1. Treasury Tax & Loan Investment Program Term Investment Option (TIO) Program Overview Updated September 2009

2. 2 TT&L Investment Program Introduction TT&L Organizational Stakeholders Department of the Treasury / Fiscal Service  Office of the Fiscal Assistant Secretary ( OFAS )  Financial Management Service ( FMS )  Bureau of the Public Debt ( BPD ) Federal Reserve System  Federal Reserve Bank of St. Louis  Federal Reserve Bank of New York TT&L Depositary Institutions

3. 3 TT&L Investment Program Overview  Treasury has funds based on: Cyclical factors (strong vs. weak economy) Seasonal factors (peak tax periods) Monthly cash flow (middle through end of month) Legislative Factors (debt ceiling)  Investment Options Direct Investment Dynamic Investment Special Direct Investment Term Investment Option (TIO) Reverse Repurchase Agreement (REPO)

4. 4 Term Investment Option (TIO) Overview  Treasury Objectives Provide tax payers with a greater rate of return on funds invested Increase investment capacity in the TT&L program  Participant Benefits Greater certainty of funding Enhanced flexibility  Pilot Program - April 2002  Permanent Program Inception - October 2003

5. 5 Term Investment Option (TIO) Overview  TIO Participants Participants must be TT&L depositaries in sound financial condition Money center banks, regional banks, & credit unions Currently 65 participants (September 2009)

6. 6 Term Investment Option (TIO) Overview  General Overview Excess funds offered for a fixed term Funds awarded through a competitive bidding auction process Bids submitted and accepted via telephone

7. 7 Term Investment Option (TIO) Process  Update Notification General intent notice sent to participants (via e-mail) one day prior to official announcement  Announcement Day Offering amount, length of term, acceptable collateral  Auction Day Participants place bids by calling 1-877-830-3496 prior to cutoff time (usually 11:00am ET) Results announced within 30 minutes

8. 8 Term Investment Option (TIO) Process  Investment Day Collateral pledged by designated time (12:00pm ET) Funds are settled into awarded participant’s TIO and Reserve account (by 2:00pm ET)  Maturity Day Principal and interest are collected from participants Collateral is available after funds are collected

9. 9 Term Investment Option Sources of Information  Historical Results For announcement information, auction results and an historical summary of TIO activity, visit the Treasury’s FMS Website.  E-mail notification sign-up available. http://fms.treas.gov/tip/reports.html