FSLIC 1988 and 1989 Assistance Agreement Costs Subject to Continuing Uncertainties
AFMD-92-78: Published: Aug 3, 1992. Publicly Released: Aug 3, 1992.
GAO provided information on the costs of the Federal Savings and Loan Insurance Corporation's (FSLIC) 1988 and 1989 assistance agreements.
GAO found that: (1) FSLIC 1988 and 1989 assistance agreements payments totalled $56.1 billion; (2) 1990 total estimated payments decreased by $9.3 billion, largely resulting from future interest cost savings and a $15.7-billion Resolution Trust Corporation (RTC) prepayment; (3) RTC could realize $1.2 billion in overall cost savings, but borrowing to fund cost saving actions shifts borrowing from the FSLIC Resolution Fund to the Treasury; (4) the Federal Deposit Insurance Corporation's (FDIC) payments could total $18.3 billion on 87 remaining assistance agreements, depending on instabilities in local real estate markets, interest rate fluctuations, and future RTC use of appropriated funds; (5) the reliability of the agreements' estimated capital loss payments and undetected deficient claim payments shows weaknesses in FDIC and RTC procedures and documentation; and (6) the agencies have not implemented GAO recommendations for strengthening their policies and procedures.