Vol. 3, No. 6, 1977

Treasury to Invest Surplus Tax and Loan Balances
Last Updated: 11/30/77
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.