Failed Thrifts: Resolution Trust Corporation and 1988 Bank Board Resolution Actions

• NCJ Number: 125738
• Author(s): R L Fogel
• Date Published: 1990
• Length: 14 pages
• Corporate Author: US Government Accountability Office
• Sale Source: Azimuth Inc.; National Institute of Justice/; NCJRS Photocopy Services
• Publication Type: Legislative Hearing/Committee Report
• Language: English
• Country: United States of America

Annotation

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 created the Resolution Trust Corporation (RTC) to resolve insolvent thrifts.

Abstract

In general RTC's approach to its tasks represents a significant improvement over the Federal Home Loan Bank Board's approach prior to and during 1988. RTC's policies, if properly implemented, should avoid the risk, exposure, cost, and uncertainties that existed and continue to exist for the Bank Board's 1988 resolutions. However, there are concerns about RTC's resolution process. Startup problems have impeded RTC's ability to rapidly resolve its caseload. RTC needs to continue adhering to its policies for an open and competitive bidding process even though it might impede the pace of resolutions. RTC's extended conservatorship program can allow it to control insolvent thrifts, assess their condition, begin liquidation actions, and determine the resolution method and priority. There are clearly benefits to this program, but more attention is needed to reducing management turnover, training RTC managing agents, and developing guidance on running the thrifts. 2 notes.