Resolution Trust Corporation: Performance Assessment to Date

GAO discussed the Resolution Trust Corporation's (RTC) operations since August 1989. GAO noted that: (1) as of December 31, 1990, RTC used about $101 billion of the $106 billion it received from Congress to begin cleaning up the savings and loan crisis, using $37 billion to fund losses and the remaining for working capital; (2) Congress was considering alternative methods of funding RTC to avoid a slowdown in resolution activity caused by funding shortfalls; (3) as of December 31, 1990, RTC had assumed control over 531 thrifts, 352 of which it resolved and the remaining in conservatorship; (4) the average length of time that thrifts remained in conservatorship increased from 25 weeks in August 1989 to over 52 weeks at the end of 1990; (5) RTC did not provide regions with the thrift supervision guidance needed to ensure compliance with regulations; (6) RTC saved the government $1.7 billion by using methods other than insuring deposit payouts to complete some resolutions; (7) RTC devised methods for selecting resolution methods and acquirers and comparing bids on various transactions packages; (8) RTC contracted firms to more efficiently handle assets it acquired through closed thrifts; (9) RTC implemented its standard asset management and disposition agreement for selling real estate assets in August 1990, but had limited success in selling such assets; (10) RTC sold or collected on loans and other assets at a reduced value; and (11) RTC lacked an adequate information system and effective contractor oversight.