Resolution Trust Corporation: Funding, Asset Disposition, and Structure Issues

GAO discussed: (1) the Resolution Trust Corporation's (RTC) current and future funding needs; (2) its progress in disposing of assets; and (3) issues related to restructuring RTC. GAO noted that: (1) on September 12, 1991, RTC and its Oversight Board requested an additional $80 billion in loss funds, a $160-billion increase in the RTC working capital borrowing authority, to complete the cleanup of 900 insolvent thrifts and allow the Savings Association Insurance Fund to assume its responsibilites without a backlog of unresolved troubled thrifts; (2) RTC also stated that it used $59 billion in working capital and expects to need another $58 billion to carry it through fiscal year (FY) 1992, and if RTC adheres to its plan it will exceed its current borrowing authority by $17 billion in FY 1992; (3) RTC financial statements for the year ending December 31, 1990 are not yet complete and are subject to significant reduction; (4) by June 1991, RTC had taken a total of about $328 billion in assets under its control and liquidated 51 percent; (5) by June 30, 1991 about $124 billion or 78 percent of RTC total assets, remained in the RTC inventory; and (6) continued leadership and management attention will be needed to sustain and enhance RTC progress in developing a sound information resources management program. GAO believes that RTC needs a: (1) strong chief executive officer to be responsible for the day-to-day operations; and (2) strong oversight by an entity independent of the day-to-day operations.