February 11, 1991
TO: MONEY MARKET MEMBERS - ONE PER COMPLEX NO. 3-91
RE: RHODE ISLAND CREDIT UNION BAIL OUT TO BE FINANCED OUT OF
GENERAL SALES TAX
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Last Friday, February 11, the Governor of Rhode Island
signed into law a measure to pay off depositors of state credit
unions not covered by federal insurance. The payments will be
financed by a bond issue, which will be paid off by cancelling a
scheduled decrease in the state’s sales tax. The law does not
contain any tax on money market funds, which had been mentioned
in earlier reports as a possible financing mechanism. (See
Memorandum to Money Market Members No. 2-91, dated February 1,
1991.)
Craig S. Tyle
Associate General Counsel