outlining a strategic plan for penny orders and deposits at commercial coin terminals. Within that report, the Secretary of the Treasury must deliver an assessment of the impact of penny supply and demand disruptions, and of rounding practices for check cashing, on the named populations, including feedback from state and local entities and recommendations to Congress. Follow-up evaluation reports are due 6, 18, and 30 months after the strategic plan.

Two features matter analytically. The scope names specific populations, which makes it a distributional question: not whether rounding costs consumers in aggregate, but whether it costs particular consumers. And the practice under assessment is one that federal law does not mandate and does not track. The Treasury is being asked to measure the effects of a voluntary, untracked practice on populations defined by their reliance on the one payment method that produces no independent settlement record.

The distributional concern is grounded in measurable usage differences. The Federal Reserve's 2025 Findings from the Diary of Consumer Payment Choice, based on October 2024 data, reports that cash accounted for 14 percent of consumer payments overall, but 24 percent for households earning under 25,000 dollars against 9 percent for households earning over 150,000 dollars. Older adults rely on cash more than younger cohorts.

Symmetric rounding, consistently applied to uniformly distributed totals, is close to neutral, and the best survey evidence supports that expectation in aggregate. The distributional risks live in the departures from that ideal, and each is currently unmeasurable.

• Asymmetric application. Neutrality assumes the method is followed. Price endings are not uniform, and a large share of posted prices end in 9. Whether realized cash totals round up more often than down, for which customers, at which merchants, is exactly the unobserved quantity.
• Rounding applied in error to electronic payments. Any rounding of a card or EBT transaction is an overcharge under every enacted framework. We found no central mechanism that tracks whether it happens.
• SNAP equal treatment. Federal rules require that SNAP customers receive the same prices and terms as cash customers. No public data shows how that resolves at actual registers.
• Tax-base errors. Most enacted state frameworks compute tax on the pre-rounded total. Rounding before tax miscomputes the liability, and the frequency of that error in practice is unknown. State by state treatment is tracked in the legislation tracker.
• Prospective litigation exposure. Analysts have warned of exposure where advertised prices and rounded charges diverge. We are aware of no adjudicated rounding case as of this writing, and present this as prospective risk rather than established harm.

Regulators have faced this structure before, a distributional question about a diffuse, high-volume practice, and the durable answer has been per-transaction records. The Home Mortgage Disclosure Act converted fair-lending assessment from complaint anecdotes into loan-level data covering roughly 90 percent of the mortgage market. The analogy to cash rounding is direct and limited. Direct, because a per-transaction record of the rounding applied, its direction, its amount, and the payment type would convert the Section 5 question from estimated to observed. Limited, because nothing in the analogy requires new burdens on consumers or changes to who bears rounding.