Resolution Trust Corporation: Funding, Organization, and Performance

Pursuant to a congressional request, GAO discussed the Resolution Trust Corporation (RTC) and its thrift resolution efforts, focusing on: (1) funding requirements for RTC and the Savings Association Insurance Fund (SAIF); (2) the need to move resolution responsibilities from RTC to the Federal Deposit Insurance Corporation (FDIC); and (3) RTC operational performance. GAO noted that: (1) although RTC has closed 654 institutions with a total of $196 billion in deposit liabilities, funding disruptions have hampered RTC resolution efforts and have increased the overall cost of thrift cleanup; (2) Congress needs to authorize funds for RTC to complete its resolution activities and finalize plans for the transfer of disposition and resolution responsibilities to FDIC; (3) RTC has given priority to reducing its inventory of assets rather than maximizing asset recoveries; (4) RTC cannot effectively manage its disposition program because it lacks adequate information systems and information on holding costs; (5) the lack of sufficient internal controls over RTC contracting procedures has resulted in lost revenues and increased costs; and (6) although RTC has increased its procurement procedure guidance, contracting problems remain due to RTC inability to ensure that its staff implemented the policies properly, poor planning, and continuing contract administration oversight problems.