On Friday, Oct. 29, Representatives Debbie Dingell (D-Mi.) and John Moolenaar (R-Mi.) led a group of 15 bipartisan colleagues from six states in sending a letter to U.S. Mint Director David Ryder. The letter urges the Mint to work with domestic coin recyclers as the agency considers changes to its Mutilated Coin Redemption Program that would exclude recycled coins. According to the Mint’s Notice of Proposed Rulemaking to the Federal Register on May 5, coins damaged through any industrial or recycling process would not be accepted—excluding domestic recycling processors from participating.

Recyclers and the Mutilated Coin Program

Recovered coinage has become an integral part of many recycling companies’ operations, product mix, and bottom lines. David Wallace, senior vice president of Huron Valley Steel Corporation, estimates that his company has been participating in the Mint’s redemption program since the 1970s.

“The coins come from automobiles, washing machines, or vending machines that go through the shredders,” Wallace says. “If a car has been in service for 12 to 14 years, over that time some change inevitably falls from pockets or is otherwise dropped in the car. It’s not a lot in any one car, but if you multiply it by all the cars shredded every year it comes out to a lot of money. The mutilation occurs when the coins go through the auto shredders. They wind up in the Zorba because they’re not magnetic.”

Suspension of Redemption Program

Around 2003, much of the Zorba generated in the U.S. began going to China because of the country’s high demand for aluminum. Throughout the 2000s and early 2010s, the Mint began receiving a growing number of coins from foreign participants. Believing the coins may be counterfeit, the Mint suspended the program in 2015. The agency briefly resumed the program in 2018 with new guidelines and certification for submission before shutting it down again in 2019.

During that period, ISRI advocated for resumption of the program. In its comments to the Mint’s proposed rulemaking, the association argued the reason behind the increase in coins from foreign suppliers was not that they were counterfeit but because of the volumes of  Zorba being exported. “Handpicking of the material resulted in a far greater quantity of coins being recovered than ever before, hence the sudden increase in the amount of U.S. coins being redeemed at the Mint by foreign participants.”

ISRI suggested the Mint create a qualified redemption program for participants who have presented coins before and are willing to undergo site visits and audits. During the initial suspension in 2015, ISRI recommended establishing a registered supplier program. Participants would be required to register with the Mint and provide basic information like business addresses and contacts and agree to allow random inspections by the Mint. The Mint incorporated these recommendations into the rule it published in December 2017. However, many of the recommendations were never implemented before the Mint suspended the program again in 2019.

Despite Suspension Recyclers Keep Collecting

Throughout both suspensions, the Mint never indicated plans to end the program, so recyclers continued collecting and storing these coins. “[The Mint] had talked about developing certification and methods to eliminate counterfeit material, and then out of the blue this [proposal] came,” recalls Mark Weintraub, general counsel at Reserve Management Group. “We were all still producing material in anticipation that the Mint would decide how to take the material. There are inventories of this material, and we have no way to monetize it.”

Barring recyclers from participating has repercussions for the businesses, from the employees involved to the resources invested. “The coins don’t fall out by themselves,” Weintraub says. “It’s a complicated technological process, and it involves individuals whose responsibility is going through the material to eliminate nonconforming material. What are you going to do with those product lines if the program is shut down?”

Since the initial suspension, ISRI has urged the Mint to accept the coins recyclers have been collecting. Recyclers are more than willing to go through additional requirements and procedures if it means they can continue participating in the program. “Recyclers don’t mind jumping through hoops,” says Billy Johnson, ISRI’s chief lobbyist. “We hope the Mint sees there are ways to continue this program, and we’re willing to work with the Mint to do it.”

Bipartisan Letter to the Mint

In September, Huron Valley Steel and its sister company Fritz Enterprises had the opportunity to meet with Rep. Dingell and tell her about this issue. “Our Michigan facilities are in her district in Michigan, and she was interested in helping us,” Wallace says. “She particularly wanted to do this on a bipartisan basis.” Once the companies met with Rep. Moolenaar a few weeks later, Dingell’s office drafted the letter while Wallace and William Elson, senior vice president at Fritz Enterprises, provided edits and answered questions.

The letter argues that excluding recyclers from the program will not only increase costs but also cause negative environmental impacts “by requiring the U.S. Treasury to mint all new coins from primary metals rather than recycling these materials through the repurchase program.”

The congressmembers urge the Mint to work with recyclers on establishing safeguards under the final rule. “It is crucial we preserve the integrity and security of this important program,” the letter notes. “It is also important to not eliminate the tender of mutilated coins by, or to impose artificial volume limitations upon, U.S. companies that have provided mutilated coins to the Mint without issue for decades.”

Johnson believes the letter should make the Mint aware that Congress is paying attention to the final rule on the program. “The program isn’t statutory, so it’s not written by a law, it’s a discretionary program, meaning the agency is able to choose how it wants to run it,” he explains. “A letter like this will get the Mint’s antenna up. The agency will need to be thoughtful about how it writes the new regulation because members of congress will be calling if it doesn’t come out right.”

Weintraub hopes the agency recognizes it can trust domestic suppliers and allow recyclers to continue participating in the program. “Most, if not all, domestic suppliers that have worked with ISRI on this issue have offered to participate in a certification program and agreed to have their facilities inspected by the Mint,” he says. “There’s no company that hasn’t been forthcoming. There’s transparency on the part of ISRI members toward the Mint.”

Additional co-signers of the bill included: Representatives Mike Rogers (R-Ala.), Haley Stevens (D-Mich.), Tim Walberg (R-Mich.), Andy Levin (D-Mich.), Fred Upton (R-Mich.), Raúl M. Grijalva (D-Ariz.), Larry Buschon, M.D. (R-Ind.), David Joyce (R-Ohio), Bob Gibbs (R-Ohio), Lisa McClain (R-Mich.), Jack Bergman (R-Mich.), Peter Meijer (R-Mich.), and Rodney Davis (R-Ill.).

Photo Courtesy of Huron Valley Steel Corporation.

Hannah Zuckerman

Hannah Zuckerman

Hannah is a Writer & Editor for ISRI's Scrap News. She's interested in a wide range of topics in the recycling industry and is always eager to learn more. She graduated from Bryn Mawr College, where she majored in History and a minored in Creative Writing. She lives in Arlington, Virginia with her husband.