The 102-year-old Infinity Credit Union will stop handling coins at its five Maine locations on Sept. 1 as part of its merger with Deere Employees Credit Union in Illinois, becoming the first financial institution in the state to do so.
The coins curtailment by Maine’s oldest credit union does not appear related to the shortage of them during the height of the COVID-19 pandemic, when business and bank closures slowed circulation. Deere said the change is to keep all of its credit unions, including the Infinity ones in Maine, under the same system focused on digital transactions.
Infinity is the only Maine credit union to institute a no-coins policy, Jen Burke, spokesperson for the Maine Credit Union League, said. It could be among the first in the U.S., but part of a long-term trend. A 2021 Brookings Institution study predicted cash will soon become obsolete worldwide, with payments made with smartphones or cards becoming the norm.
Deere, which started in 1934 to serve employees of the John Deere company, merged with Infinity two years ago. It has 24 branches in Deere locations and others throughout the U.S. The two credit unions are changing their names to Empeople Credit Union.
Signs notifying customers of the coming change worried some patrons, including Andrew Melrose, owner of contractor Melrose Electric in Westbrook. He asked a bank employee whether he still would be able to deposit rolled coins, and the answer was no.
He was told he could deposit a check written for an uneven amount, but if he wanted the change back, the bank would have to write him a check.
“But I can’t cash the check there,” he said. “It’s really ridiculous. It makes it incredibly hard for me to operate.”
He pointed to coin-intensive businesses, including restaurants whose waitstaff won’t be able to deposit tips, and collection jars for animal shelters and other charities, noting Maine’s sales tax of 5.5 percent often produces uneven prices.
“Businesses cannot be expected to make things come out,” he said.
He still plans to stay with the credit union because it would be too difficult to move his payroll to another financial institution. Infinity has Maine locations in Arundel, Bangor, Portland, Scarborough and Westbrook.
Maine banks continue to handle coins, Jim Roche, president of the Maine Bankers Association said. That’s also the case at the state’s Bureau of Financial Institutions, which oversees 17 banks, 12 credit unions and 10 other financial institutions.
“Our office hasn’t received any indication that this is going to be a policy adopted by other banks,” Lloyd LaFountain III, the bureau’s administrator, said.
Counting coins can be laborious for financial institutions whether or not they have counting machines, Burke said. While some states and municipalities have made it illegal for businesses to refuse cash and coins, Maine is not one of them, she said, quoting Federal Reserve guidelines.
There also have been unsuccessful national efforts to get rid of the penny because it is more expensive to make than it is worth. Coins also are getting more expensive to make.
It cost 2.72 cents to make, administer and distribute a 1-cent coin in fiscal 2022, up almost 30 percent from the previous year, according to CoinNews.net. The rise can be traced to fewer shipments of coins and higher prices for nickel, copper and zinc.
The trend away from coins has been a source of viral misinformation, including a 2022 Facebook post that said PNC Bank was no longer taking them. But Canada eliminated its penny in 2012, and two banks in China said last year they would not use banknotes or coins.
Melrose is concerned that Infinity’s move is the first of more to come from financial institutions, who might see coinless operations as a cost-cutting move in favor of online transactions with fees.
“I really think they want to force you to use electronic forms of payment,” he said. “It’s a really bad thing because the elderly use cash and new immigrants do.”