Treasury to Invest Surplus Tax and Loan Balances
Legislation signed by the President on October
28, 1977, will allow the Treasury Department
to earn a direct return on temporary
cash surpluses. The new law authorizes the
Secretary of the Treasury to invest any portion
of the Treasury's operating cash for periods
up to 90 days in (1) open-end obligations of
depositaries maintaining Treasury tax and
loan accounts secured by a pledge of acceptable
collateral and (2) obligations of the
United States and its agencies. Besides commercial
banks and mutual savings banks,
qualifying savings and loan associations and
credit unions will be authorized to act as
Treasury depositaries, to receive federal taxes
upon opening Treasury tax and loan accounts,
and to issue interest-bearing obligations
to the Treasury. In lieu of non interest
balances, the Treasury will pay fees to depositaries
for their services in handling tax and
loan accounts and savings bond transactions.