Failed Bank:

FDIC Sale of CrossLand Conservatorship Satisfied Least-Cost Test

GGD-94-109: Published: Apr 20, 1994. Publicly Released: Apr 20, 1994.

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Pursuant to a congressional request, GAO reviewed the Federal Deposit Insurance Corporation's (FDIC) resolution actions regarding the failed CrossLand Federal Savings Bank of Brooklyn, New York, focusing on whether FDIC: (1) complied with the least-cost calculation and documentation requirements; and (2) projected cost savings were realized when FDIC took interim ownership of CrossLand until a final resolution alternative could be determined.

GAO found that: (1) the FDIC decision to sell the conservatorship to institutional investors through a public offering complied with the least-cost calculation and documentation requirements of the Federal Deposit Insurance Corporation Act; (2) FDIC projects the resolution will cost the Bank Insurance Fund (BIF) $899 million; (3) FDIC determined that the public offering sale would be the least costly to BIF; (4) conservatorship costs less than other resolution alternatives; and (5) although there have been no significant problems with bank management during conservatorship operations, FDIC has been unable to achieve its projected savings and restore the bank to profitability.

Jul 6, 2020

Apr 30, 2020

  • finance icon, source: Comstock

    Priority Open Recommendations:

    Department of the Treasury
    GAO-20-549PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

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