FOR IMMEDIATE RELEASE
Thursday, June 17, 2010

Contact:
Jon Galloway
(573) 751-7595 - Office
(573) 418-2923 - Cell
jon.galloway@treasurer.mo.gov

Treasurer Clint Zweifel says state is set to earn an extra $1 million thanks to new investment rules

JEFFERSON CITY - State Treasurer Clint Zweifel(ZWY-ful) announced today the state will earn an extra $1 million on its investments made in the first six months of 2010 thanks to new investment rules he developed and worked to pass in 2009.

"The new investment rules allow me to be confident in telling taxpayers that for the first time they are getting a fair shake when their money is invested in Missouri financial institutions," Treasurer Zweifel said. "This legislation will return $15 million extra per year when fully phased in beginning in 2014. The fact we will earn an extra $1 million right off the bat shows the legislation is working for Missourians."

Prior to the legislative fix, the state did not receive a competitive interest rate on its investments in Missouri financial institutions. Time deposit investments in financial institutions, which are similar to CDs, were tied by law to the U.S. Treasury yield. That yield has been as low as 0.20 percent in the past two years. Theremoval of the restrictive cap allows Treasurer Zweifel to receive a yield closer to the rates offered by banks to an individual, business or any other government entity in Missouri.

"We have removed the need to choose between getting the best return for taxpayers and investing in Missouri financial institutions," Treasurer Zweifel said. "This is the right thing to do for taxpayers and the right thing to do for the economy."

In 2010, the first $7 million of time deposits held by a financial institution are subject to the U.S. Treasury yield limit, but any deposits above that threshold are set at a market rate. The cap will apply to time deposits of up to $5 million in 2011, $3 million in 2012 and $1 million in 2013. The cap will be eliminated in 2014, and Treasurer Zweifel will then receive market interest rates on all time deposits for taxpayers.

To facilitate greater use of time deposits and transparency in his investment process, Treasurer Zweifel launched an online system for financial institutions to apply for time deposits. The system allows Treasurer Zweifel to post available funds every two weeks so that financial institutions may request them. The website is www.treasurer.mo.gov/TimeDeposits.

A media kit with head shot and biography is available at: www.treasurer.mo.gov/MediaToolKit.asp.