WASHINGTON — Federal Reserve Chairman Jerome Powell told Congress Wednesday that the central bank is attempting to rectify a shortage of coins being delivered to financial institutions around the country as a result of the coronavirus pandemic.
“With the partial closure of the economy, the flow of coins though the economy has kind of stopped,” Powell said at a House Financial Services Committee hearing one day after he testified to the Senate Banking Committee.
Powell encouraged banks to reach out to their regional Federal Reserve banks to deal with the operational challenge of an interruption in coin delivery.
The hearing also highlighted Powell’s support for temporarily easing a capital rule known as the Collins amendment in order to help banks better confront the pandemic crisis. But he opposed a plan proposed by Democrats to give consumers digital wallets housed at the Fed as a means of accessing coronavirus relief payments.
Members of the committee from both parties, meanwhile, praised Powell for the central bank’s handling of the economy through the coronavirus pandemic, bucking some of the criticism he has received from President Trump during his tenure.
“It’s amazing to see what you’ve done, the impact it’s had, and we certainly appreciate all of your efforts,” said Rep. Blaine Luetkemeyer, R-Mo.
The discussion of coin shortages came after Rep. John Rose, R-Tenn., told Powell that a number of banks in his district do not know how to deal with a low supply of coin money for their customers.
“I received a call from a bank here in Tennessee’s sixth congressional district yesterday alerting me to the fact they have been notified at the beginning of this week at the Fed that they would only be receiving a small portion of their weekly order of coinage,” Rose said. “According to this banker, his institution will likely run out of coins by Friday or this weekend. And after some preliminary research, I found that many other banks across my district are having the same operational challenge.”
Powell said the partial closings of the economy have led to clogging in the circulation of coins. Regional banks should be able to assist banks coping with coin shortages, he added.
“The whole system of flow has kind of come to a stop,” Powell said. “We are well aware of this. We are working with [the U.S. Mint] and we are working with the reserve banks. And as the economy reopens, we are seeing coins begin to move around again. So if a bank hasn’t already done so, they should certainly be in touch with their reserve bank to report this situation.”
Powell also indicated that he supported Congress temporarily…