Thrift Crisis: Strategic Plan for Resolution Trust Corporation and Management of FSLIC Deals

GAO discussed its review of the: (1) Resolution Trust Corporation (RTC) Oversight Board's strategic plan for resolution of thrifts with appointed conservators or receivers; and (2) cost and management of the Federal Savings and Loan Insurance Corporation's (FSLIC) thrift resolutions that occurred between 1988 and the establishment of RTC. GAO noted that, although the strategic plan presented the Board's policies in a reasonably comprehensive and understandable manner, the plan lacked adequate information regarding: (1) the proposed method for acquiring working capital; (2) the applicability of legislative provisions to thrifts still in conservatorship; (3) harmonization of the sale of assets held by federal agencies; (4) RTC organization and management processes, including its method of monitoring cost exposure, expenditures, and conflict-of-interest abuses; and (5) policies for implementing the RTC menu approach to sales of institutions. GAO also noted that the Federal Deposit Insurance Corporation, which was responsible for managing the FSLIC-resolved thrift assistance agreements, did not: (1) complete the initial inventory audits of acquired thrifts; (2) provide guidance on appropriate asset management and disposition strategies; and (3) develop a covered asset tracking system.