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R E S O L U T I O N TRUST C O R P O R A T I O N
R e s o lv in g T h e C ris is
R e s to rin g T h e C o n fid e n c e







R E S O L U T I O N TRUST C O R P O R A T I O N

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T he
'A. R esolving The Crisis
Restoring The Confidence

T «rn IS
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August 31, 1995

Resolution Trust Corporation
Washington, D.C.
Sirs:
In accordance with the provisions of section 501 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, the
Resolution Trust Corporation is pleased to submit its Annual Report for 1994.
Financial operating plans and forecasts have been provided separately.
Very truly yours,

Deputy and Acting Chief Executive Officer

The President of the U.S. Senate
The Speaker of the U.S. House of Representatives

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i : i i i e i e x e c u t i v i e i F F i m r ss t a t e m e n t

I he year 1994 was a pivotal one for the Resolution
Trust Corporation (RTC). All but one of the 63
conservatorships on hand at the end of 1993 were
resolved during the year; the one remaining con­
servatorship was resolved in early 1995. The asset
inventory of $63 billion was reduced to $25 bil­
lion and the planned downsizing of staff commen­
surate with workload demands was begun. A
statutory interagency task force was formed and

 0 S l l T l l l i r
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key decisions regarding personnel were made.
This important work set the stage for the final year
of the RTC.
The RTC closes its doors and ceases to exist
on December 31, 1995, nearly six and one-half
years after its creation in August 1989. The unfin­
ished business of the RTC will be handed over to
the Federal Deposit Insurance Corporation (FDIC),
ending an unfortunate chapter in U.S. financial
history, namely the savings and loan crisis.
When the final tally is in, the RTC will have
resolved nearly 750 failed savings and loans,
liquidated nearly half a trillion dollars in assets,
and honored the federal insurance obligation to
more than 25 million account holders in failed
savings and loan associations. For the RTC to have
accomplished such an enormous and complex
task in its short life is unprecedented for a govern­

|0jin ^ ^
Deputy and Acting Chief
Executive Officer

ment agency, and I believe that an objective
analysis will show it to be a real success story.
The RTC's accomplishments could not have
been made without the dedication and hard work
of its staff. Formed in 1989, with a nucleus of
FDIC personnel, the RTC owes much of its suc­
cess to the contributions of former Executive
Director David Cooke, former Senior Vice
President Lamar Kelly, former Senior Vice
President Bill Roelle, and the thousands of RTC
employees and contractors who worked tirelessly
to achieve these results. Those of us who remain
at the RTC — including 3,303 temporary employ­
ees, most of whom will lose their jobs as the RTC
sunsets — must continue the task of reaching the
RTC's operating goals for 1995 to ensure an order­
ly shutdown and transition to the FDIC.

June 30, 1995

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T A B L E (IF C O N T E N T S

Transm ittal L e tte r............................................................................................................................................................................1
C h ie f E xe cu tive O ffic e r's Statem ent................................................................................................................................. 2
In tro d u ctio n ........................................................................................................................................................................................ 4
O ffic e o f Planning, R esearch, and S ta tistics............................................................................................................... 8
O ffic e o f G o vern m en tal R e la tio n s .................................................................................................................................... 8
O ffic e o f C o rp o rate C o m m u n ic a tio n s........................................................................................................................... 9
D ivisio n o f Legal Services ....................................................................................................................................................11
Department of Business Activities........................................................................................................................................ 12
Department of Corporate Operations ................................................................................................................................. 14
Department of Litigation.........................................................................................................................................................16
Office of Ethics ......................................................................................................................................................................... 18
D ivisio n o f A d m in istra tio n ....................................................................................................................................................19
Office of Administrative Services...........................................................................................................................................20
Office of Human Resources Management...........................................................................................................................20
Office of Organization and Resource Management ........................................................................................................20
Office of the Secretary..............................................................................................................................................................21
D ivisio n o f C o n tracts, O versig h t, and E valu atio n ................................................................................................ 23
Office of Contracts .................................................................................................................................................................. 24
Office of Major Dispute Resolution...................................................................................................................................... 24
Office of Contractor Oversight and Surveillance............................................................................................................... 25
Administrative Evaluation Staff............................................................................................................................................. 25
D iv isio n o f Asset M anagem ent and S a le s...................................................................................................................27
Department of Operations and Asset Management.......................................................................................................... 28
Department of Securitization Management.........................................................................................................................36
Department of Securities Transactions ............................................................................................................................... 36
Department of Asset Marketing..............................................................................................................................................37
Department of Affordable Housing...................................................................................................................................... 38
D ivisio n o f Resolutions ...........................................................................................................................................................41
Office of Major Resolutions.....................................................................................................................................................42
Office of Field Resolutions .....................................................................................................................................................42
D ivisio n o f M in o rity and W om en's Program s..........................................................................................................47
Department of Minority- and Women-Owned Business................................................................................................. 48
Department of Legal Programs ..............................................................................................................................................49
Department of EEO and Affirmative Action.........................................................................................................................49
Department of Policy, Evaluation, and Field Management.............................................................................................50
D iv isio n o f the C h ie f F in an cia l O ffic e r......................................................................................................................... 51
Office of Budget and Planning ..............................................................................................................................................52
Office of Accounting Services................................................................................................................................................ 52
Office of Field Accounting and Asset Operations.............................................................................................................. 53
Office of Management Control ..............................................................................................................................................54
Office of Contract Appeals ..................................................................................................................................................... 54
D epartm ent o f In fo rm atio n Resources M an a g e m e n t........................................................................................55
Office of Systems Development ............................................................................................................................................56
Office of Corporate Information ............................................................................................................................................57
Regulations .......................................................................................................................................................................................59
F in an cia l Statem ents and In tern al C o n tr o ls ............................................................................................................. 63
S ta tistics.............................................................................................................................................................................................103
In d e x ................................................................................................................................................................................................... 108

I9 9 ♦ 1
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INTRODUCTION

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he Resolution Trust Corporation (RTC) will soon
complete its mission, one year ahead of the clo­
sure date originally mandated by Congress.
Established on August 9, 1989, with Congres­
sional passage of the Financial Institutions
Reform, Recovery, and Enforcement Act (FIRREA),
the RTC's job is to resolve one of the worst finan­

cial disasters in this nation's history—the failure of
hundreds of savings and loans across the country.
The RTC will shut its doors on December 31,
1995, when remaining RTC business and person­

nel will transfer to the Federal Deposit Insurance
Corporation (FDIC).
The RTC fulfills the government's promise to
protect insured deposits at failed institutions that
had been insured by the Federal Savings and Loan
Insurance Corporation (FSLIC) and for which a
conservator or receiver was appointed from
January 1, 1989, through June 30, 1995. The RTC
manages and sells these failed institutions and
recovers funds by managing and disposing of the
thrifts' assets.
At yearend 1994, the RTC had sold or closed
scores of failed thrifts placed in its hands by the
Office of Thrift Supervision; only one institution
remained in the RTC's conservatorship program.
From its inception through 1994, the RTC
resolved 744 failed thrifts, including 262 institu­

availability and affordability of residential real prop­
erty for low- and moderate-income individuals.
Another RTC mandate is to ensure that as
many savings and loan violators as possible are
brought to justice, and to recover money from S&L
wrongdoers on behalf of taxpayers. The RTC inves­
tigates, initiates civil litigation, and makes criminal
referrals in cases involving former officers, direc­
tors, and other professionals who played a role in
the thrifts' demise.
On December 21, 1991, the Resolution Trust
Corporation Refinancing, Restructuring, and
Improvement Act became law. This act provided
the RTC with $25 billion in funding through April
1, 1992; extended the RTC's ability to accept
appointment as conservator or receiver from
August 9, 1992, set forth in FIRREA, to September

30, 1993; redesignated the RTC Oversight Board as
the Thrift Depositor Protection Oversight Board and
restructured its membership; abolished the RTC
Board of Directors and removed the FDIC as exclu­
sive manager of the RTC; and created the Office of
the Chief Executive Officer of the RTC, requiring
appointment to that office by the President with the
advice and consent of the Senate.
The RTC was without funds to resolve failed
savings and loans from April 1, 1992, through
December 17 , 1993. With the December 17 , 1993,

tions turned over on August 9, 1989, its first day
of business. In 1994, the RTC sold or closed 64
failed thrifts.

enactment of the RTC Completion Act, the April 1,
1992, limitation on funds previously established
under the RTC Refinancing, Restructuring, and

The RTC's sizable—and eclectic— inventory
of assets, once belonging to the hundreds of thrifts
that failed, diminished dramatically by yearend
1994 through innovative sales methods devised

Improvement Act of 1991 was lifted. The RTC was
authorized to use up to $18.3 billion—funds remain­
ing from the $25 billion authorized under the 1991

by the RTC. Asset sales and collections totaled
$384.5 billion (net of putbacks) through 1994.
The RTC achieved $27 billion (net of putbacks) in
asset sales and collections during 1994 alone. At
December 31, 1994, assets under RTC manage­
ment totaled $25 billion.
FIRREA requires the RTC to maximize the net
present value return from the disposition of failed

act—to resolve failed savings and loan institutions.
The RTC Completion Act included among its
provisions extending the deadline for the RTC's
appointment as conservator or receiver of sav­
ings associations from September 30, 1993, to a
date between January 1 and July 1, 1995, to be
determined by the Chairperson of the Thrift
Depositor Protection Oversight Board. Secretary

thrifts and their assets, minimize the impact of such

of the Treasury Lloyd Bentsen, the board's chair­
person, determined on December 5, 1994, that

transactions on local real estate and financial mar­
kets, minimize the amount of any loss in the resolu­

the appointment deadline would extend through
June 30, 1995.

tion of the insolvent thrifts, and maximize the

The Completion Act also established a new

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IMTROUUCTIUM

Resolution I rust Corporation Organizational Structure

C h ief Ex ec u t iv e O ffic er

O f f ICE o f
P la n n in g ,
R esea rch , a n d
S ta t istic s

O ffice o f
G o v ern m en ta l
R ela tio n s

■
■
■

D epu ty C h ief
E x ec u t iv e O ffic er

|
■
O ffice o f
C o r po ra te

1
1

C o m m u n ic a t io n s

D iv is io n
of

L e g a l Ser v ic es

■
D iv is io n
I
of
I A d m in ist ra t io n

D iv is io n o f
C o n tra c ts ,
O v e r s ig h t ,
and

Ev a lu a t io n

D epa rtm en t
o f B usin ess
A c t iv it ie s

O ffic e

A d m in is t r a t iv e
Ser v ic es

O ffic e o f
C o n tra c ts

M an a g em en t
a n d Sa les

D epa rtm en t o f
O p er a tio n s
a n d A sset
m a n a g em en t

D iv is io n o f
Res o lu t io n s

O ffic e o f
M a io r
R es o lu t io n s

D iv is io n o f
M in o r it y a n d
W o m en ' s
Pr o g r a m s

O ffic e o f
B u d g et an d
Pla n n in g

D epa rtm en t
o f Leg a l
Pr o g ra m s

O ffic e o f
A c c o u n t in g
Serv ic es

O ffic e o f
M a io r
D ispu t e
Re s o lu t io n

D epa rtm en t o f
Sec u r itiz a tio n
M a n a g em en t

O ffic e o f
O r g a n iz a t io n

O ffic e o f
C o n tra cto r
O v e r s ig h t a n d
S u r v eilla n c e

D epa rtm en t o f
Se c u r it ies
T r a n sa c t io n s

Department
o f EEO &
A ffirm a tive
A c tio n

A dm in istrative
E v a l u a t io n
Sta ff

D epa rtm en t
o f A sset
M a r k e t in g

D epa rtm en t
o f P o l ic y ,
Ev a l u a t io n ,
a n d Fir d
M a n a g em en t

a n d reso u r c e

M a n a g em en t

O f f ic e o f
Et h ic s




O ffic e o f
t h e Se c r et a r y

D epa rtm en t
of

A ff o r d a b le
H o u s in g

O ffic e o f
F ield
R e s o lu t io n s

D iv is io n o f
t h e C h ief
F in a n c ia l
O ffic er

D epa rtm en t o f
M in o r it y - a n d
W o m en O w n ed
B usiness

O ff ic e o f
H um a n
Reso u r c es
M a n a g em en t

D epa rtm en t
C o rpo ra te
O per a tio n s

of

D epa rtm en t
o f L it ig a t io n

of

D iv is io n
A sset

of

O ffic e o f
F ield
A c c o u n t in g
a n d A sset
O per a tio n s

O ffic e o f
M a n a g em en t
C o n tro l

O ffic e o f
C o n tra ct
A ppeals

D epa rtm en t o f
I n fo r m a t io n
R eso urces
M a n a g em en t

O ffic e o f
System s
D ev elo pm en t

O ffic e o f
C o r p o ra te
I n fo rm a t io n

i \i m i ii u i: t 1) \
1

11II
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termination date for the RTC— no later than
December 31,1995, at least one year earlier than
previously established; expanded the RTC's minor­
ity and women's programs and affordable housing
responsibilities; implemented numerous manage­
ment reforms; and reduced the maximum autho­
rization of funds for SAIF (Savings Association
Insurance Fund), controlled by the FDIC, to $8 bil­
lion through fiscal year 1998, or until its reserve
ratio equals 1.25 percent, whichever occurs first.
Deputy Treasury Secretary Roger C. Altman
served as interim Chief Executive Officer of the
RTC until March 31,1994. Following Mr. Altman's
departure, Deputy CEO John E. Ryan, who joined
the RTC on January 4 ,199 4, became Deputy and
Acting CEO. The RTC Executive Committee,
which serves as the policy-setting entity and
addresses major operational matters—consisted of
Deputy and Acting CEO Ryan (who served as
chairman and a non-voting member); Ellen B.
Kulka, General Counsel; Donna H. Cunninghame,

Thomas P. Horton, Vice President, Division of
Asset Management and Sales; J. Paul Ramey, Vice
President, Division of Resolutions; and Johnnie B.
Booker, Vice President, Division of Minority and
Women's Programs.
The Thrift Depositor Protection Oversight
Board reviews the RTC's overall strategies, poli­
cies, and goals, including those deemed likely to
impact significantly on the RTC's financial condi­
tion, its operations or its cash flows; or those it
deems to involve substantial public policy issues.
The Board's members include the Secretary of the
Treasury, who chairs the Board; the Chairperson of
the FDIC Board of Directors; the RTC CEO; the
Director of the Office of Thrift Supervision; the
Chairperson of the Board of Governors of the
Federal Reserve System; and two independent
members appointed by the President, with the
advice and consent of the Senate.
In 1994, the RTC carried out its mission from

Chief Financial Officer; Barry S. Kolatch, Vice
President, Office of Planning, Research and
Statistics; Jo-Ann Henry, Vice President, Division
of Administration; John W. Lynn, Vice President,

offices throughout the country— its headquarters in
Washington, D .C.; field offices and sales centers in
Atlanta, Georgia; Newport Beach, California;
Dallas, Texas; Denver, Colorado; Kansas City,
Missouri; and Valley Forge, Pennsylvania; and the

Division of Contracts, Oversight, and Evaluation;

National Sales Center in Washington, D.C.

K IS I 11 I I I I

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PLANNING, RESEARCH, anii STATISTICS

GOVERNMENTAL RELATIONS

CORPORATE COMMUNICATIONS




R E S E A R C H , GOVERNMENTAL RELATI ONS

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he Offices of Planning,
Research, and Statistics;
Governmental Relations; and
Corporate Communications
report directly to the Deputy
Chief Executive Officer.

Office of Planning,
Research, and
Statistics
The Office of Planning,
Research, and Statistics provides
research, planning, and analyti­
cal services to support
operations throughout the
Corporation, and serves as the
Corporation's liaison with the
Thrift Depositor Protection
Oversight Board. Its principal
unit is the Office of Research
and Statistics.
During 1994, the office
also provided support to the
FDIC/RTC Transition Task

for RTC management,
Congress, outside agencies, and
the public. Much of the infor­
mation is provided in the RTC
Review\ a monthly publication
produced by the section. Ad
hoc information, analyses,
charts, and tables are also pre­
pared by the section. This
includes analytical support in
preparing the RTC Sales Goals,
Business Plan, and various
financial projections made by
the RTC. In its role as adminis­
trator of the Corporate
Information System, the section
facilitates communication
between users and system
developers, and oversees the
system's standard operations.
The Financial Markets and
Institutions Section provides
policy- and economics-oriented
support to the RTC. The section
publishes the bi-monthly
Regional Economic Review,

cal assistance to field office
personnel on field resolutions.
During 1994, the section con­
ducted the cost test on 19
major resolutions and 1 ARP
resolution. The section also
performs resolution cost analy­
ses for financial statement pur­
poses. It maintains a database
on all resolutions and provides
reports on the resolution
process to RTC senior manage­
ment, the Thrift Depositor
Protection Oversight Board,
Congress, and the General
Accounting Office. With the
assistance of the Financial
Markets and Institutions Section,
the Cost Analysis Section also
conducts the quarterly ECR
process for the valuation of
receivership assets.

Inspector General, and the
FDIC Divisions of Resolutions
and Supervision.

which includes valuable indica­

Office of
Governmental
Relations

tors of real estate market condi­
tions, and participates in the

The Office of Governmental
Relations serves as the

Office of Research and
Statistics

estimated cash recovery process
(ECR) for the valuation of
receivership assets. During 1994,

Congressional liaison unit of the
RTC. It is responsible for main­
taining communications with

The Office of Research and
Statistics provides economic,
financial, and statistical data and

the section wrote numerous con­

the House and Senate, ensuring

gressional testimonies, updated
the RTC Business Plan, devel­

analyses to other offices and
divisions within the RTC as well
as to Congress and the public.

oped briefing materials for senior
management, and participated in
compiling the RTC's history.

that members and their staffs
are kept aware of RTC policy
concerns, and that the RTC is

Three sections comprise the
Office of Research and Statistics:

Force, the RTC Office of

cognizant of issues of impor­
tance to the legislative branch.
The office also responds to
member inquiries on behalf
of constituents.

Financial Modeling and

The Cost Analysis Section
supplies analytical support and
information management in

Statistics, Financial Markets and
Institutions, and Cost Analysis.
The Financial Modeling

the RTC's resolutions and ECR
processes. The section con­
ducts the RTC's "cost test" for

and numerous legislative mark­

and Statistics Section regularly
produces reports covering virtu­

major and Accelerated
Resolutions Program (ARP) res­

ups affecting RTC operations.
The office continued to track

ally all facets of RTC operations

olutions, and provides techni­

legislation of importance to the

( * ! E* I ■EI I I I

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0 I S

During the year, the office
participated in five hearings

Rn 111 i i 11 T1111 ( o it t »it 111 o i

i: i] ii n i

RTC. From inception to yearend 1994, the office took part
in approximately 1,000 meet­
ings with members of Congress
or their staffs, and responded to
over 46,000 telephone and
written inquiries from
Congressional offices. In addi­
tion, the office has responded
to numerous requests from
Congress for documents and
reports pertaining to

ii a t e c o m m u n i c a t i o n s

ter for employees. It also distrib­
utes a series of news updates,
including a daily clipsheet of
print coverage and a weekly
wrap-up of print coverage.

Congressional oversight of the
operations of the RTC.

Office of Corporate
Communications
The Office of Corporate
Communications provides the
press and the public with infor­
mation about the RTC's opera­
tions and activities. The staff
responds daily to inquiries from
reporters and others throughout
the United States and overseas,
providing detailed information
about RTC actions.
The staff issues national
and field press releases and
provides copy to various publi­
cations throughout the year.
The RTC's CEO and other
senior officials receive a full
range of media and public
affairs support from the office,
including briefings prior to
interviews, and speeches and
talking points in advance of
speaking engagements. In addi­
tion, the office writes and edits
opinion editorials and letters to
the editor for key personnel.
The office produces publi­
cations such as the RTC's
Annual Report and Resolution
Trust News, a monthly newslet­

Digitized forMFRASER 1 1 1 1 1 e R m i t
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LEGAL SERVICES

I MI U

S EI I V I C E S

f

he Division of Legal Services
provides comprehensive legal
services to the RTC. The division
advises the Washington and field
staffs on such issues as resolu­
tions, conservatorship and
receivership operations, asset
disposition, contracting, litiga­
tion, claims against directors and
officers of failed institutions, and
special issues, including the
RTC's statutory authority and
responsibilities, legislation, and

environmental matters.
In April 1994, the General
Counsel, who heads the division,
reorganized its management
structure to deal more effectively
with the work facing the division.
The Division of Legal Services

The department is com­
prised of the Offices of Real
Estate, Securities and Finance,
Recei versh ips/Conservatorsh ips,
Contracts, and Field Office
Operations.

Office of Real Estate
In 1994, the Office of Real
Estate assisted the Corporation
in closing billions of dollars in
sales of real estate and loans
through sealed-bid offerings,
portfolio sales, and open-cry
auctions. The office also provid­
ed legal support for the settle­
ment activities of the Settlement
Workout Asset Team (SWAT)
Program, and legal advice to
the Corporation on environ­

the sealed bid sale of environ­
mentally impaired and special
resource assets, and loans
secured by such assets; and in
the Judgments, Deficiencies,
and Chargeoffs (JDC) initiative,
a partnership arrangement that
sold approximately $7 billion
(book value) of judgments, defi­
ciencies, and chargeoffs
between December 1,1993,
and December 31,1994.
The Environmental Section
reviewed environmental condi­
tions relating to sales initiatives,
advised the Corporation on the
disposition of environmentally
impaired or environmentally
sensitive properties, and
addressed environmentally
related claims.

mental law and other real
estate-related issues.
The office provided legal
support on several major real

Office of Securities
and Finance

estate transactions, including
Land Fund II, in which nearly
$370 million (book value) in

The Office of Securities and
Finance provides legal support
for financial asset sales, includ­
ing loan securitizations, whole

Activities reviews the legal

land and loans secured by land
were sold through a limited
partnership arrangement; and

aspects of RTC asset sales,
including the disposition of real

Landmark II, which offered golf
courses and other development

estate, high-yield and other
securities, and performing and
non-performing loans through
securitized transactions. The

properties from the Landmark
subsidiaries of Oak Tree
Federal Savings Bank, New

and reviews transaction docu­
ments, supervises outside
counsel for sales conducted

consists of the Departments of
Business Activities, Corporate
Operations, and Litigation; and
the Office of Ethics.

Department of
Business Activities
The Department of Business

department also provides legal
advice on conservatorship
operations and the resolution of
failed savings associations,
including pension and employ­

Orleans, Louisiana, in accor­
dance with an approved bank­
ruptcy plan of reorganization.
The office also coordinated
legal services for the RTC's
three national loan auctions in

loan sales, and sales of portfo­
lio securities. The office drafts

through headquarters in
Washington, D .C ., and pro­
vides advice to field attorneys
on transactions conducted
through the field offices. The
office also advises on the dis­
position of qualified financial
contracts and the removal of

ee benefits issues, and matters

1994, at which over $1 billion

contingent liabilities related to

related to RTC contracting
activities. In addition, the

(book value) in loans were
sold, and the National Loan
Auction Program.

bond financings.
In 1994, the Office of

department provides general
oversight for and liaison with
attorneys in the field offices.

IE
( 11 S E I I I ( I S


The office assisted in the
preparation of Environmental II,

Securities and Finance assisted
with 12 mortgage-backed secu­
rities transactions resulting in

I E I • I I I I I I T KI J T ( I I M R I T I I I

the sale of approximately $4.2
billion (book value) of single­
family, multifamily, and com­
mercial loans.
In addition, the office
assisted in disposing of a vari­
ety of high-yield and other
securities. In 1994, the RTC
sold over $1.8 billion (par
value) in securities, including
limited partnership interests,
highly leveraged transaction
loans, various types of equity
securities, and junk bonds.

Office of Receiverships/
Conservatorships
The Office of Receiverships/
Conservatorships provides legal
advice, documentation, and
other support to the Office of
Operations and the Division of
Resolutions on claims adminis­
tration, conservatorship opera­
tions, receivership terminations,
subsidiary sales, resolutions of
failed savings associations, pen­
sion and employee benefits,
and tax matters.
During 1994, the office
provided legal support and
documentation for 19 major
resolutions (final dispositions of
institutions with more than
$500 million in deposits at
conservatorship) and 45 field
resolutions (final dispositions of
institutions with $500 million
or less in deposits at conserva­

Act, the office drafted and pub­
lished a new RTC regulation
defining the term "Predomi­
nantly Minority Neighborhood"
as used in statutes authorizing
various minority preference pro­
grams. The office also drafted
a new directive implementing
that regulation.
The office assisted in the
termination of 81 receiver­
ships in 1994, and provided
legal review and support for
the approval of 127 termina­
tion cases during this period.
The office also helped to
obtain a judgment against
the Financial Institutions
Retirement Fund for the return
of $5 million in excess pen­
sion assets.
The office assisted the
Department of Litigation in
publishing an interim policy
statement and a proposed rule
in the Federal Register regard­

Office of Contracts (of the
Division of Contracts,
Oversight, and Evaluation),
Office of Major Dispute
Resolution, Office of SAMDA
Program Management, Office
of Ethics, Office of Contractor
Oversight and Surveillance,
and the Department of
Minority- and WomenOwned Business.
During 1994, the office
handled over 1,600 contracting
operation actions including
contract reviews, modifications,
drafts, and legal opinions; 125
Office of Ethics actions consist­
ing of reviews of cases for sus­
pension, exclusion, or contract
eligibility determination; 550
Office of Contractor Oversight
and Surveillance contract audit
reviews; 28 SAMDA Program
Management audit reviews,
contract interpretations, and
legal opinions; and 33 Office of

ing the treatment of claims
based upon acts and omissions
of a receiver.

Major Dispute Resolution con­
tract actions, either settlements
of issues pending, collection of
outstanding claims, initiation/

Office of Contracts

defense of litigation, or pending
negotiations in progress.

The Office of Contracts provides
support in maintaining fair and
uniform policies and procedures
in the contracting for goods and
services, addresses issues arising
from the RTC's contractor ethics
program and Standard Asset
Management Disposition

Office of Field Office
Operations
The Office of Field Office
Operations, established in 1994
as part of the division's reorgani­
zation, is responsible for general
oversight of the division's six
field components (in Atlanta,

torship). These resolutions
involved institutions with total
deposits of $15 billion and

Agreement (SAMDA) manage­
ment, participates in the resolu­
tion of contract disputes, and

saved $1.1 billion over the cost
of paying off the institutions'

assists in deterring contractor
fraud and obtaining restitution
relating to it.

Forge), which provide the
majority of legal services used

The Office of Contracts'
client group includes the

by the RTC. Although most asset
disposition and other business

insured deposits.
In accordance with provi­
sions in the RTC Completion

 111 R E MI T
19 9 4 1 11


Dallas, Denver, Kansas City,
Newport Beach, and Valley

I E<I I SEI f I ( [ S

LEGAL S E R V I C E S

initiatives originate from head­
quarters, primary responsibili­
ty for their successful
implementation rests with

Issues, Outside Counsel
Management, Labor/Employ­
ment, and Administration.

field office staff.
In its liaison role, the Office
of Field Office Operations is
responsible for improving com­
munication and coordination
between the field offices and
headquarters. With the decision
in early 1994 to close the field
offices in Denver and Kansas
City before the RTC's sunset,
substantial office resources
were devoted to RTC/FDIC tran­
sition matters, which will be an
increasingly important function
throughout 1995.

Office of
Corporate Issues

Department of
Corporate
Operations
The Department of Corporate
Operations oversees all legal
matters pertaining to the RTC's
internal corporate structure,
governance, and procedure, as
well as legislative and policy
matters. It oversees policies
and procedures for the reten­
tion of outside counsel, includ­
ing contracting with outside
counsel; the RTC Legal
Information System (RLIS); and
the Accelerated Payment
Program/Unpaid Invoice
Confirmation project. The
department is responsible for
all legal matters involving the
RTC as a federal employer,
including personnel, laborrelations, and general employ­
ment matters.
The department consists
of the Offices of Corporate

Q J
1[
 ( 11 S ( I VI ( [ S


During 1994, the Office of
Corporate Issues provided legal
support and analysis on RTCrelated legislation and reviewed
congressional correspondence
prepared by the Division of
Legal Services.
The office also drafted and
coordinated the preparation of
regulations and directives
implementing the RTC
Completion Act, enacted on
December 17, 1993; provided
legal advice concerning
Freedom of Information Act
and disclosure issues; and pre­
pared numerous responses to
requests from Congress for
documents relating to pending
RTC investigations.
The office also assisted
in the administration and
oversight of the Settlement
Workout Asset Team Program
at headquarters and in the
field offices; and in matters
involving RTC internal corpo­
rate governance, law, and pro­
cedure, including drafting
CEO resolutions and delega­
tions of authority needed to
support the new Office of
the Deputy Chief Executive
Officer established in
January 1994.

Office of Outside
Counsel Management
The Office of Outside Counsel
Management oversees policies
and procedures for retaining
outside counsel, contracting
with outside counsel, and
resolving outside counsel con­
flicts of interest. The office
consists of the Legal
Contracting Unit, Legal
Services Unit, Outside
Counsel Conflicts Unit, and
RTC Legal Information System
Unit, and oversees the
Accelerated Payment
Program/Unpaid Invoice
Confirmation project.
During 1994, the Legal
Contracting Unit created
new procedures and revised
previous ones in order to imple­
ment the provisions of the RTC
Completion Act, as it applies to
outside counsel retention, and
to improve outside counsel
management activities. The unit
redrafted and issued the revised
Warranted Legal Officer
Program and its Guidelines,
Legal Contracting Procedures,
RTC Fee Cap Directive, and
RTC Byrd Amendment Policy.
The unit initiated an invoice
review program and served as
the liaison with the RTC inter­
nal controls review program.
The unit acts as the division's
liaison with the RTC Office of
Inspector General (OIG) on the
OIG's audits of outside counsel.
The Legal Services Unit

During the year, the office
provided legal advice on various
issues relating to the RTC/FDIC
transition, including an analysis
of which laws will apply to RTC
operations after sunset.

provides chair and staff support
to the Washington, D .C., Legal
Services Committee, which
ensures that all RTC policies
and procedures have been fol­

I f s • 111111

T11 $ i ( 11 r i

k

11111

LEGAL S E R V I C E S

lowed in selecting outside
counsel and approves the
selection of law firms. During
1994, the committee approved
181 legal referrals with budget­
ed fees and expenses of
approximately $43 million.
The Legal Services Unit, in
coordination with the RLIS
Unit, monitored the division's
nationwide outreach efforts to
minority- and women-owned
law firms (MWOLF). As a
direct result of the minority
outreach program, MWOLFs
received 30 percent ($51 mil­
lion) of all RTC legal fees paid
from January 1, 1994, through
December 31, 1994.
The Outside Counsel
Conflicts Unit continued to
provide support to the joint
RTC/FDIC Outside Counsel
Conflicts Committee, which
considered approximately 600
matters in 1994. The unit draft­
ed policies and procedures for
the division's outside counsel
background investigations pro­
gram, which became effective
on September 30, 1994, and
continued overseeing the pro­
gram's implementation. At
yearend 1994, background
investigations were either
completed or underway for
34 RTC law firms.
The Outside Counsel
Conflicts Unit also coordinated
the development and imple­
mentation of a computer-based
conflicts tracking system
(CTRACK), available to all divi­
sion personnel in each field
office and in Washington, D.C.
Unit personnel completed
CTRACK training for division

I FRASER
Digitized for M 4 I 1111 1 R f 1 11 I


users in five of the six field
offices; the remainder of the
training was scheduled for
January 1995. In early 1995,
the unit will issue revised RTC
conflicts procedures, reflecting
changes arising from the divi­
sion's reorganization and the
reallocation of certain respon­
sibilities from the field office
conflicts coordinators to the
Outside Counsel Conflicts Unit
in Washington, D.C.
The office's RLIS Unit
processed 74,000 invoices in
1994, representing $216 mil­
lion in payments to outside
counsel. The unit saved the
RTC over $9 million by review­
ing and adjusting outside coun­
sel invoices in accordance with
division policies. The RLIS
Management Users Group also
adopted a Data Quality Action
Plan, which reviews and veri­
fies RLIS information.
Through the Accelerated
Payment Program/Unpaid
Invoice Confirmation project,

matters involving the return
of RTC-assigned employees
to the FDIC, the ramifications
of the RTC's reorganization
and downsizing, and the
RTC's sunset.
Office of Labor/Employ­
ment attorneys act as representa­
tives of the Corporation in all
administrative litigation nation­
wide, and as the Corporation's
counsel with Assistant U.S.
Attorneys in related federal court
proceedings, including actions
based on whistleblower retalia­
tion. In 1994, the office repre­
sented the RTC in 124 cases,
including 25 Merit System
Protection Board cases, 79
Equal Employment Opportunity
Commission cases, and 20 Title
VII and whistleblower actions
brought in federal district court.
The office conducted legal
reviews of 264 garnishment
actions, including tax levies,
bankruptcy, child/spousal sup­
port, and commercial debts.

Office of Administration

the division verified $259 mil­
lion in invoices for outside
counsel, or 92 percent of the

The Office of Administration is
responsible for meeting the

program's goal from February
1992 through December 31,
1994. The division collected,

administrative needs of the
Division of Legal Services,
including hiring, preparation of

or verified as previously col­
lected, $4.4 million in over­

personnel actions, office space,
budget, and training. The office
also serves as the liaison

payments to outside counsel
during the same period.

Office of
Labor/Employment
Throughout 1994, the Office

between division employees
and the Office of Human
Resources Management.
The office prepares and
executes the budget for the

of Labor/Employment advised

Division of Legal Services

and assisted RTC management
on personnel, equal employ­

nationwide. As the liaison to the
Office of Budget and Planning,
the Office of Administration ana-

ment opportunity, and labor

1 ( ( 11 S e r v i c e s

LEGAL S E R V I C E S

lyzes expenditure variances in
accordance with quarterly report­
ing requirements.

Department
of Litigation
The Department of Litigation
oversees and coordinates all
litigation involving the RTC,
including trial and appellate
litigation in all federal and state
courts; claims against directors,
officers, accountants, and attor­
neys of failed financial institu­
tions; and claims and proceedings
in bankruptcy. The department
consists of the Offices of
General Litigation, Complex
Litigation, and Professional
Liability, which oversees the
Office of Investigations.

Office of General Litigation
The Office of General Litigation's
principal responsibility is over­
seeing most of the RTC's civil
litigation portfolio, in both the

1994, the office noted a marked
decrease in trial court suits aris­
ing from the actions of failed
thrifts and a substantial increase
in cases involving disputes with
RTC contractors, cases arising
out of RTC asset sales efforts,
and cases seeking relief from the
RTC in its corporate capacity.
The office was overseeing

and placed it in RTC conserva­
torship on August 31, 1990.
Under FIRREA, the OTS abro­
gated an earlier agreement
allowing Ensign to treat $171
million in supervisory goodwill
as capital. Upon receiving the
$30,792,145 payment and
release of the holding compa­
ny's goodwill claims against the

nearly 290 appellate matters at
yearend 1994. This portfolio
included cases pending in the
United States Supreme Court, in

OTS, the RTC released all
director and officer claims as
well as claims based upon the
institution's net worth mainte­

all 12 of the United States Circuit
Courts of Appeals, and in the
appellate courts of many of the
states. During 1994, the office

nance agreement.
The office pursued false and
fraudulent representations per­
taining to the RTC's Affordable
Housing Disposition Program,
and enforced land use restric­
tion agreements, and the statuto­

began to increase the amount of
work done in-house, particularly
at the appellate level. During the
year, approximately 24 appeals
case were successfully argued by
staff counsel.

Office of Complex
Litigation
The Office of Complex Litigation

ry and regulatory requirements
of the affordable housing pro­
gram. The office began develop­
ing procedures to pursue these
claims nationwide, in coopera­
tion with the U.S. Department
of Justice.
At yearend 1994, the office
was handling 1,337 active

trial and appellate courts. The
office also coordinates with
other federal agencies, such as

oversees all bankruptcy cases in
which the RTC as receiver or con­
servator had a vested interest, and

bankruptcy matters with

the FDIC and the Department of
Justice, on issues of mutual
interest, and advises senior RTC

all forms of alternative dispute res­
olution. The office also shares

approximately $6 billion of RTC

management on matters of liti­
gation policy.
In addition to managing the
RTC's trial court litigation mat­
ters, the office manages cases
dealing with legal issues

responsibility with the Office of
General Litigation for overseeing
trial and appellate litigation.

claims. The office reorganized
significant bankruptcy claims
associated with the plan of
reorganization for the Landmark
Land Companies, reducing 43

During 1994, the RTC
received a cash payment of
$30,792,145 from Ensign

claims valued at $152 million at
the beginning of the year to six

Financial Corporation and its

claims valued at $30 million at

impacting RTC policy or those
for which it is important that

former chairman, Ted Arison,
who had allegedly failed to

yearend.
During 1994, the office

the RTC take a consistent posi­
tion nationwide.
At any given time, the office

maintain the net worth of
Ensign Bank, F.S.B., New York,

handled approximately 40 alter­
native dispute resolution mat­

New York. The Office of Thrift

ters, including mediation. The

is involved in approximately 500
such "significant-issue cases." In

Supervision (OTS) declared
Ensign Bank, F.S.B. insolvent

office is continuing to cooper­
ate in developing and imple-

|Q
111
 n S e r v i c e s


kn

i i i ti m

T u n

( 11

pi

i i 11 o i

meriting alternative dispute res­
olution procedures to assist in
the resolution of claims against
the RTC.
The office is responsible
for the prosecution of claims
arising from junk bond invest­

executed professional liability
settlement agreements that will
result in recoveries of approxi­
mately $1,326 billion. Of this
total, approximately $1,188 bil­
lion in settlements and more
than $21.81 million in judg­

ments by financial institutions
placed under RTC or FDIC
supervision. At yearend, the
office had obtained cash recov­
eries totaling over $970 million
on behalf of RTC and FDIC
conservatorships and receiver­
ships that incurred losses

ments had been collected by
December 31, 1994. In addi­
tion, by yearend the RTC had

resulting from investments in
high-risk, high-yield securities.
The RTC's share of these recov­
eries totaled approximately
$911 million, which includes
approximately $409 million
from the Drexel Burnham
Lambert bankruptcy securities
litigation. At yearend 1994,
Drexel-related recoveries
totaled approximately $170
million in cash; the RTC's share
of these recoveries is approxi­
mately $159 million.

In June 1994, PLS held its
second RTC PLS Training
Conference for attorneys and
investigators from PLS offices
nationwide. This two-and-onehalf day program offered basic
and advanced PLS seminars
covering all areas of PLS inves­
tigations and claims.

Office of Investigations

recovered more than $910 mil­
lion from the Drexel/Michael
Milken settlements (Michael
Milken headed Drexel's highyield bond department), bring­
ing total yearend 1994
recoveries to approximately
$2,121 billion.
In 1994, the RTC fully

the thrifts' losses, identify pos­
sible claims, and determine
potential recovery sources.
When judged to be cost-effec-

implemented managerial
reforms required by the RTC
Completion Act by centralizing

tive, the RTC pursues profes­
sional liability and civil fraud
claims against directors, offi­

control over all PLS personnel,
cases, and investigations, and
incorporating the RTC's Office

cers, professionals, and others
who caused losses to the

The Office of Investigations
examines all failed thrifts under
the RTC's supervision to deter­
mine the nature and amount of

annual reports, covering the

failed institutions.
RTC investigators work
under the direction of the
Office of Professional Liability
and other offices of the
Division of Legal Services in
bringing claims against those
causing losses to thrifts. The

The Office of Professional
Liability (PLS) investigates and
prosecutes RTC claims arising

periods October 1, 1993, to
March 31, 1994, and April 1,

Office of Investigations also
assists the Department of

1994, to September 30, 1994,

from improper conduct of direc­
tors, officers, attorneys, apprais­
ers, accountants, and other

respectively, concerning all
pending professional liability

Justice in prosecuting criminal
conduct and recovering misap­
propriated funds through crimi­
nal and civil forfeiture and

Office of Professional
Liability

professionals who provided ser­
vices to failed thrifts.
At yearend 1994, the office
was in the process of prosecut­
ing 233 civil actions arising
from 187 failed institutions.
From the RTC's inception

of Investigations into the
Division of Legal Services
under the supervision of the
Associate General Counsel for
PLS. Additionally, pursuant to
the Completion Act, two semi­

cases were prepared and sub­
mitted to Congress. The office
has also established a proce­
dure for reviewing potential
claims based on fraud and
intentional misconduct that
were revived by the

through December 31, 1994,

Completion Act. PLS will
continue its review of such

PLS obtained judgments and

claims in 1995.


D M
Jl 1111 I R f M I T


restitution proceedings.
Criminal referrals are filed with
the Department of Justice on
any apparent criminal activity
discovered during the inves­
tigative process.
From the RTC's inception in
August 1989 through December
31,1994, the office assisted in

U t il

{(KIKE

LEGAL S E R V I C E S

the recovery of substantial funds
from a variety of sources:
Professional liability

of conduct regulations, laws,
and related directives and exec­
utive orders; and grants or
denies waivers for conflicts of

recoveries, including
Drexel/Milken:
$ 2, 121,000,000

interest under RTC contracts. A
system of internal controls
ensures that employees and
contractor ethics policies and

Financial Surety Corporation,

procedures are followed in the
RTC's field offices.
In 1994, the Office of
Ethics issued ethics advisory

Dallas, TX:
$1,225,000
Other recoveries, including
civil and borrower fraud:
$54,122,661

Office of Ethics
The Office of Ethics administers
regulations governing the fit­

The following
table reflects
criminal activity
by savings and

ness and integrity of indepen­
dent contractors that do
business with the RTC, and
enforces suspension and exclu­
sion regulations.
The office also administers
the RTC's compliance with
employee ethics and standards

opinions on job seeking; estab­
lishing a personal business
enterprise while employed by
the RTC; outside employment
and other activities; and gifts
and holiday parties. The office
also issued several ethics publi­
cations to employees, including

developed a post-employment
video, which is being used by
the RTC, the FDIC, and other
federal agencies, and a training
module entitled "Seeking and
Post Employment," which com­
plements the RTC's "Career
Transition" training module.
The office created electron­
ic versions of the Public and
Confidential Financial
Disclosure forms, which the
RTC began using in 1994. The
National Employee Ethics
Tracking System (NEETS) data­
base, being used by the RTC
and other federal agencies, was
developed by the Office of
Ethics to track financial disclo­
sure forms and disqualification

Do's and Don'ts of Networking
and Job Seeking, Do's and
Don'ts o f Establishing Your

letters on current and former

Own Enterprise While
Employed by the RTC, and the
revised Post Employment

and entities received final
notices of exclusion, which bar
them from contracting with the
RTC for a certain period.

Package. The Office of Ethics

RTC employees.
In 1994, 121 individuals

loan directors,
officers, and other
professionals

CRIMINAL ACTIVITY DETECTED BY THE RTC

detected by the
R T C , the Office o f
Thrift Supervision,
and others; and

Number of defendants charged
relating to RTC institutions:

2,028

Number of convictions:

1,859

Number sentenced:

1 ,7 7 9

legal action
undertaken by the
Departm ent of
Justice from the
inception of the
R T C through
Decem ber 3 1 ,
1994:


1 1111 S e r v i c e s


Number awaiting sentence:
Total number of restitution orders:

80
1,3 75

Total restitution ordered:

$523,218,923

Total restitution collected:

$21,108,189

K es e i i t i • i

Tiisi

( t nn i m

ii




ADMINISTRATION

ADMINISTRATION

f

he Division of Administration is
the main provider of corporate
services for the RTC. It provides
administrative services to the
Corporation in a wide range
of areas, including personnel,
organization and management
analysis, facilities, and executive
secretariat responsibilities.
The division is comprised of
the Offices of Administrative
Services, Human Resources
Management, Organization
and Resource Management,
and the Secretary.

buyouts at closed office sites,
and consolidated the travel audit
function in Washington, D.C.,
for headquarters and the Atlanta
and Valley Forge offices.
Additionally, the office provided
for storage and retrieval services
for approximately 1.9 million
cubic feet of RTC and institution
records at eight locations across
the country.

Office of Human
Resources
Management

Office of
Administrative
Services

The Office of Human Resources
Management (OHRM) adminis­
ters personnel and management
advisory services in the areas of

The Office of Administrative
Services develops and manages

staffing, position classification,
employee relations, training,
personnel management evalua­
tion, and personnel information
systems and processing.

the RTC's corporate services,
maintains the RTC's facilities,
and develops policies, proce­
dures, and guidelines for a wide
variety of functions, including
real property management and
administrative services. The
office provides direct opera­
tional support to all RTC head­
quarters activities and technical
assistance to the field offices in
these areas.
In 1994, the office began
transition planning on various
administrative support matters,
coordinating efforts between the
FDIC and the RTC at headquar­
ters and in the field. New man­
agement procedures were
implemented to ensure a
smooth transition and to oversee
the office closing process.
During the year, the office

During 1994, a large por­
tion of OHRM's work was
geared toward assisting in the
RTC's downsizing efforts and
transition planning for the return
of RTC personnel to the FDIC.
OHRM offered several pro­
grams to prepare employees for
change and to teach effective
job-search skills. In addition,
OHRM established resource
rooms to provide job-search
materials, and to assist employ­
ees with resume and job appli­
cation preparation.
To ensure the accuracy of
employee records, OHRM
established the Official
Personnel Folder Review

and correct errors in retirement
and benefit programs.
To meet the specialized
needs of the increasing number
of separating employees,
OHRM's Personnel Services
Branch reorganized and created
the Separation and Quality
Assurance Team, which exclu­
sively handles all personnel
matters relating to employee
separations from the RTC.
OHRM also held a wellattended Health Benefits Fair at
headquarters to publicize insur­
ance options available under
the Federal Employees Health
Benefits (FEHB) Program. A large
number of employees elected to
enroll in FEHB plans in anticipa­
tion of joining other federal
agencies as the RTC downsizes.
The office oversaw the
implementation of the electron­
ic Personnel Action Request
System (PARS), an on-line auto­
mated system designed to
process and track requests for
personnel actions that signifi­
cantly increased the efficiency
and timeliness of processing
personnel actions. OHRM also
implemented an automated sys­
tem for the distribution of
Notification of Personnel
Actions (Standard Form 50),
which has streamlined OHRM's
processing of personnel actions.

Office of
Organization and
Resource
Management

negotiated and implemented

Committee, which conducted a
review of more than 4,000 offi­

The Office of Organization and

sub-lease agreements or lease

cial personnel folders to identify

Resource Management (OORM)

QQ I II
 I I I $ T I I T I I I


K (S I I I I II I

T R IJT

( I R P I R 1 I II I

provides organization and man­
agement analysis services to the
Corporation. The office is also the
focal point for all budget formula­
tion, execution, analysis, and
reporting for the Division of
Administration; the Division of
Contracts, Oversight, and
Evaluation; and the Offices of
Corporate Communications and
Governmental Relations.
In 1994, OORM concluded
an extensive study of the RTC's
contract processing work flow
and time frames to identify effi­
ciencies and to develop perfor­
mance standards. The RTC's
contracts tracking system was
also reviewed in an effort to
improve reporting capabilities.
OORM also analyzed OHRM's
workload and staffing of person­
nel functions, and established
workload to staffing ratios for
that office.
The office continued to
chair the RTC-wide Delegations
Committee, whose goal is to
bring greater uniformity among
the various sections of the RTC's
Master Delegations of Authority
(delegations of authority under
which the RTC operates) and
also acted as the contact point
for RTC field employees
requesting clarifications and
interpretations of the Master

internal control reviews within
the Division of Administration
and the Division of Contracts,
Oversight, and Evaluation.
The office formulated the
1994 budgets for the Division of
Administration; the Division of
Contracts, Oversight, and
Evaluation; and the Offices of
Corporate Communications and
Governmental Relations.
OORM provided policy guid­
ance and direction in the
adjustment of the operating
budgets over the course of the
year for those offices.
OORM furnished staff,
contract, facilities, and work­
load data to support the
RTC/FDIC transition effort. In
addition, the office provided
extensive analytical support to
the FDIC's acting Deputy Chief
Operating Officer on the transi­
tion of RTC functions and staff
to the FDIC. This included a
comparative analysis of RTC
and FDIC organizations and

RTC information. During the
year, the office began coordinat­
ing the efforts of RTC and FDIC
staff to compile a history of the
RTC in response to a recom­
mendation by the Thrift
Depositor Protection Oversight
Board. At the RTC's sunset, the
FDIC will assume responsibility
for completing and publishing
the history.
In 1994, the office
processed more than 900 deci­
sions approved by the RTC
Deputy and Acting CEO,
Executive Committee, headquar­
ters vice presidents, and
Information Resources
Management Steering and Audit
Resolution Committees. The
office responded to more than
1,700 requests for information
about actions taken by the for­
mer RTC Board of Directors,
CEO, and other senior officials.
The office also processed 2,769
litigation filings.
The office oversees the
RTC's Client Responsiveness

functions, and an analysis of
the transition recommendations
included in Vice President
Gore's National Performance

Program, which handled more
than 32,200 requests in 1994.
During the year, the office

Review on reinventing the fed­
eral government.

responded to 259,508 requests
for various documents and

Office of the
Secretary

information. The office
received 1,124 Freedom of
Information and Privacy Act
requests in 1994, and complet­

Delegations of Authority. In
addition, OORM updated and
distributed the Corporation's

The Office of the Secretary
manages the decision-making

ed responses to 1,106 such
requests by yearend.

organizational charts, adminis­
trative services directories, and
headquarters and field execu­

process for the RTC's senior
executives, including record­
keeping and information-dis-

In 1994, the Employee
Ombudsman Program resolved
approximately 424 requests for

tive directories.
The office worked with the
Division of the Chief Financial

semination, and administers

assistance from employees. The

nationwide programs to provide
the public with complaint-reso-

Officer to report on the status of

lution services and access to

program provides employees with
the opportunity to voice concerns
and ideas to the RTC's CEO.

9 M
1
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P 1 1 1

I I I I I I S T 11 I I I I







CONTRACTS, OVERSIGHT, m EVALUATION

i: (IlTl\It A ( I T S , O V E R S I G H T ,

anh

EVALUATION

I he Division of Contracts,
Oversight, and Evaluation over­
sees virtually all aspects of the
RTC's contracting process. The
division is comprised of the
Offices of Contracts; Major
Dispute Resolution; and
Contractor Oversight and
Surveillance; and the
Administrative Evaluation Staff.

Office of Contracts
The Office of Contracts awards
and administers contracts at
headquarters, and coordinates
and oversees contracting activity
at RTC field offices, conservator­

The following
chart shows
R T C contracting
activity nation­
w ide from
inception in
August 1989
through 1994:
►

r

ships, and receiverships. The
office develops corporate-wide
contracting policies and proce­
dures, and ensures that they are
communicated to employees
through written guidance and
training. The office also adminis­
ters the Warranted Contracting
Officer Program, which identifies
employees who are authorized to
bind the RTC contractually, and
oversees the RTC's contracting
information system.
In 1994, the office's opera­
tional focus shifted to contract
administration and close-out
activities, including audit resolu­
tion and claims processing. The

Awards

Estimated Fees

1989

218

1990

10,473

478,353,216

1991

47,584

1,783,407,218

1992

46,090

1,338,009,923

1993

24,620

576,142,325

1994

17,973

553,612,768

TOTAL

146,958

$4,732,389,034

$

2,863,584

Note: Figures published in the 1993 R T C Annual Report have been restated to
reflect contract am endm ents, extensions, and renegotiations made o v e rtim e .

 K I ( T J . I l l i l l U I ,
( I I T


RTC Contract Policies and
Procedures Manual to address
remaining Completion Act
requirements and recommenda­
tions by the General Accounting
Office and the RTC Office of
Inspector General; and to
explain the audit resolution and
claims appeals processes. The
office developed the Guide for
Transition Planning to ensure a
smooth transfer of RTC con­
tracting activities, contracting
automated information systems,
and contracting corporate
records to the FDIC by
December 31, 1995.

Office of Major
Dispute Resolution

RTC CONTRACTING ACTIVITY

Year

office revised and updated the

The Office of Major Dispute
Resolution addresses major
claims and disputes arising from
RTC contractual relationships
with private sector firms. The
office also responds to ques­
tions raised by audit organiza­
tions, including the General
Accounting Office, and the
RTC's Office of Inspector
General and Office of
Contractor Oversight and
Surveillance.
The Office of Major
Dispute Resolution assembles,
analyzes, and evaluates docu­
ments associated with major
claims and disputes, researches
and assesses the merits of each
claim, and negotiates with con­
tractors to ultimately resolve all
outstanding issues.

111

! f 1I I I I I I I

HU I I I 1 I I I

I It I J T ( I K P I I I T I I I

C O N T R A C T S , O V E R S I G andT ,E V A L U A T I O N
H

Office of Contractor
Oversight and
Surveillance
The Office of Contractor
Oversight and Surveillance
assists program offices and the
Office of Contracts in engaging,
monitoring, and evaluating
major contractors. It conducts
background investigations of
contractors and contractor per­
sonnel, and financial and perfor­
mance reviews of contractor
operations; investigates allega­
tions of contracting irregularities;
coordinates major RTC contract
terminations; and initiates sus­
pension and exclusion actions
of contractors for fraud, non-per­
formance, and violations of fit­
ness and integrity.
The office administers the
Competition Advocacy Program
to provide an independent
advocate for the fair and equi­
table treatment of firms seeking
to do business with the RTC.
In 1994, the office complet­
ed background investigations of
13,563 contractors and 33,607
contractor personnel. It closed
436 contractor fitness and integri­
ty investigations, resulting in 150
suspension and exclusion actions.
The office issued 288 perfor­
mance and financial review

ing to do business with the RTC.
The office established and
achieved minority outreach
goals for hiring independent
public accounting firms to con­
duct contractor reviews. In 1994,
more than 43 percent of the
office's review contracts were
awarded to minority- or womenowned firms or joint ventures.

Administrative
Evaluation Staff
In 1994, the Administrative
Evaluation Staff continued ana­
lyzing and reviewing the imple­
mentation of contracting and
administrative programs
throughout the RTC. The office
completed two Program
Compliance Reviews of con­
tracting and administrative
activities at each of the six field
sites and at headquarters.
The division continued its
evaluation of the program
offices' compliance with the
Corporation's delegations of
authority. The staff made rec­
ommendations on improving
the RTC's operating and man­
agement practices. It also
assessed the division's vulnera­
bilities as a result of the
Corporation's downsizing and
transition back to the FDIC.

reports of RTC contractors during
the year, recommending
improvements in contractor oper­
ations and identifying more than
$68 million in questionable costs.
During the fourth quarter of
T994, the office implemented
procedures to conduct fitness and
integrity background investiga­
tions of law firms doing or seek­

Digitized for MFRASER 1 1 I I I I E P 1 1 T
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4 1


(IITIIITS,

llllillll,

111

E V I II A T I• I

Q |







ASSET MANAGEMENT 4 1 SALES

A S S E T M A N A G E M E N T ami S A E E S

f

disposes of assets acquired from
failed thrifts, and oversees the
management and operation of
insolvent thrifts in conservator­
ship and receivership.

During 1994, RTC asset
sales and collections totaled $27
billion (net of putbacks). From
inception through yearend
1994, asset sales and collections
amounted to $384.5 billion (net
of putbacks); book value reduc­
tions totaled $439 billion for the
same period. The asset invento­
ry remaining at yearend 1994
totaled $25 billion.
As the year began, 63 thrifts

were in the RTC's conservator­
ship program; no new thrifts
entered the program during
The follow ing chart
details asset
sale s, collections,

1994. Sixty-two conservatorships
were resolved, leaving only one
conservatorship on December
31,1994. Two non-conservator­

Department of
Operations and
Asset Management

ship thrifts were resolved during
the year through the Accelerated
Resolutions Program. At
yearend, 211 receiverships had

The Department of Operations
and Asset Management over­
sees conservatorship and
receivership operations, coor­

been approved for termination;
of those, 96 were terminated and
115 were in the process of being
terminated. In addition, 533
open receiverships (not yet
approved for termination)
remained in the RTC's inventory
at the close of 1994.
The division consists of the
Departments of Operations and

dinates national asset sales ini­
tiatives, and develops and
implements policies and pro­
cedures governing the man­

he Division of Asset Manage­
ment and Sales manages and

Asset Management, Securiti­
zation Management, Securities
Transactions, Asset Marketing,
and Affordable Housing.

agement and disposition of
assets. The department consists
of the Offices of Operations,
Settlement Workout and Risk
Management, SAMDA
Program Management, and
Systems and Transaction
Review; and the Asset Policy,
Environmental, and Seller
Financing Branches.

1994 CONSERVATORSHIP ASSET SALES AND OTHER ACTIVITIES

(dollars in millions)

and other
conservatorship

mm

activities during

Balance

19 9 4 .

New
Institutions

63 Institutions 0 Institutions

►

Cash and Securities*

$ 7,840

$0

Resolutions

12/31/94
Balance^

Collections Adjtttnwiti" 62 Institutions*

1 1nstitution

Activities*
Sales

$

748

$4,432

$ 2,586

$ 4,485

$

761

1-4 Family Mortgages

5,038

0

528

613

(163)

2,933

801

Other Mortgages

4,343

0

561

330

(324)

2,989

139

Other Loans#

1,324

0

782

1,024

1,192

630

79

Owned Assets8

1,102

0

343

5

(76)

663

14

Other Assets0

3,519

0

282

836

479

2,608

273

$23,166

$0

$3,244

$7,240

$3,695

$14,309

$2,068

Total

No te ; Detail m ay not add to totals due to rounding.
* Includes activities from all institutions in conservatorship at any tim e during 19 9 4 .
* * Includes new asset purchases, valuation revisions, and other transactions affecting value,
t These figures are extracted from the Financial Managem ent System .
t t includes remaining assets from Standard F S A , Gaithersburg, M D , resolved on Novem ber 1 8 ,1 9 9 4 , in addition to the assets of the
one remaining conservatorship.
* Includes investment-grade securities and m ortgage-pool securities.
* Includes com m ercial, consum er, and student loans.
§ Consists of repossessed residential and non-residential real estate, land, and other repossessed assets.
° Includes a w ide array of assets, som e types of mortgage servicing rights, office equipm ent, and subsidiary companies of con­
trolled institutions.

Digitized Q FRASERe t Mi i » t e i e i i
for ]
Ass


h i

Su e s

K e si i i t i i i

TIis i

( I I M I ITI I I

262 conservatorships from the
FDIC. From inception through
yearend 1994, 705 conservator­
ships were resolved, leaving
one unresolved conservatorship

O ffic e o f O p e ra tio n s
The Office of Operations, with
offices at headquarters and in the
six field offices, monitors and
operates conservatorships and
receiverships, conducts closings
of insolvent institutions and sub­
sequent payment of depositor
and creditor claims, and admin­
isters post-resolution settlement
activity with acquirers.
The office analyzes and
pays claims resulting from the
representations and warranties
provisions of asset sales agree­
ments, manages the termination
of employee benefit programs,
coordinates and directs opera­
tions for terminations of
receiverships, administers poli­
cies promoting the settlement
of delinquent obligations of

at yearend.
At the beginning of 1994,
the RTC was managing 63 con­
servatorships. During the year,
no additional thrifts entered the
program, and 62 conservator­
ships were resolved.

Conservatorship
Operations Activities
A sset

and

L ia b il it y M a n a g e m e n t

The RTC prepares a conservator­
ship for resolution by downsiz­
ing it primarily through asset
sales. This accelerates the pay­
ment of liabilities of the failed

potential asset purchasers with
the RTC and the FDIC prior to

assets at December 31,1993,
totaled $23.2 billion; they were
reduced to $2.1 billion by
yearend 1994 (this figure
includes $714 million in assets
of one institution that was
resolved on November 18,
1994). The resolution of 62 con­
servatorships during the year
removed $14.3 billion in assets
from the program. Book value
sales and collections during
1994 totaled $10.5 billion.
The overall liability expens­
es of the institutions being pre­
pared for resolution are
reduced by eliminating whole­
sale (high-cost) deposits,

CONSERVATORSHIP INSTITUTIONS 1989-1994

the sale of assets, and issues
reports on program activities.
The headquarters office
develops policies and proce­

Total
Resolutions

Established ***

Resolved

262

0

0

56

37

37

207

309

232**

Post-FIRREA 1989
(8/9-12/31)
1990
1991

123

211

1992

50

60

8

26

27tt

1994

0

62

64*

706

705

744#

Total 1989-94
*

From inception in August 1989

A

69+

1993

ing the costs and risks to the
general public. The office pro­
vides day-to-day guidance in
implementing these policies
and procedures.

The following chart
shows the number
of thrifts placed in
the R TC conserva­
torship program
and the number of
resolutions:

315*

Pre-FIRREA

dures to ensure that all field
operation activities comply
with applicable laws and sup­
port the RTC's goal of minimiz­

Insiilutions andAssets in
Conservatorship

institution and reduces depen­
dency on the Treasury
Department to fund future oper­
ations. Gross conservatorship

Includes six non-conservatorship institutions, four of which were resolved
through the Accelerated Resolutions Program (A R P ).

* * Includes 21 non-conservatorship institutions resolved through A R P .

through yearend 1994, the RTC
managed a total of 706 institu­
tions in the conservatorship pro­

t

gram. When the RTC was

*

established, the office immedi­
ately assumed responsibility for

f t Includes 39 non-conservatorship institutions, 3 7 of which w ere resolved
through A R P .

111111

1111

i FRASER
ne
Digitized forn i


Includes nine non-conservatorship institutions resolved through A R P .

f t Includes one non-conservatorship institution resolved through A R P .
Includes tw o non-conservatorship institutions resolved through A R P .

Isiii

1 111 ( e i e i t i n

Sues

ASSET MANAGEMENT

an SALES

and establishes a conservator­

The following chart
sum m arizes RTC
advance activity in
conservatorships
and receiverships
during 1994:

1994 RTC CONSERVATORSHIP AND
RECEIVERSHIP ADVANCE ACTIVITY

Principal Amount Only
(dollars in billions)

►

Advances Outstanding at 12/31/93
Total Advances Made in 1994
Total Advances Paid in 1994

$ 11.9
1.9
(5.8)*

Advances Outstanding a t 12/31/94

$ 8 .1

* Advances paid balance includes $920 million in non-cash payments, but does
not include $523 million in interest collections during 1994.
Note: Detail m ay not add to totals due to rounding.

Federal Home Loan Bank
advances, and short-term col­
lateralized borrowings. Funding
is raised for this purpose pri­
marily through asset sales sup­
plemented with borrowings
from the RTC, as necessary.
E x e c u t iv e C o m p e n s a t io n

Section 3(A) of the RTC
Completion Act requires the
RTC to report, as part of its
annual report, the total compen­
sation paid to directors and
senior executives of thrifts for
which it was appointed conser­
vator or receiver during the cal­
endar year. When an institution

executives) in RTC conservator­
ships in operation during 1994

is placed into conservatorship,
its directors are removed on the
day of intervention. As a result,
no compensation is paid to any

►

is listed in the table "Total
Executive Compensation for
RTC Conservatorships in 1994,"
page 31. Receiverships do not

of these directors while the insti­
tution is in conservatorship.
Whether senior executives are
asked to remain in managerial
or executive positions with the
conservatorship depends on
their skills and knowledge, and

have officers or directors; there­
fore, there is no schedule for
their compensation.

the needs of the managing
agent's team.
Salary schedules for senior
management of conservatorship

employee benefit plans in both
conservatorships and receiver­
ships while adhering to applica­
ble Employee Retirement
Income Security Act (ERISA)
statutes. From inception of the

institutions were established by
RTC directive in 1990. When
the RTC intervenes in a thrift

[ EMPLOYEE BENEFIT PLANS
The following
chart sum m arizes
the termination of
em ployee benefit
plans during 1994:

ship, salaries of those asked to
remain in managerial or execu­
tive positions are adjusted to the
levels established by the direc­
tive. For the 63 institutions
operating in the RTC conserva­
torship program during 1994, a
total salary savings of $57.3 mil­
lion was achieved, with a corre­
sponding reduction of 939
officers from pre-conservator­
ship totals. Compensation paid
to all officers (including senior

Open Plans at 12/31/93
Plans Reclassified as Terminated

.
145
(2)

E m p l o y e e B e n e f it P l a n s

During 1994, the RTC contin­
ued its emphasis on terminating

RTC through December 31,
1994, 450 qualified plans were
terminated; 52 plans remained
to be terminated at yearend.
The Pension Tracking
System (PENTRACK), which is

(90)

used to monitor the administra­
tion and termination of pension

Plans Transferred to an Acquirer
(Old Stone F S B , Providence, Rl)

(1)

provide improved data quality
reporting. The FDIC is adopting

Open Plans at 12731/94

52

Plans Terminated During 1994

plans, was modified in 1994 to

Is
i f i I t i m i E i r


iii

i n n

PENTRACK and plans to merge
RTC data into the FDIC's data­
base at sunset.

R e s 111 t 111

Trist

( i i m i i i i i i

TOTAL EXECUTIVE COMPENSATION FOR RTC CONSERVATORSHIPS IN 1994
PRE-CONSERVATORSHIP
INSTITUTION NAME

CITY

STATE

RESOLUTION
(IN THOUSANDS)

NUMBER OF
OFFICERS*

ANNUALIZED
COMPENSATION

1994

AVERAGE
COMPENSATION

NUMBER OF
OFFICERS*

ANNUALIZED
COMPENSATION

AVERAGE
COMPENSATION

ALTUS FSB

MOBILE

AL

298,664

59

$ 3,080,000

$52,203

27

ADVANCED FSB

NORTHRIDGE

CA

3,949

3

191,732

63,911

2

104,632

52,316

DELTA FSB

WESTMINSTER

CA

14,706

22

961,000

43,682

2

90,000

45,000

GOLDEN STATE FSB

IRVINE

CA

42,288

6

458,966

76,494

1

53,731

53,731

GREAT AMERICAN FSA

SAN DIEGO

CA

1,235,987

145

11,306,932

77,979

62

4,327,662

69,801

GUARDIAN FSA

HUNTINGTON BEACH

CA

170,032

17

996,105

58,594

2

153,990

76,995

$

$

991,329

$36,716

PAN AMERICAN FSB

SAN MATEO

CA

133,855

8

500,000

62,500

3

177,144

59,048

WESTERN FSB

MARINA DEL REY

CA

2,389,955

18

3,219,003

178,834

6

907,700

151,283

WESTSIDE BANK, FSB
COASTAL FSB

LOS ANGELES

CA

62,191

6

458,693

76,449

4

215,780

53,945

NEW LONDON

CT

117,852

18

789,000

43,833

4

223,701

55,925

BAY FSB

WEST PALM BEACH

FL

2,510

5

194,000

38,800

1

33,139

33,139

CITIZENS FSA

JACKSONVILLE

FL

20,812

6

201,824

33,637

4

143,960

35,990

CORAL COAST FSB

BOYNTON BEACH

FL

9,887

4

218,258

54,565

3

157,358

52,453

GOLDOME FSB

ST. PETERSBURG

FL

207,083

36

1,449,000

40,250

5

247,063

49,413

HANSEN FSB

PALM BEACH GARDENS

FL

6,337

3

139,599

46,533

3

152,642

50,881

HOLLYWOOD FSB

HOLLYWOOD

FL

332,661

3

392,000

130,667

8

470,200

58,775

JACKSONVILLE FSA

JACKSONVILLE

FL

52,275

7

369,238

52,748

3

147,101

49,034

LIFE FSB

CLEARWATER

FL

23,331

14

586,000

41,857

3

144,000

48,000

SECURITY FSA

PANAMA CITY

FL

18,015

3

271,150

90,383

3

186,300

62,100

THE GUARDIAN BANK, A FSB

BOCA RATON

FL

32,456

11

612,706

55,701

6

337,624

56,271

COBB FSA

MARIETTA

GA

14,496

17

934,000

54,941

2

76,725

38,363

SOUTHERN FSA OF GEORGIA

ATLANTA

GA

47,309

11

814,000

74,000

2

78,000

39,000

UNITED FSA OF IOWA

DES MOINES

IA

170,195

11

513,322

46,666

4

230,200

57,550

IRVING FB FOR SAVINGS, FSB

CHICAGO

IL

131,911

19

810,371

42,651

19

800,286

42,120
47,007

LEMONTFSA

LEMONT

IL

76,770

2

291,880

145,940

3

141,022

FRANKLIN FSA

OTTAWA

KS

1,004,766

31

3,515,000

113,387

14

1,084,941

77,496

THE PIONEER FS&LA

PRAIRIE VILLAGE

KS

95,202

8

369,025

46,128

5

161,375

32,275
33,856

CARROLLTON HMSTDASSN, FA

NEW ORLEANS

LA

19,418

4

195,010

48,753

4

135,422

DRYADES S&LA, FA

NEW ORLEANS

LA

54,065

13

756,000

58,154

4

218,234

54,559

LIFE FSB

BATON ROUGE

LA

5,730

3

112,638

37,546

3

106,521

35,507

LA

1,439,363

37

2,103,649

56,855

24

1,252,964

52,207

MA

39,833

5

240,000

48,000

2

164,792

82,396

OAK TREE FSB

NEW ORLEANS

NEW ENGLAND FSA

WELLESLEY

PLYMOUTH FSA

PLYMOUTH

MA

59,701

14

527,842

37,703

12

348,395

29,033

JOHN HANSON FSB

BELTSVILLE

MD

100,786

51

2,909,000

57,039

3

189,061

63,020

POTOMAC FSB

SILVER SPRING

MD

23,715

4

290,000

72,500

1

39,400

39,400

SECOND NATIONAL FSA

SALISBURY

MD

726,860

55

3,865,436

70,281

30

1,487,275

49,576

STANDARD FSA*

GAITHERSBURG

MD

687,219

12

1,797,000

149,750

7

875,000

125,000

FIRST FSA

LEWISTON

ME

34,239

7

264,670

37,810

4

167,093

41,773

SECURITY FS&LA

JACKSON

MS

159,163

28

1,072,487

38,303

16

590,174

36,886

HOMEBANK FSA

GILFORD

NH

43,713

20

784,000

39,200

8

319,877

39,985

CARTERET FSB*

NEWARK

NJ

1,283,579

106

7,266,329

68,550

52

3,536,723

68,014

HANSEN FSA

HAMMONTON

NJ

187,371

15

1,211,000

80,733

7

213,750

30,536

POUFLY FS&LA

NEW MILFORD

NJ

259,799

23

1,176,982

51,173

9

466,284

51,809

PROSPECT PARK FSB

WEST PATERSON

NJ

109,464

49

2,693,000

54,959

7

489,446

69,921

SECURITY FSB

VINELAND

NJ

470,754

105

4,590,935

43,723

65

2,610,590

40,163

VOLUNTEER FSA

LITTLE FERRY

NJ

18,138

6

181,000

30,167

3

136,176

45,392

WHITE HORSE FS&LA

TRENTON

NJ

25,150

4

271,000

67,750

3

123,230

41,077

COLUMBIA BANKING FSA

ROCHESTER

NY

631,490

77

4,992,000

64,831

44

2,500,013

56,818

TRANSOHIO FSB

CLEVELAND

OH

1,006,769

30

2,611,000

87,033

18

1,769,841

98,325

FAR WEST FSB

PORTLAND

OR

247,832

9

688,478

76,498

3

262,872

87,624

ABRAHAM LINCOLN FSA

DRESHER

PA

43,452

11

888,000

80,727

5

267,807

53,561

HOMESTEAD FSA

MIDDLETOWN

PA

53,932

2

695,154

347,577

11

453,467

41,224
37,827

UKRAINIAN FS&LA

PHILADELPHIA

PA

32,648

5

215,795

43,159

5

189,135

OLD STONE FSB

PROVIDENCE

Rl

1,205,044

283

11,827,515

41,793

20

1,517,597

75,880

CITADEL FS&LA

CHARLESTON

SC

12,311

6

254,800

42,467

4

167,500

41,875
51,344

COOPER RIVER FSA

NORTH CHARLESTON

SC

56,379

7

461,000

65,857

4

205,375

CHEROKEE VALLEY FSA

CLEVELAND

TN

70,775

17

521,125

30,654

6

244,851

40,809

COMMONWEALTH FSB

MANASSAS

VA

16,960

7

397,000

56,714

6

252,419

42,070

FEDERAL SA OF VIRGINIA

FALLS CHURCH

VA

7,206

3

160,000

53,333

1

75,457

75,457

HOME FSB

NORFOLK

VA

67,552

17

624,000

36,706

3

154,704

51,568

LIBERTY FSB

WARRENTON

VA

50,174

3

185,000

61,667

3

179,536

59,845

PIEDMONT FSA

MANASSAS

VA

257,786

5

382,712

76,542

3

232,407

77,469

VISTA FSA

RESTON

VA

40,338

8

451,000

56,375

4

235,756

58,939

$16,264,203

1,544

$91,305,361

$59,136

605

$34,0 16,749

$56,226

TOTAL

* “ Num ber of Officers” represents all officers as well as the three highest paid em ployees,
t “ Net A ssets” for Standard F S A and Carteret FS B are year-end figures.
N o te : A ll conservatorships except Carteret F S B were resolved in 19 9 4 .

1 1 1 1 1 1 1 M I I
19 M 1


I i $n

I n m

i m

h i

si m

Q

ASSET MANAGEMENT a\ii S AL E S

During the year, the FDIC
and the RTC formed a task
force to enter into a Memo­
randum of Understanding with
the Pension Benefit Guaranty
Corporation (PBGC) on the
handling of underfunded
defined benefit pension plans
and other issues of common
interest between the two agen­
cies and the PBGC. Upon exe­
cution of the memorandum, it
is anticipated that the PBGC
w ill expedite its review of RTC
or FDIC applications for dis­
tress terminations of under­
funded defined benefit
pension plans. Acceptance of
an application results in the
PBGC assuming trusteeship for

ed. In addition, 533 open
receiverships (not yet
approved for termination)
remained in the RTC's inven­
tory at the close of 1994.
During 1994, the office
issued the RTC Receivership
Termination M anualan official
compilation of RTC policies, pro­
cedures, and guidelines applica­
ble to the receivership
termination process for all RTC
offices. A national Receivership
Termination Training Conference
was held in October 1994 to dis­
cuss issues affecting receivership
terminations and to instruct head­
quarters and field employees in
the use of the new manual.

the underfunded plan. The

Settlem en ts

first trusteeship agreement for
an underfunded pension plan
under RTC administration was
signed by the PBGC in 1994.
Applications for four addition­
al trusteeship agreements were

Receivership settlement with
failed thrift acquirers under reso­
lution agreements involves the
administration of the purchase

pending at the end of the year.

olutions in 1993, resolution
activity increased significantly
in 1994. Sixty-one receiver­

remain open. In 1994, the

ships requiring settlement

RTC issued approvals for the
termination of 122 receiver­

activity were added to the
RTC's inventory during the
year, including two non-con­
servatorship institutions

ships. From inception of the
program in June 1992 through
yearend 1994, 211 receiver­

The Accelerated Dividend
Program (ADP) expedites the
return of funds to the
Corporation and to creditors
by authorizing field office vice
presidents to approve divi­
dend cases. In 1994, cash div­
idends to the Corporation
totaled $9.1 billion and non­
cash dividends totaled $4.4

the Corporation through the
program totaled $72.8 billion

which there were no legal or
other compelling reasons to

R e c e iv e r s h ip s

L i q u i d a t i n g D i v id e n d s

between the RTC and the acquir­
ers. The process, which contin­

at least one year old and for

of

dures in the field, where settle­
ment activity with acquirers
is completed.

and assumption agreements

In 1992, the RTC began termi­
nating receiverships that were

T e r m in a t io n s

office focused more resources
on monitoring and overseeing
existing policies and proce­

billion. From the inception of
the dividend process in
September 1990 through
yearend 1994, the recovery to

ues for approximately six months
after resolution, allows for the
orderly transfer of business asso­
ciated with the failed thrifts from
the RTC to the acquirers.
After the slow pace of res­

ClaimsandSetUement Activities

completed at yearend.
Because of an increased
workload during the year and
in anticipation of sunset, the

in cash and $56.2 billion in
non-cash dividends.
I n s u r a n c e Pa y m en t s

During 1994,1,948,688 insured
deposit accounts, as of date of
resolution, at 64 failed thrifts
were protected; 1,274,922 of the
deposit accounts were protected
through the purchase and
assumption of the failed thrift by
one or more acquirers. The
remaining 673,766 deposit
accounts were either transferred

resolved through the

to an acquiring institution in an

nation; of those, 96 were

Accelerated Resolutions
Program. Settlement was con­

terminated and 115 were in
the process of being terminat­

cluded for 57 institutions, leav­
ing 35 settlements to be

insured deposit purchase and
assumption or paid off by RTC
check in a payoff transaction. Of

ships were approved for termi­

Q j i ! !
 I ! I I I I C E I ( I T I I I


S u n

the $21.6 billion in deposits that

R n o111111

T im

( oi n i m

11

ASSET

were involved in an insured
deposit purchase and assumption
or payoff transaction, only $21.3
million, or less than one percent
of the total, were uninsured.
C r e d it o r C l a im s

Essential goods and services pro­
vided to RTC conservatorships
are paid as administrative
expenses. General trade credi­
tor claims of former associa­
tions, however, are considered
to be unsecured claims. Pass­
through receivership data from
RTC inception through year­
end T994 show that $575 mil­
lion in 10,184 creditor claims
were allowed, $19 billion in
claims from 6,668 creditors
were disallowed, and $7.2 bil­
lion in 649 claims were still
pending at yearend. In liqui­
dating receiverships, $161 mil­
lion in 5,910 creditor claims
were allowed, while $4.1 bil­
lion in claims from 7,933 cred­
itors were disallowed; $1.8
billion from 769 claims were
still pending at yearend.

reserve account balance was
approximately $1.5 billion.
A data quality action plan
was instituted in 1994 for the
Warranties and Representations
Account Processing System
(WRAPS). By yearend, WRAPS
had achieved nearly perfect
accuracy.
Pr o g ra m Su ppo r t

The Program Support unit imple­
ments policies and regulations
that promote payment or settle­
ment of outstanding, delinquent
obligations by individuals who
have caused losses to insured
institutions under RTC or FDIC
control. The unit also enforces

M A N A G E M E NaTi S A L E S
m

restrictions prohibiting these indi­
viduals from purchasing assets
owned by the RTC until their
obligations have been paid or
settlements have been reached.
From inception of the pro­
gram in September 1992 to
yearend 1994, the unit reached
settlements totaling nearly
$311 million; of that total,
$88.1 million were settlements
on assets under the direct own­
ership or control of the FDIC.
O ffice of Settlem ent
W orkout and Risk
M anagement
The Office of Settlement Workout
and Risk Management restruc-

CONSERVATORSHIP AND RECEIVERSHIP ASSETS UNDER
RTC MANAGEMENT AS OF DECEMBER 3 1 ,1 9 9 4
(percentage of gross assets)

Mortgage Backed
Securities 2%

Cash &
Securities*
9%

Delinquent
Loans 22%

REO 8%

A s s e t C l a im s

From inception through 1994,
the RTC processed approxi­
mately 43,000 asset claims
seeking $2.3 billion under the
terms of asset sales agree­
ments. At yearend, the RTC
had approved and paid $594
million on these claims
(includes asset repurchases

Other Performing
Loans 5%
Other
Assets 27%
Other Performing
Mortgages 11%

and actual losses).
RTC conservatorships,
receiverships, and subsidiaries
place funds in reserve to cover
the cost of future asset claims.
As of December 31, 1994, the

I FRASER
h m i
Digitized for H ! I n i n


Total Assets: $25 Billion

Performing
1-4 Family Mortgages 16%

‘ Excludes $14.8 billion in cash, investments (including restricted investments), and accounts receivable
accumulated by receiverships.

ASSET

M A N A G E M E NaTm i S A L E S

yearend, SAMDA contractors
were managing assets with a
total book value of $6 billion.
From August 1990 through
December 1994, SAMDA con­
tractors managed assets with a
total book value of $37 billion
and disposed of 84 percent, or
$31 billion, of those assets.
In 1994, the office devel­
oped policies and procedures
governing the phasing out of the

1994 ASSET SALES AND COLLECTIONS CONSERVATORSHIPS, RESOLUTIONS AND RECEIVERSHIPS

SAMDA program in 1994 and
1995. The office also revised its
internal control review proce­
dures to reflect the SAMDA pro­
gram's increased emphasis on
contract expiration. Contractor
performance evaluation criteria
were revised to improve consis­
tency and uniformity in rating
contractor performance.

REO $2
Total Sales and Collections: $27 Billion (net of putbacks*)

O ffice of Systems and
Transaction Review

*Putbacks totaled $243 million in 1994. Putbacks include some assets returned from pre-1994 resolution sales.

The Office of Systems and
Transaction Review coordinates
and monitors the performance
of the division's information sys­
tures problem loans and negoti­

gram in July 1992 through

ates settlements with defaulted
borrowers. Assets assigned to the
office generally have a high book

yearend 1994, the office nego­
tiated settlements, restructured
loans, and took other actions

value; may have the potential for
substantial legal costs; may be
involved in, or have the threat of,
complex litigation; or may not

involving $11.8 billion in
assets, recovering cash collec­
tions of $1.2 billion.

have sold after a prolonged peri­
od according to their proposed
disposition plans.

O ffice of SAM DA
Program M anagement

In 1994, the office's work­

tems, including the Real Estate
Owned Management System
(REOMS), Asset Manager System
(AMS), and Subsidiary
Information Management
System (SIMAN). The office also
acts as database manager for the
RTC's Central Loan Database
(CLD), which lists all loan assets
marketed by the RTC.
In 1994, the office imple­
mented formal data quality

The Office of SAMDA (Standard
Asset Management and

out assistance teams restruc­

Disposition Agreement) Program

tured, sold, or worked out $4.3
billion in problem assets. By

Management issues and moni­
tors all SAMDAs, which totaled

action plans for the division's
major information systems.
Data quality for these systems

yearend, $1.4 billion in assets
were under review.

191 from inception of the
SAMDA program in August

was improved during the year.
The staff participated in

1990 through yearend 1994. At

two FDIC/RTC joint task forces

l l
| h i
Ma n a g e m e n t


From inception of the pro­

a nd

Sai

e

s

R e s oi

ut

i

on

T u n

( or

p

oa i

t

i

on

A S S E T M A N A G E M E N T ami S A L E S

to evaluate the FDIC's future
information needs. Office rep­
resentatives served on the
FDIC Asset Disposition System
Project Task Force to review
the FDIC's future information
management requirements for
asset management and disposi­
tion activities. The staff also
worked with the FDIC's
Division of Depositor and
Asset Services to assess
whether the RTC's asset-related
systems would meet the FDIC's
future needs.
As the CLD database
manager, the office tracked
sales initiatives from inception
to final closing transactions.
The office also continued to
review individual assets and
assigned them to the sales ini­
tiatives considered to be most
appropriate and most likely

The branch established
policies, procedures, and regu­
lations to implement the RTC
Completion Act's asset manage­
ment requirements. Rules and
directives were written to
achieve the following objec­
tives, among others:
■ require the marketing of
real estate on an individual
basis for at least 120 days prior
to its inclusion in a multi-asset
sales initiative;
■ strengthen the disposition
strategy for larger real estate
assets and non-performing
loans secured by real estate;
■ provide a process for the
RTC's non-defaulting business
and commercial borrowers to
appeal credit decisions
adversely affecting them;

to achieve maximum recovery
values. In 1994, the RTC's data­
base management CLD con­

■ enhance opportunities for
the General Services
Administration to acquire com­
mercial office property;
■ provide tenants in RTC-

tract was modified to reflect the
decreasing loan asset inventory,
a step that resulted in signifi­
cant cost savings.

owned residential property an
opportunity to buy their resi­
dences; and
■ establish a preference for

In compliance with the
RTC Completion Act, the office
also began providing the

real estate sales offers that pro­
vide housing for the homeless.

General Services Admin­
istration with listings of com­
mercial office properties

procedure permitting bank
branches located in predomi­
nantly minority neighbor­

acquired by the RTC that may
be available for sale.

hoods to be leased on a
five-year rent-free basis to

Asset Policy Branch

depository institutions. From
the program's inception on

The branch developed a

minority- or women-owned
The Asset Policy Branch devel­
ops and maintains policies and

September 12, 1994, through

The staff continued to
administer the RTC's Finder's Fee
Program, which permits the RTC
to pay a fee to private-sector
firms in return for the recovery of
RTC funds considered unclaim­
ed, abandoned, or lost. From its
inception in October 1993
through December 1994, the
program achieved cash recover­
ies of more than $1 million. The
program was expanded in 1994
to include non-cash recoveries.

Environmental Branch
The Environmental Branch
develops policies and proce­
dures governing the sale and
conveyance of assets containing
environmental resources and
environmental hazards.
The branch revised the envi­
ronmental representations and
warranties used in securitized
transactions in a manner that
reduces the RTC's exposure to
environmental claims filed under
these transactions. The staff also
provided technical environmen­
tal support to the National Sales
Center in the development of
two targeted sales initiatives: the
sale of special resource assets,
and the sale of assets with haz­
ardous conditions.
During the year, the branch
continued to sell properties with
special environmental resources
to public agencies and non-prof­
it organizations for conservation
purposes. From the program's
inception in September 1990

yearend 1994, 13 branches

through yearend 1994,112
properties containing approxi­

sition of real estate, loans, and

with an appraised value
exceeding $6 million were

mately 58,000 acres were sold,
resulting in $121 million in

other assets.

included in the program.

recoveries.

procedures governing the man­
agement, evaluation, and dispo­

I9 9 * 1
11111 R e m i t


I s s 11 M 111 ( 11 [ i

t h i

Su e s

Q |

AS SE T MANAGEMENT

wit S A T E S

Seller Financing Branch
The Seller Financing Branch
originates seller-financing loans
for commercial REO, loans, and
equity interests in multi-asset
sales transactions.
In 1994, the RTC closed
approximately $1.5 billion in
commercial seller-financed
transactions. From the pro­
gram's inception in March 1991
through yearend 1994, the RTC
closed approximately $5 billion
in commercial seller-financed
transactions. During the same
period, the RTC received $2.4
billion in funds from the liqui­
dation of RTC commercial sell­
er-financed notes.
The branch continued to
oversee the RTC's commercial
seller financed multi-asset sales
transactions and land fund trans­
actions during the year. The
branch also developed nation­
wide standardized servicing
oversight and audit procedures,
and initiated Office of Contractor
Oversight and Surveillance
audits for all commercial seller
financing underwriters.

Department of
Securitization
Management
The Department of Securiti­
zation Management develops,
manages, and implements pro­

transactions to dispose of non­
performing and sub-performing
loans. These transactions
involve establishing partner­
ships between the RTC and pri­
vate investors who purchase,
manage, and then sell portfo­
lios of non-performing and sub­
performing loan assets and
share in the profits with the
RTC. The structure provides
incentives for equity partners to
work out portfolios with the
highest returns to the partners
and the RTC.
Through the securitization
program, approximately $2.6
billion (book value) in per­
forming loans were sold in
1994. One transaction totaling
approximately $600 million
was collateralized by perform­
ing single-family mortgages;
two transactions totaling
approximately $2 billion
were collateralized by per­
forming commercial and
multi-family mortgages.
Another $1.5 billion
(book value) of non-perform­
ing commercial and multi-fam­
ily mortgage loans were sold
in 1994. Three N-Series trans­
actions accounted for nearly
$1 billion of the assets; six SSeries transactions accounted
for approximately $500 mil­

Department of
Securities
Transactions
The Department of Securities
Transactions sells securities
acquired through RTC interven­
tions and manages the reinvest­
ment of the RTC's cash. The
types of securities offered include
junk bonds, equity securities,
U.S. Treasury obligations, federal
agency and mortgage-backed
securities, limited partnership
interests, nationally syndicated
bank loans, and special purpose
finance subsidiaries (SPFS).
From inception of the secu­
rities sales program in March
1990 through yearend 1994,
the RTC sold $64 billion in
securities. In 1994, the RTC sold
over $1.8 billion (par value) in
securities. During the year, the
office used several programs to
sell highly illiquid securities,
including limited partnership
interests, highly leveraged trans­
actions, SPFSs, and subordinate
loan participations.
In 1994, the department
managed over $1.5 billion in
conservatorship cash prior to
the resolution of the institu­
tions, and managed $1.4 billion
in receivership cash and $285
million in asset claims cash.
The returns for receivership

lion of the assets.
From inception of the secu­
ritization program in June 1991
to yearend 1994, nearly $45

cash management in 1994
totaled more than $61 million.
During the year, the high-

loans, non-performing com­

billion in performing and non­
performing loans were securi­

yield staff negotiated an offer of
the RTC's highly illiquid 20 per­
cent share of General Oriental
Investments Limited (GOIL), a

grams to securitize financial
assets taken over by the RTC,
including performing mortgage
mercial mortgage loans, and

tized, including single-family,

other loans.
In 1994, the department

multifamily, and commercial
mortgages, and commercial

used the N-Series and S-Series

and consumer loans.

tU
I I I I I I t [ I f I I I I I


JI II I

closed-end fund solely con­
trolled by international

H I I 11 I I I I I

T11J I

( I I

f

11 I 1 1 1 1

financier Sir James Goldsmith.
The RTC's holdings were inherit­
ed from the former Lincoln
Savings and Loan Association,
F.A., Irvine, California. The
department negotiated total pro­
ceeds of $272 million for the
RTC's 28.6 million shares, as
well as additional protection on
any future sale of the shares at a
higher price and on future distri­
butions. This price represented
an attractive 15 percent discount
on GOIL's net asset value as
compared to the normal 20 to
30 percent discounts demanded
on similar closed-end funds.
The department also mar­
keted 12 SPFSs during the year,
generating more than $600
million in securities sales.
Among the transactions
completed were Rockland
Financing Corporation, Santa
Barbara Funding One,
Freedom Capital, Morsemere
CMO One, and FFSBT
Financial Corporation.

Department of
Asset Marketing
The Department of Asset
Marketing coordinates all
marketing programs supporting
the sale of RTC assets. The
department consists of the

office disposes of illiquid assets,
such as real estate, non-perform­
ing loans, and subsidiaries, and
conducts portfolio and struc­
tured sales (sales of pools of
assets chosen by the RTC and a
purchaser) of more than $100
million in assets in a single
transaction. The latter offerings
are composed primarily of com­
mercial real estate and non-per­
forming mortgages.
The office develops mar­
keting-related data, develops
and implements new sales
strategies to dispose of assets,

In 1994, over 100,000
assets totaling $7.2 billion
(book value) were sold through
the Judgments, Deficiencies,
and Chargeoffs GDC) initiative,
a partnership arrangement
designed to sell volumes of
judgments, deficiencies, and
chargeoffs. The JDC initiative
was envisioned to create up to
30 partnerships. Since the ini­
tiative was launched, 30 part­
nerships have been created.
In addition, approximately
1,308 subsidiaries and joint
ventures were either sold or

and conducts nationwide auc­
tions of real estate and loans.
In 1994, the office was
involved in several notable

dissolved during the year.

sales transactions. The RTC
completed the sale of the sec­

The Office of the Small Investor
Program (SIP), created in April
1993, is responsible for ensur­

ond National Land Fund, a
$370 million partnership struc­
ture in which the RTC retains a
limited partnership interest and
shares in the appreciation of
land assets.
The office also participated
with the six field offices in con­
ducting three national non-per­
forming loan auctions in Kansas
City, Missouri. In the April 1994
auction, approximately 5,809
loans with a total book value of

Office of the Small
Investor Program

ing that RTC assets are offered
for sale individually and in
pools to investors with moder­
ate capital levels. Under the
program, all loan and real estate
assets not previously committed
to scheduled events are actively
marketed for a minimum of 120
days. Individual real estate
assets are offered through local­
ized auctions and small loan
pool offerings, as well as

approximately $318 million
were sold, yielding a $191 mil­
lion recovery. In the September
1994 auction, 8,814 loans with

through the real estate broker­

and National Marketing.

a total balance of $399 million
were sold, for a total recovery

were lowered.
In 1994, the office held

Office of Financial
Instruments

of $223 million. In the
December 1994 auction,

The Office of Financial

approximately 9,786 loans with

128 buyer-awareness seminars
to help local and regional
investors learn about SIP; more

Instruments plans, coordinates
with the field offices, and exe­
cutes major asset sales. The

a total balance of approximately
$370 million were sold, yield­
ing a $229 million recovery.

Offices of Financial Instru­
ments, Small Investor Program,

 1 1 1 I R I P • IT
I 9 4 11


age community. To increase
small investor participation, bid­
der entry deposits for loan sales

than 15,000 investors partici­
pated in the seminars. From the
program's inception through

1 1 j eI

1 111

( [

i (■ i

h i

S i n s

A S S E T M A N A G E M E N T avii S A L E S

yearend 1994, approximately
31,000 investors attended semi­
nars sponsored by the program.
Working with the Office of
National Marketing, the office
registered 3,729 additional
investors in the small investor
database during the year. O f
this total, 1,871 investors indi­
cated minority status, and
1,135 investors identified
themselves as minority- or
women-owned firms. In 1994,
the Small Investor Program
Hotline provided information
to 16,000 callers; 9,628
brochure packages and 18,563
property listings were provided
to callers.
SIP played a significant role
in the RTC's three national loan
auctions held in Kansas City,
Missouri, during the year. Each
auction featured loan packages
reduced in size and concentrat­
ed geographically, giving
prospective buyers the opportu­
nity to bid on assets in their
local areas.
In 1994, SIP assumed
responsibility for publishing
The RTC Investor, the RTC's
national sales information
newsletter. The RTC Investor
includes articles about invest­
ment opportunities for investors
of all capital sizes, and reports
on RTC policy changes affect­
ing the investment community.
The newsletter's circulation is

provides asset sales support
through advertising, industry
relations, marketing systems,
and customer services and tele­
marketing. More than one mil­
lion brochures supporting RTC
sales programs, including the

investment opportunities. The
staff participated in 24 national
and regional trade shows, pro­
viding assistance to the

Small Investor Program and the
Affordable Housing Disposition
Program, were produced and
disseminated during the year.

Department of Affordable
Housing at five.

The office focused on
increasing its direct mail cam­
paigns to support RTC sales ini­
tiatives. Direct mail efforts
included 341,000 pieces of
mail announcing the three 1994
national loan auctions. From
inception of the direct mail pro­
gram in 1992 through yearend

Division of Minority and
Women's Programs at 10, and
providing assistance to the

The office also continued
to provide the public with
information about RTC offerings
through the RTC's National 1800 Telemarketing program,
created in 1991. From the pro­
gram's inception through
yearend 1994, over 2.5 million
calls were answered on the
Affordable Housing Hotline,
Broker Hotline, Small Investor

1994, the office produced and
mailed 1.2 million direct mail
pieces in support of 358 sales

Program Hotline, and
Information Center Line.

initiatives. The number of
investors included in the RTC's
investor database also increased
in 1994 to a total of 22,000.

Department of
Affordable Housing

The office coordinated the
marketing campaigns for the
RTC's three 1994 national loan
auctions, which resulted in the

Housing identifies real estate
assets suitable for sale to low- to
moderate-income families and

The Department of Affordable

sale of 915 loan packages com­

individuals, as well as non-profit
housing organizations, through

prised of 25,000 loans for $643
million. The office's outreach

its Affordable Housing
Disposition Program.

programs and advertising helped
attract new participants to the
auctions; half of the auctions'
400 participants were new to
the RTC auction series, and onethird of the winning bidders

The Affordable Housing
Disposition Program offers
income-eligible purchasers and
non-profit housing organiza­
tions an exclusive 97-day mar­
keting period and option to
purchase these properties. Non­

approximately 18,000.

were also new participants.
The staff conducted and

Office of National
Marketing

participated in numerous out­

include consumer and public

reach activities during the year
to inform potential bidders,
including minorities, women,

interest groups, as well as state
and local housing agencies.

The Office of National
Marketing coordinates market­
ing programs nationwide and

I J
$ 11 l i l i d l i n


III

S lid

and small investors, of RTC

profit housing organizations

Under the Affordable
Housing Disposition Multi-fam-

II IS 1111111 111SI ( 11 1 • 11 1111

PROPERTIES SOLD TO STATE AND LOCAL HOUSING AUTHORITIES
Housing Authority
Cm M T m m
Council of Governments
Belton, IX

City of San Anerio Housing
Authority

Property
Lookout Ridge Apts.
Harker Heights, TX

Sales Pric
$1,432,028

Housing Authority_______ Property_______Sales Price
Georgia Housing
Finance Authority

Carriage Crossing Apts.
Flowering Branch, GA

Cityaf BakarsMd
Bakersfield, CA

CRyofGahnston
M----8
--VMSMSMimonqr

489,108

262,768

Meadow Glenn Apts.
Austin, IX

242,917

Summerset 1Apts.
Oitd^e, CA

724,514

Housing Authority
of Bexar County

Villa De Oro Apts.
Bakersfield, CA

Austin, IX

234,088

Barrington Apts.
4401 Southwest Blvd.
San Angelo, TX

City of Austin

250,000

San Antonio, TX

Port Holiday Apts.
Galveston, IX

1,391,350

Foundren Green Apts.
Houston, TX

Housing Authority
City of Charleston

Housing Authority
of Odessa

2,821,175

Clayton Pointe Apts.
Grand Prairie, TX

2,720,000

Ashley Oaks Apts.
Charleston, SC

684,000

Bear Springs Apts.
San Antonio, TX

2,558,900

High Plains Apts.
Odessa, IX

1,122,441

Wellington Park Apts.
Lewisville, TX

3,709,265

Odessa, IX
132,184

LmrisviHu Housing
Finance Corporation
Lewisville, TX

Jnh
UtJI--C in i
884,358

Willow Creek Apts.
Houston, TX

3,200,000

Windwood Club Apts.
Houston, TX
Courtyard Apts.
Lubbock, TX

65,000

Ridgecrest Apts.
Lubbock, TX

30,000

1,750,000

Barrington Apts.
Canyon, TX

261,172
201,161

BeH Lakes Apts.
Phoenix, AZ

14,011,000

Paradise Lakes Apts.
Phoenix, AZ

City of Phoenix Industrial
Development Authority

850,000

Barrington Apts.
Pampa,TX

1,288,348

Panhandle Community Services
Amarillo, TX

RanchlandApts.
Midland, TX
The Lakes Apts.
Midland, TX

Midland, IX

2,360,000

University Pine Duplexes
Lubbock, TX

3,963,582

Charleston, SC

Stream Side Apts.
Houston, IX

u iy or luoo oc x noosing
Authority

Grand Prairie
Housing Finance Corp.

MlulMO county
Southwest Village Apts.
Stafford, TX

Lubbock, IX

Hunters Grove Apts.
Austell, GA

Grand Prairie, TX

Houston, TX

City of Lubbock

72,386

Lake Vista Apts. I& II
Warner Robins, GA

Galveston, IX

City of Houston Housing
Authority

$ 6,585,576

Atlanta, GA
Barrington Apts.
3902 Shemood Way
San Angelo, TX
Barrington Apts.
4421 Knickerbocker Rd.
San Angelo, IX

San Angelo, IX

Atlanta Advantages Apts.
College Park, GA

47,032,058

Phoenix, AZ

299,755

Pima County Industrial
Development Authority

21st Place
Phoenix, AZ

95,979

Tucson, AZ

Lubbock, TX
Plainview, TX

City of San Angelo
San Angelo, TX

City of San Antonio
Housing Authority

Barrington Apts.
Plairtview, IX

212,304

Heatheridge Apts.
Phoenix, AZ

3,011,868

Barrington Apts. (South)
San Angelo, TX

489,108

Pine Shadows Apts.
Temple, AZ

3,076,161

Barrington Apts. (Southwest)
San Angelo, TX

Cityof Plainview

262,678

Sunny Palms
Scottsdale, AZ

Green Oaks Apts.
San Antonio, TX
Kelly Creek Apts.
San Antonio, TX

1,350,000

1130 Logan Street
Denver, CO
Casa Castano Apts.
Colorado Springs, CO

539,402

The Cove Apts.
Corpus Christi, TX

Sandusky Metropolitan
Housing Authority

559,468

Southeast Texas
Housing Finance Corporation

Tampa Housing Authority
Wellington Place Apts.
Dallas, TX

1,772,105

Deerfield Apts
Dallas, TX

2,955,816

Dallas, TX

Dallas Multifamily
Housing Acquisition Corp.

943,700

Greenlea II Apts.
Richmond, TX

10,000

Tampa, FL

180,651
4,649,282

Meridian Apts.
Tampa, FL
River Place Apts.
Tampa, FL

Travis County
Housing Authority

940,108

Sweetwater Apts.
Austin, TX

1,717,115

Austin, TX
Dallas North Apts.
Dallas, TX

200,000

Dallas, TX

Fort Worth
Housing Authority

Hicks - Han Apts.
Fremont, OH

Liberty Village Apts.
Liberty, TX

Dallas, TX

DaHas Multifamily
Acquisition Corp.

315,000

Pasadena, TX

Corpus Christ), TX

Dallas Housing
Authority

Pecan Manor Apts.
San Antonio, TX

Fremont, OH

Colorado Springs, CO

Corpus Christi Housing
Authority

118,124

San Antonio, TX
40,000

Denver, CO

Colorado Springs
Housing Authority

San Antonio
Housing Authority

270,937

Tucson Navajo Apts.
Tucson, AZ

490,000

Park Village Apts.
San Antonio, TX

90,579

Thunderbird Villas Apts.
Phoenix, AZ

2,758,000

San Antonio, TX

Colorado Housing
Finance Authority

In 19 9 4 , the R T C
sold the following
properties to slate
and local housing
authorities through
its Affordable
Housing Disposition
Program :

Village of Matteson
Municipal Corporation

Clinkscale Apts.
Matteson, IL

102,133

Cimmaron Apts.
Waco, IX

683,545

Waco.TX

Winter Park
Housing Authority

Winter Park Oaks Apts.
Winter Park, FL

774,482

Matteson, IL
CandletreeApts.
Fort Worth, TX

Fort Worth, TX

D M
11
 1 1 1 1 K i r i i i


1,006,737

Waco Housing Authority

Winter Park, FL

IJ111

1 1 11 ( i I ( IT

III

S11EI

m

AS SE T MANAGEMENT

\vn S A L E S

ily Program, multiple-unit
dwellings must initially be mar­
keted exclusively to lowincome housing providers who
agree to reserve at least 35 per­
cent (15 percent for lowincome individuals and
families, and 20 percent for
very low-income individuals
and families) of the units at
restricted rent levels for the
remaining useful life of the
property (40 to 50 years).
In 1994, 1,751 single-family properties were sold through
the affordable housing program
for a total of $48 million. From
the program's inception in
1990 to yearend 1994, 22,064
single-family properties were
sold for a total of $605 million.
These properties were offered
primarily through auctions and
sealed bids.
The RTC provided seller
financing for 659 single-family
homes sold under the afford­
able housing program in 1994.
From the program's inception
in early 1991 through yearend
1994, the RTC provided seller
financing for 5,159 single-fami­
ly homes, or nearly 23 percent
of the total sold. Purchasers of
single-family homes utilized
$58 million of RTC-sponsored
mortgage revenue bonds.
The average income of pur­
chasers of single-family homes
from the program's inception to

showed 39 percent of the buy­
ers were minorities and 75 per­
cent were first-time buyers.
In 1994, 137 multi-family
affordable housing properties
were sold for a total of $246
million; the RTC provided seller
financing for 73 of the proper­
ties. From the program's incep­
tion through 1994, the RTC sold
708 multi-family affordable
housing properties containing
75,614 units for a total of $857
million; 33,489 of those units
were solely for low- and verylow income tenants. Since the
program's inception, the RTC
has provided seller financing for
39 percent, or 275 of the multi­
family properties sold.
The RTC may donate prop­
erties with no reasonable
recovery value to non-profit
organizations and public agen­
cies that agree to make these
properties available for lowincome housing and other pub­
lic uses. From inception of the
affordable housing program
through yearend 1994, 712 sin­
gle-family dwellings and 61
multi-family properties with no
reasonable recovery value were
made available for conveyance
to non-profit organizations and
public agencies. O f those, 103
single-family properties and 13
multi-family properties were
conveyed in 1994.

yearend 1994 was $22,655, or
61 percent of national median
income; the average purchase
price was $27,699. A survey of
buyers at 41 nationwide afford­
able housing auctions conduct­
ed from 1991 through 1994

{ Q I I $I I I AI I ( [ I I I I I I I SI I n




ft i j 1 1 1 1 1 1 1

T u n

( 11 n 1 1 1 1 1 1




RESOLUTIONS

r e s o l u t io n s

he Division of Resolutions mar­

f

kets and executes the most costeffective resolutions for insolvent
thrifts placed in the RTC's con­
servatorship program or the

Accelerated Resolutions
Program (ARP) by the Office of
Thrift Supervision (OTS). The
division is composed of the
Offices of Major Resolutions
and Field Resolutions.
During 1994, the RTC
resolved 64 thrifts (compared to
27 in 1993; 69 in 1992; 232 in
1991; 315 in 1990; and 37 in
1989), leaving only one institu­
tion in conservatorship at
yearend.
At the date of resolution,
the total cost of the 64 resolu­
tions completed in 1994 was
estimated to be $6.3 billion.
(The cost is estimated until all
assets associated with the insti­
tutions are sold.) The resolu­
tions resulted in savings of $1.1
billion over the cost of paying

off the insured deposits.
Gross RTC funding for the
64 institutions totaled $17.2
billion, including conservator­
ship advances of $4.2 billion,
for a net RTC funding cost of
$16.1 billion. In 39 resolutions,
all of the deposits were trans­
ferred to the acquirers. In 22
resolutions, only the insured
deposits were transferred to the
acquirers. Three resolutions
involved paying off the institu­
tions' insured deposits.

er conservatorships, generally
institutions with more than $500
million in liabilities at time of
conservatorship. During 1994,
the office completed 19 resolu­
tions (compared to 6 in 1993;
16 in 1992; 45 in 1991; 39 in
1990; and 4 in 1989).
The 19 resolved thrifts had
deposits totaling $12.5 billion
(compared to $7 billion in
1993; $17 billion in 1992; $56
billion in 1991; $60 billion in
1990; and $8 billion in 1989).
The $910 million in premiums
paid to the RTC in the 19 reso­
lutions represented about 9 per­
cent of the $10 billion in core
deposits (non-brokered deposits
with balances of $80,000 or
less) that were sold.
The premiums paid by
acquirers ranged from 4 per­
cent to almost 17 percent of
core deposits. The average pre­
mium was 9.1 percent of core
deposits, a substantially higher
figure than in previous years.
All but 7 of the resolutions
involved multiple purchasers,
with 12 financial institutions
acquiring one or more branch­
es or the deposits thereof. None

One thrift, Cherokee
Valley, FSA, Cleveland,
Tennessee, was resolved in
1994 at no cost to the RTC.
Cherokee Valley's seven bank­
ing offices were acquired by
two financial institutions locat­
ed in Tennessee.
Three of the 43 resolutions
involved the payoff of $48.5
million in insured deposits. In
14 of the 43 resolutions, the
institutions were purchased by
two or more acquirers.
The 43 resolutions generat­
ed $142 million in premiums,
or approximately 7 percent of
total core deposits at time of
resolution, representing a 30
percent increase over premi­
ums received in 1993 field res­
olutions, which averaged about
5.3 percent of core deposits.

Accelerated Resolutions
Program
The Accelerated Resolutions
Program is a joint effort between
the RTC and the OTS, estab­
lished on the premise that early
intervention in a failing thrift

of the thrifts was resolved as a

could create significant taxpayer
savings. Thrifts selected for ARP
are those the OTS has deter­

total payoff; however, three res­
olutions involved paying off

mined are in danger of failing
and whose financial condition

wholesale deposits.

would cause them to be placed
in conservatorship within one

Office of Field
Resolutions

year. Unlike other thrifts
resolved by the RTC, those
resolved through ARP are not

During 1994, the Office of Field

placed in conservatorship prior

Office of Major
Resolutions

Resolutions resolved 43 thrifts
(compared to 20 in 1993; 44 in

to resolution.
An institution agreeing to

1992; 166 in 1991; 272 in

participate in the program is

The Office of Major Resolutions
managed the disposition of larg­

1990; and 33 in 1989), with
deposits totaling $2 billion.

marketed by the RTC and the
OTS, with assistance from the

[ Q
 K E $ I I I I I I I S


R ES• 1I T I • I

I tI I S I

( I I r I K I I I I I

li I S II I II 11II \s

thrift's own management.
Once a buyer for an ARP thrift
is identified, the OTS closes
the thrift, places it in receiver­
ship, and immediately trans­
fers it to the acquirer. This
process is designed to avoid
the deterioration in franchise
value associated with the con­
servatorship process.
Two ARP resolutions were
completed in 1994 (compared

to 1 in 1993; 9 in 1992; 21 in
1991; and 4 in 1990). In 1994,
Encino Savings Bank, FSB,
Encino, California, with
deposits totaling approximately
$89 million, was acquired by
American Savings Bank, F.A.,
Stockton, California, which
paid a $1.4 million franchise
premium, representing 2.4 per­
cent of core deposits. The sec­
ond ARP resolution involved

Cornerstone Bank, Federal
Savings Bank, Mission Viejo,
California, with deposits
totaling $38.4 million.
Cornerstone was acquired
by California Federal Bank,
A Federal Savings Bank,
Los Angeles, California.
M inority Participation
The RTC is committed to the
goal of providing maximum

1994 RTC CONSERVATORSHIP AND RESOLUTION ACTIVITY

*This figure includes 2 associations never placed into conservatorship.

I t 4 A1
Digitized for fFRASER 1 1 1 1 R e p o r t


B / Beginning Conservatorships
at 12/31/93
63
R / Cases Resolved in 1994
64

Re s o i u t i o i s |

It t S(I 1 11T I (I VS
'

-

1994 RTC CONSERVATORSHIP AND RESOLUTION ACTIVITY

i
3

Balance

Conservatorships
State

* Alabama
■ California
.] Connecticut
j Florida
j Georgia
j Illinois
j Iowa
Kansas
Louisiana
: Maine
; Maryland
i Massachusetts
Mississippi
New Hampshire
New Jersey
j New York
Ohio
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Virginia

J

(dainilio)
or ms
ls n

Total (23)

Beginning

Deposits*

,2
1 $ 112
10
8 1,03
1
23
2
,35
1
0 30
23
3
2
42
3
2
72
1
1
,74
2 48
4 26
,53
1
7
6
4 23
,78
25
5
2
1
27
4
12
9
1
,81
7 45
1 103
,7
1 29
,32
1 123
,7
45
1
3
1 169
,9
2
28
3
14
2
1
6
82
5

63

$40,803

Added

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

0

Deposits*

$
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

$0

Resolved

Deposits*

1 $ 112
,2
8 1,03
10
1
23
2
,35
1
0 30
2
23
3
2
42
3
1
72
1
,74
2 48
4 26
,53
1
7
6
4 23
,78
2
25
5
27
4
1
1
12
9
6 22
,29
1
103
,7
1
29
,32
1
123
,7
3
45
1
1
169
,9
2
28
3
14
2
1
82
5
6

62t

$38,181

Ending

Deposits*

0 $ 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1 22
,61
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

1

$2,621

'D ep osits at quarter prior to date of conservatorship.
tD o e s not include 2 thrifts never placed in conservatorship that were
resolved through the Accelerated Resolutions Program .
|

□

N o te : Detail m ay not add to totals due to rounding.

It [
s • 11 r f o i s


II i s 1 1 1 1 1 1 1

In n

( 11 m n 1111

RESOLUTIONS

opportunities to minority
investors seeking to purchase
failed thrifts from the RTC. To
increase minority participation
in the resolution process, the
RTC has implemented provi­
sions under its Minority
Preference Resolutions Program
giving certain preferences to
minority bidders. These provi­
sions were mandated by
Congress in FIRREA; the RTC
Refinancing, Restructuring, and
Improvement Act of 1991; and
the RTC Completion Act, enact­
ed in December 1993, which
amended the Federal Home
Loan Bank Act.
The Minority Preference
Resolutions Program's incen­
tives include interim capital
assistance; options to purchase
performing assets from the
RTC's inventory; and rent-free
leasing options on office space
for minority acquirers of RTCowned thrift branches in pre­
dominantly minority
neighborhoods (PMN). Also
offered under the program are
bidding preferences for minori­
ties interested in purchasing like-

■ 1994 RESOLUTION COST AND SAVINGS BY STATE
j§

(dollars in millions)

State

Resolved
Institutions

Alabama
California*
Connecticut
Florida
Georgia
Illinois
Iowa
Kansas
Louisiana
Maine
Maryland
Massachusetts
Mississippi
New Hampshire
New Jersey
New York
Ohio
Oregon
Pennsylvania
Rhode Island
South Carolina
Tennessee
Virginia

Total (23)

Resolution
Costt
$

Estimated
Savings*

64

156
1,626
11
396
39
80
81
387
1,410
14
749
41
36
28
309
52
104
387
48
141
24
0
209

$ 30
184
13
133
7
26
23
24
36
0
51
5
11
7
87
62
132
46
13
162
5
6
21

$6,329

1
10
1
10
2
2
1
2
4
1
4
2
1
1
6
1
1
1
3
1
2
1
6

$1,085

minority thrifts, thrifts for which
no acceptable bids are received,
and thrifts or branches in PMNs.

’ Includes 2 thrifts never placed in conservatorship that were
resolved under the Accelerated Resolutions Program .

The Completion Act expanded
opportunities for minority acquir­

^Resolution cost estimated at tim e of resolution.

ers of thrifts and branches in
PMNs, designed, in part, to help
preserve banking services in

*T h is am ount represents the difference between the estimated cost of the actual
resolution method used by the R T C , and the estimated cost that would have been
incurred had the R T C paid off the insured deposits.
No te : Detail m ay not add to totals due to rounding.

minority neighborhoods served
by thrifts resolved by the RTC.
During 1994, Pan

acquired by a like-minority-

im capital assistance and

American Federal Savings
Bank, San Mateo, California, a

owned de novo thrift, Pan

options to purchase additional
performing assets from the

minority-owned thrift with

Mateo, California. Pan
American Bank received inter­

$120.5 million in deposits, was

Digitized for > H A1 1 1 1 1 R e m i t
FRASER


American Bank, FSB, San

RTC's portfolio. The rent-free
lease option was made avail-

R [ $ 11111 o i $

RESOLUTIONS

 1 1 1 1 1 1 1 $
R n


able to Pan American Bank on
select branches.
Two other historically
minority-owned institutions—
Delta Federal Savings Bank,
Westminster, California, and Life
Federal Savings Bank, Baton
Rouge, Louisiana—were pur­
chased by like-minority-owned
acquirers under the Minority
Preference Resolutions Program.
Dryades Savings and Loan
Association, F.A., New Orleans,
Louisiana, a previously majori­
ty-owned thrift with $71.5 mil­
lion in deposits, for which no
acceptable bids were received,
was acquired by Dryades
Savings Bank, F.S.B., New

owned institutions, banking ser­
vices were expected to contin­
ue in these neighborhoods. The
RTC encourages non-minorityowned institutions that acquire
institutions from the RTC to par­
ticipate in its post-resolution
program. Under this program,
the RTC makes available the
same minority preference bene­
fits that would have been avail­
able to the minority acquirer
had it purchased the branch or
branches directly from the RTC.
The post-resolution transactions
must occur within six months
of the original resolution.

Orleans, Louisiana, a de novo
minority-owned savings bank.
The new thrift received interim
capital assistance and an option
to purchase performing loans
from the RTC's portfolio.
At yearend 1994, the RTC
had resolved all but one of the
21 thrifts with branches locat­
ed in PMNs; the 20 thrifts had
a total of 57 branches in
PMNs. Minorities acquired
22 branches, 39 percent of the
57 offices located in minority
neighborhoods.
Hamilton Bank N.A.,
Miami, Florida, a minorityowned institution, purchased
two branch offices of Carteret
Federal Savings Bank, headquar­
tered in Newark, New Jersey,
one of which was located in a
PMN. The RTC made available
to acquirers over $20 million in
interim capital assistance.
Although the remaining 35
branch offices located in PMNs
were acquired by non-minority-

R e s 111 n 11 T i m

(

h

pi

1 1 T1 1 1




MINORITY m i WOMEN'S PROGRAMS

M I N O R I T Y HI I W O M E N ' S P R O G R A M S

f

Q
AI
I 0 K I T T I I I


he Division of Minority and
Women's Programs (MWP)
develops and manages policy
for the participation of minori­
ties and women in all RTC
activities, including contracting,
the purchase of assets and failed
thrifts, and securitization. It also

provides leadership and guid­
ance to the Corporation in
equal employment opportunity
programs. The division is com­
prised of the Departments of

Minority- and Women-Owned
Business (MWOB); Legal
Programs; Equal Employment
Opportunity (EEO) and
Affirmative Action; and
Policy, Evaluation, and

Department of
Minority- and
Women-Owned
Business
The Department of Minorityand Women-Owned Business
(MWOB) ensures that firms
owned and operated by minori­
ties and women have the maxi­

its commitment to increase the
participation of minorities and
women in the RTC's contracting

Field Management.
In 1994, the division
played an important role in
interpreting and implementing

or branch offices located in
predominantly minority neigh­

provisions of the 1993 RTC
Completion Act aimed at
expanding opportunities for

borhoods. MWOB staff orga­
nized a one-day seminar in
May that offered information

minorities and women. The
division also coordinated with
the Office of Contracts and the
Division of Legal Services to

about the Minority Preference
Resolutions Program and pro­
vided a forum for investors to
discuss potential joint ventures.
Special sessions were also con­
ducted at each of the RTC bid­
ders' conferences for these
institutions. In addition to these
efforts, the department targeted

To inform minorities and
women of RTC contracting and
asset sales opportunities, the
MWP staff expanded its
Minority and Women Outreach
Program in 1994. A number of
events were organized to
explain the procedures for doing
business with the RTC or pur­
chasing assets from its inventory.
The division also used advertis­
ing, publications, and direct
mailings to reach out to minority
and women audiences.

W llll’S h l i l i n

the department strengthened
the certification process to
ensure that the national
MWOB database contained
only eligible MWOB firms. The
staff conducted 504 on-site
verification visits to confirm the
eligibility of firms claiming

mum opportunities available to
do business with the RTC. During
1994, the department continued

and sales opportunities.
A primary focus for depart­
ment staff in 1994 was inform­
ing minority investors of RTC
opportunities to purchase thrifts

expand its involvement in
each stage of the RTC con­
tracting process.

interested in purchasing RTC
affordable housing or contract­
ing with the Department of
Affordable Housing.
To prevent fraud and
misrepresentation in the
MWOB certification program,

mailings to minority and
women audiences.
Staff also worked with the
Department of Affordable
Housing to prepare the direc­
tive "Outreach to Targeted

MWOB status. The RTC
Certification Advisory
Committee also met regularly
to ensure that the process was
working properly. By yearend,
the MWOB database included
3,035 certified MWOBs.
The MWOB staff also par­
ticipated in each phase of the
RTC's contracting process,
including pre-solicitation, solic­
itation, evaluation, selection,
contract administration, and
post-award activity. The staff's
efforts resulted in the RTC
exceeding its annual goal of
awarding 30 percent of all con­
tracts and fees to minority- and
women-owned businesses.
In 1994, 8,725 contracts
were awarded to MWOB firms,
or 48.6 percent of all RTC con­
tracts awarded during the year.
Estimated contracting fees to
MWOB firms reached $268.8
million, or 48.8 percent of the

Buyer Groups in the Affordable

estimated fees paid for all RTC

Housing Disposition Program,"
issued December 8, 1994. This

contracts awarded in 1994.
This total represents an increase
of more than $58 million in
fees, or 28 percent, over the

directive contained provisions
calling for the expansion of out­
reach to minorities and women

k

im

RTC's 1993 estimated contract-

1

i t 11 111 $ t ( 11

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MI NORI TY

ing fees of $210 million paid to
MWOB firms nationwide.
To comply with the RTC
Completion Act requirements,
the staff reviewed 83 Task
Order Agreements (TOAs) to
ensure maximum participation
by MWOBs. The staff found
that 55 agreements achieved
over 30 percent MWOB partici­
pation, either in dollars award­
ed or number of task orders
issued; 28 agreements achieved
100 percent MWOB participa­
tion. Following the review, 31
TOAs were amended to adhere

its participation in national and
local seminars and workshops,
resulted in outreach to thou­
sands of attorneys and other
legal professionals.
To further ensure that the
RTC increased its use of outside
counsel, the MWP continued to
serve as a voting member of the
Legal Services Committee. The
committee, which operates
both at headquarters and in the
field, selects law firms to han­
dle RTC work. The department

add

WOME N S P R O G R A M S

cies and issues associated with
downsizing the RTC and the
pending transition to the FDIC.
While affirmative action goals
were established for 1994, the
focus was on internal hiring
and promotion rather than
external hiring.
The department, in con­
junction with the Office of
Human Resources
Management, hired a private
contractor to conduct mandato­
ry EEO training of all perma­
nent RTC managers and

subcontracting requirement.

also maintained updated inter­
nal desk reference guides to
include listings of MWOLFs by
locality and specialty.
In 1994, the RTC made
4,281 referrals to MWOLFs for
legal work with the RTC, or

sessions were designed to raise
sensitivity to EEO matters.
Additional sessions were added

Department of
Legal Programs

42.6 percent of all referrals to
outside counsel, and paid them
fees totaling $59.3 million, or
25.8 percent of all fees paid to

to accommodate employee
interest. EEO counselors at
headquarters and in the field
also received training to

The Department of Legal
Programs establishes and imple­

outside counsel during the year.

increase their effectiveness in
resolving EEO matters.

ments programs designed to
ensure the inclusion of minorityand women-owned law firms

Department of
Equal Employment
Opportunity and
Affirmative Action

To recognize and promote
understanding of diverse cul­
tures, the department organized

The Department of Equal
Employment Opportunity and
Affirmative Action (EEO/AA)

Asian-Pacific American

department conducted 11

provides leadership and guid­

workshops in 1994 on the Joint
Referrals and Representation
Program, an initiative designed

ance to the Corporation in all

Luther King's Birthday, Black
History Month, and American
Indian Heritage Month.

to the Completion Act require­
ment that all task orders
exceeding the $500,000 thresh­
old comply with the MWOB

(MWOLFs) and minority and
women attorneys in nonMWOLFs in legal contracting
with the RTC.
In conjunction with the
Division of Legal Services, the

to expand opportunities for
MWOLFs and minority and
women attorneys to work as
outside counsel on the RTC's
larger, more complex cases.
The department's sponsorship
of these events, combined with

I FRASER
Digitized forM I 1 1 1 1 1 1 R e m i t


areas of the equal employment
opportunity program, and
processes administrative com­
plaints of employment discrimi­
nation filed by employees and
applicants for employment with
the Corporation.
During 1994, the depart­
ment began to address the poli­

supervisors. Training was also
offered on a voluntary basis to
non-supervisory personnel. The

events during the year to
observe Women's History
Month, Women's Equality Day,
Heritage Month, Hispanic
Heritage Month, Dr. Martin

The department continued
to process formal and informal
complaints of employment dis­
crimination, with an increased
emphasis on resolving com­
plaints at the earliest possible
stage of the administrative
process. An initiative was

i

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*

MI NORI TY

avii

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WOME N' S P R O G R A M S

launched to inform managers of
discrimination complaint activi­
ty in their respective areas.
Communication between
EEO/AA managers and man­
agers throughout the RTC was
encouraged to resolve potential
EEO problems before they esca­
lated to the level of formal or
informal complaints. This dia­
logue frequently yielded posi­
tive results.

Department of
Policy, Evaluation,
and Field
Management
The Department of Policy,
Evaluation, and Field
Management develops nation­
wide program standards, poli­
cies, and procedures for the
RTC's minority and women's
programs, ensuring that they are
in compliance with all applica­
ble laws, including FIRREA; the

ing mandatory subcontracting
provisions; requirements to
establish guidelines to effect a
more reasonable distribution of
contract awards among minori­
ty and women subgroups; and
preferences for minority
investors to acquire thrift insti­
tutions in predominantly minor­
ity neighborhoods.
A draft final rule, based on
the RTC's 1992 interim final
rule "Minority- and WomenOwned Business and Law Firm
Program" (12 CFR, Part 1617),
was revised in 1994 to incorpo­
rate the provisions of the RTC
Completion Act. These provi­
sions apply to all future con­
tracts, including legal contracts.
The department worked
with the Division of Resolutions
to implement the Completion
Act provision requiring prefer­
ences for minority investors
seeking to acquire thrifts in pre­
dominantly minority neighbor­

and Improvement Act of 1991;

examinations of field office
activities directed at achieving
a reasonably even distribution
of contract awards among
MWOB subgroups. The depart­
ment reviewed contracting data
and the levels of contracting for
each MWOB subgroup within
each office. Program
Compliance Reviews, based on
newly formalized criteria, were
also completed for each of the
six field offices during 1994.
Throughout the year, the
department also closely
tracked, analyzed, and evaluat­
ed data used in reports to the
Congress on the implementa­
tion of the RTC's MWP policies,
emphasizing progress in
addressing requirements of the
RTC Completion Act.

nantly Minority Neighborhood"
(12 CFR, Part 1630). The RTC

standardized implementation of

RTC Completion Act mandate.
The department conducted

hoods. The procedures were
published in the Federal
Register in July 1994 as a final
rule, "Definition of Predomi­

and the RTC Completion Act of
1993. The department ensures

Oversight, and Evaluation to
ensure consistent corporatewide implementation of the

also issued a directive outlining
the bidding procedures, defini­
tions, terms, and conditions of

RTC Funding Act of 1991; the
RTC Refinancing, Restructuring,

minority and women's pro­
grams at headquarters and in
the field offices.
In 1994, the department
played a key role in the inter­
pretation and implementation
of provisions contained in the
RTC Completion Act. The act
contained several new provi­
sions designed to increase
opportunities for minorities and
women interested in doing
business with the RTC, includ­

V l l l l ’l

M l d l l i

these acquisitions.
The department was also
instrumental in setting guide­
lines for the participation of
MWOBs as mandatory subcon­
tractors in contract awards of
$500,000 or more. The devel­
opment of these guidelines
resulted in a policy statement
jointly prepared by MWP and
the Division of Contracts,

Hn1111111 T i i i t ( 11 f 1111111




CHIEF FINANCIAL OFFICER

CHIEF F I NANCI A L OFFI CER

he Division of the Chief
Financial Officer (CFO)
oversees the RTC's financial
management activities, includ­
ing field and corporate
accounting, the RTC budget,
cash-management activities,
financial reporting, internal
controls, audit follow-up,
and contract appeals.

T

In 1994, the office
enhanced the Corporation's
budget operations by develop­
ing and revising budget policy
and procedures, improving
resource-reporting capabilities,
and establishing a periodic per­
formance report for the RTC
Business Plan.
Substantial staff support was

employee compensation, 20
percent; and receivership real
estate expenses, 20 percent. By
yearend, the number of on­
board RTC staff, totaling 5,430
employees, had decreased by
more than 1,000 from the begin­
ning of the year, representing a
15 percent reduction.

1993 financial statements from
the General Accounting Office
for the third consecutive year;
implementation of a transition

devoted to planning for the
effects of RTC sunset on budget
policy and procedures, the tran­
sition of RTC organizations to
the FDIC at or before sunset,
and post-sunset activities within
the FDIC resulting from prior

plan designed to ensure the
orderly transfer of CFO functions
to the FDIC and avoid disruption

RTC actions.
The newly developed
Budget Documentation

of the financial service needs
remaining after the RTC's sunset;
and formation of the Office of
Contract Appeals, which pro­

Disposition Review program was
implemented as an internal
review process, ensuring that
budget documentation through­

vides administrative and techni­
cal support to the RTC Contract
Appeals Committee, established
in 1994 to independently review

out the RTC is consistent with
current program direction, ade­
quate to support program
requirements and priorities,

all major contract disputes.
The division is comprised of
the Offices of Budget and

appropriately maintained, and
readily accessible for review.
The Budget Information

accounting transactions to

Planning, Accounting Services,
Field Accounting and Asset

System (BIS), the office's major
vehicle for resource reporting,
was upgraded to report the use

RTC General Ledger, the
Corporation's official account­
ing system.

of staff resources. BIS provided
information about on-board
staff by location, function, and

The office managed the
nationwide RTC Accounts
Payable System and performed
all vendor maintenance for the
system. In 1994, the system
processed 230,000 invoices to

Significant 1994 achieve­
ments included the RTC's receipt
of an unqualified opinion on its

Operations, Management
Control, and Contract Appeals.

Office of Budget
and Planning
The Office of Budget and
Planning coordinates and over­
sees the RTC's budget process,
plans business activities, esti­
mates resource requirements,
measures performance, and
monitors progress in achieving
corporate goals.

Q
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 I ! 1111 I ( 111 I I I I ( 11


organization, which was neces­
sary to assess progress in reduc­
ing on-board staff to yearend
1994 targets.
In 1994, non-interest RTC
operating expenses totaled $2.2
billion, 28 percent below
expenses for 1993. O f this
amount, outside services
accounted for 51 percent;

Office of
Accounting Services
The Office of Accounting
Services performs corporate
accounting for the RTC. The
office produces and maintains
the RTC corporate accounting
records and related systems, the
corporate funding/cash-management operations, and the official
corporate financial statements
and reports reflecting the finan­
cial performance of the RTC in its
corporate, conservatorship, and
receivership capacities.
In 1994, the office record­
ed and reconciled all corporate
ensure the highest level of data
integrity and consistency in the

disburse approximately $30.7
billion. The vendor mainte­
nance group, established as the
sole authority to review and
establish authorized vendors,
processed 19,000 vendor
additions/changes.

I I 111111 111 T KI $ I ( 11 r 111 T111

CHIEF F I NANCI AL OFFI CER

The office managed the
funds received from the U.S.
Treasury, and the borrowings
from and repayments to the
Federal Financing Bank,
which provides loans to feder­
al agencies for working capital
purposes. In 1994, the office
oversaw the net paydown of
Federal Financing Bank princi­
pal borrowings by $7.6 billion,
compared to a $6.7 billion
net paydown in 1993. The
office also managed the dis­
bursement of initial funding
for the resolution of failed
savings associations.
The office prepared official
RTC financial information for
both internal and external
sources, responding to
inquiries from congressional
committees, the Thrift
Depositor Protection Oversight
Board, senior RTC manage­
ment, and the general public.

Office of Field
Accounting and
Asset Operations

relating to field accounting and
asset operations functions.
The office directs the activi­
ties of the RTC's day-to-day field
accounting and asset operations
for all assets held in receiver­
ship. As of January 1,1994,
receivership assets totaled
approximately $40 billion
(book value). During the year,
receivership assets increased
with the addition of $14 billion
in assets from 64 resolved thrifts.
Sales transactions and principal
collections of $31 billion were
processed. Special sales initia­
tives, such as securitizations and
structured transactions, required
complex financial allocation
and processing. At yearend,
receivership assets available for
sale totaled approximately
$23 billion.
The office provides man­
agement-reporting services to
the RTC's asset sales and asset
management components. The
office also develops tax and

itor, coordinate, and advise on
contract administration and
oversight matters for all financial
service centers.
As part of its continuing fis­
cal integrity program, the office
conducted extensive
Compliance Reviews in the six
field offices. The office also
completed Internal Control
Reviews for 49 major financial
functions. Significant enhance­
ments were made to the RTC's
subsidiary ledger system, includ­
ing one designed to improve
document tracking and control
for reconciliations.
The office directs a nation­
al cash-management program
for receiverships that has an
average monthly balance of
$2.4 billion. An automated
interface for wire transfers
between the RTC's Accounts
Payable System and the Federal
Home Loan Bank of Chicago
significantly strengthened the
RTC's internal controls over this

accounting policies, and directs
a nationwide financial opera­
tions training program. During

critical area during the year.

The Office of Field Accounting
and Asset Operations directs
and manages all asset and field
accounting operations in sup­

1994, approximately 1,400
employees were trained
through the program in 10 spe­

as part of the Office of Field
Accounting and Asset
Operations, provides accounting

cialty areas.

and asset operations support for

port of RTC asset sales, manage­
ment, and disposition activities.

The office implemented a
standard service contract, which

special sales initiatives. In 1994,
the National Sales Support

The office acts as a liaison
between headquarters and the
field offices for financial and

was used to consolidate several

Office provided assistance in

individual service contracts, for
each of the four financial service

closing 18 special sales transac­
tions encompassing approxi­
mately $4.5 billion in book

related asset-management
activities. The office also coor­
dinates activities with the RTC's

centers. This resulted in a sav­
ings of several million dollars in
first-year contractual expendi­

Kansas City to ensure their

tures. The National Financial
Service Center Contract
Oversight and Administration

compliance with procedures

Council was established to mon­

four financial service centers in
Atlanta, Dallas, Denver, and

1 94 1 1
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Digitized for9 FRASER 1 1 1 1


The National Sales Support
Office, established in late 1993

value, and provided financial
accountability for approximately
$7.5 billion in credit enhance­
ment, payment retention, and
disbursement accounts. At
yearend, the office had complet­

d

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CHIEF F I NA NCI A L OFFI CER

| FRASER
( 1111 f 1 i i
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Digitized for Q


ed processing the reconciliations
of 52 percent of the 482,887
loans included in the RTC's 108
special sales initiatives.
To prepare for the RTC's tran­
sition to the FDIC, the Office of
Field Accounting and Asset
Operations began planning the
transfer of the division's account­
ing operations to the FDIC. An
evaluation of all of the division's
accounting activities is underway
to ensure that all accounting
operations and activities are oper­
ationally sound prior to transfer.

Office of
Management
Control
The Office of Management
Control oversees the RTC's
internal control programs. This
includes developing corporate
internal control policies and
procedures, administering the
internal control and audit fol­
low-up programs, serving as the
liaison with internal and exter­
nal auditors, and preparing the
annual report on the RTC's
internal controls.
The office also oversees the
resolution of audit issues and
recommendations, reports to
management on the status of
corrective actions, and partici­
pates in monitoring the
Corporation's compliance with
the Chief Financial Officers Act
of 1990 and associated policies
of the Thrift Depositor
Protection Oversight Board.
In 1994, the office imple­
mented several major initiatives
to improve the RTC's internal
controls system, including two

( 1 1 Offi ci i
1

of three internal controls and
audit follow-up management
reforms required by the RTC
Completion Act.
In compliance with the act's
first reform requirement, the
office issued the 1995
Management Control Plan,
which outlines the schedule for
internal controls and program
compliance reviews to be con­
ducted during the year. To
achieve the second required
reform, the office implemented
procedures to notify the Thrift
Depositor Protection Oversight
Board of instances when pro­
posed corrective actions would
not be taken and the reasons for
such decisions. The third
required reform under the act—
improvements to the
Management Reporting
System—will be completed in
early 1995.
Other 1994 activities
included issuing the third annu­
al report to the Thrift Depositor
Protection Oversight Board on
the evaluation of the internal
controls program; establishing
the Audit Resolution Committee
to address significant unre­
solved audit recommendations;

Office of Contractor Oversight
and Surveillance, and RTC
Office of Inspector General;
cleared 170 fraud hotline cases
and reports of investigation; and
coordinated approximately 100
internal control and program
compliance reviews.

Office of
Contract Appeals
The Office of Contract Appeals
was created in 1994 to support
the activities of the newly
formed Contract Appeals
Committee. The committee was
established during the year at the
direction of the Deputy and
Acting Chief Executive Officer to
provide an independent review
of appeals of major decisions on
contractor and RTC disputes aris­
ing during the administration of
contracts. The committee is
authorized to render final RTC
decisions on all appeals of con­
tract dispute decisions in which
the questioned amount totals
$100,000 or more.
To support the committee,
the Office of Contract Appeals
provides all administrative and
technical assistance required to

and considering unique control
risks resulting from the transi­
tion of operations to the FDIC

resolve contract dispute deci­
sions that are appealed. During
the year, the office developed

and procedures to safeguard
against such risks.

policies and procedures for pro­
cessing and resolving contract

During the year, the office
cleared approximately 1,200
unresolved actions related to
oversight reports on contractors;
assisted headquarters and field

disputes, conducted extensive
orientation and training for RTC
staff and contractors regarding

offices prepare responses to 400

the procedures developed, and
created a national tracking and
reporting system for contract dis­

audit and review reports from
the General Accounting Office,

putes and appeals of contract
dispute decisions.

Kn i i i t i m

T u n

( 1 1 1 1 i i t 111




INFORMATION HESOUHCES MANAGEMENT

I \l l l l ! \1 \TI I ) \ I I E S I I I I I I I ! E S M A N A G E M E N T

f

he Department of Information
Resources Management (DIRM)
develops and manages national
automated information systems
to support RTC operations.

sion-critical systems, and partic­
ularly on the interaction of the
customers that cross organiza­
tional lines and have differing or
often conflicting needs.
In compliance with the RTC
Completion Act, in 1994 the
office worked with the FDIC to

DIRM also provides technical
support for the RTC's information
systems. The department consists
of the Offices of Systems
Development and Corporate
Information.
Major department activities
are guided by the Information
Resources Management (IRM)
Steering Committee, which
reviews selected system projects,

develop the Automated Systems
Evaluation Process, establishing
the framework for the formal eval­
uation of the RTC's automated sys­
tems. The process will assist in the
orderly transfer of responsibility
for RTC operations to the FDIC.
In 1994, the office support­
ed information systems in the
following RTC areas: finance,
assets, resolutions, legal services,
contracts, minority and women's

and the IRM strategic plan and
budget. The IRM Steering
Committee also reviews
recommendations on actions
requiring the attention of the
RTC Executive Committee,
which reviews more substantial

programs, and administration. As
DIRM's customers continued
winding down operations during
the year, the office's function
shifted toward maintaining the
application systems inventory. As

expenditures and establishes
strategic IRM policy.

needed, the office also actively
developed or enhanced corpo­
rate information systems, which

Office of Systems
Development

included the following:
Financial Systems

The Office of Systems
Development creates and man­
ages the RTC's national infor­

Accounts Payable (FMS-AP) —
FMS-AP processes approved

activity, post it to the General
Ledger, and assist in reconciling
the GL and subsidiary records. In
1994, the office increased CTM's
reporting capabilities.
Asset Systems
Real Estate Owned
Management System (REOMS)
— REOMS is the corporatewide repository for information
on the RTC's real estate assets.
During 1994, the office
enhanced REOMS' purchaser
and property tracking capabili­
ties for the Affordable Housing
Disposition Program.
National Asset Marketing
Application (NAMA) — NAMA
stores information about potential
investors expressing interest in
purchasing RTC assets. During
1994, the office enhanced the
system to track data related to the
RTC's Small Investor Program.
Legal Systems
Thrift Investigation Management
System (TIMS) — TIMS stores
data on failed thrifts, and organi­
zations and individuals related to
the institutions. It also includes

Financial Management System -

data on the status of investiga­
tions into failed thrifts, awarded
recoveries, and restitutions.

mation systems. The office has

RTC invoices and is fully inte­

During 1994, the office

two branches: Software
Management and Business

grated into the RTC's General
Ledger (FMS-GL). During 1994,

enhanced TIMS, providing it

Applications Analysis.

the office interfaced the FMS-AP
with the RTC Legal Information
System (RLIS) and the Federal

with a centralized restructured
database with multi-user access,
and improved security and pass­
word maintenance.

ments, and maintains national
information systems, and pro­
vides user training, documen­

Home Loan Bank (FHLB) sys­
tem, improving overall control

Professional Liability Section
Case Tracking System (PLSCTS)

and efficiency.

— PLSCTS is used to oversee all

tation, and other support for
these systems.

Control Totals Module
(CTM) — CTM is used to capture

professional liability matters.
During 1994, the office merged
individual PLSCTS databases

The Software Management
Branch plans, develops, imple­

The Business Applications

summary asset-related financial

Analysis Branch focuses primari­
ly on systems-related activities of
the RTC's most visible and mis­

QQ

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( E S t l M E IS I I t [ I I I 1

R e s 1111111

T u n

( i » r 1111111

INFORMATION RESOURCES MANAGEMENT

into one centralized database to
consolidate professional liability
case information, and to

FDIC mainframe in 1994 for
RTC use.

In 1994, OCI continued the
consolidation of corporate data
center operations at the RTC and

improve reporting capabilities.
Conflicts Tracking System
(CTRACK) — CTRACK, imple­
mented in 1994, tracks the status
of a firm's eligibility to enter into
contracting engagements for

Office of Corporate
Information

FDIC's Virginia Square data cen­
ter in Arlington, Virginia, by mov­
ing the Asset Manager System
(AMS) and the Control Totals
Module (CTM) system from

legal services with RTC.

Contract Systems
Contracting Activity Reporting
System (CARS) — CARS is used
to track the Corporation's con­
tracting activities beginning with

The Office of Corporate
Information (OCI) provides the
technical infrastructure and other
support for the use of corporate
information resources by RTC
headquarters and field offices.
The office has two branches:
Information Resources Manage­
ment and Information Systems.
The Information Resources
Management Branch administers
and manages Information
Resources Management (IRM)

the receipt of a potential contrac­
tor's statement of work through
award, performance, and com­
pletion of the contract. In 1994,
the office enhanced CARS' edit­
ing and validation capabilities,
and reporting capabilities for the

programs, including oversight of
systems quality, standards, secu­
rity, and internal controls. The
branch also oversees IRM plan­

Minority- and Women-Owned
Business Program.
Office o f Contractor
Oversight & Surveillance

ning and policy formulation.
The Information Systems
Branch manages the RTC's data
center, Local Area Network (LAN)

Investigations Tracking System
(OCOS-ITS) — OCOS-ITS tracks
contractor complaints and con­

and Wide Area Network (WAN)
operations, and telecommunica­
tion services (voice and data).

tractor-related cases brought
against the RTC. In 1994, the
office installed state-of-the-art
programming language in
OCOS-ITS to improve system
performance.

In 1994, the office worked
with the FDIC to merge the
RTC's corporate-wide informa­
tion network, consisting of

Administrative Systems
Personnel Action Request
System (PARS) — PARS is an
FDIC system used to process
and track RTC personnel
actions. As a result of a 1993
review of the Office of Human
Resources Management's func­
tions and data processing needs,
PARS was implemented on the

I> M
11
1 1 1 1 K F P 1 1 1


Midland Data Center in Kansas
City, Missouri, to Virginia Square.
The office conducted tests of
the RTC Data Center Business
Recovery Plan to ensure that
information systems will contin­
ue to be available if normal data
center mainframe operations are
interrupted due to a disaster or
other unanticipated event.
Data Quality Action Plans
for the primary information sys­
tems were approved by the Chief
Financial Officer and the Vice
Presidents. These plans were
developed as part of the corpo­
rate Data Quality Program to
ensure that all RTC automated
systems data are complete, accu­
rate, and timely.
Teams of OCI managers and
program managers reviewed 23
RTC-sensitive mainframe and
PC/LAN-based information sys­
tems during the year to deter­
mine whether the systems
provide adequate safeguards and

12,000 work stations, with the
FDIC's network. This effort

achieve their stated objectives.

resulted in the creation of one of
the largest Banyan Vines net­
works nationwide, providing

The Office of Corporate Finance
and OSD participated jointly in
these reviews to ensure that nec­

interagency e-mail and file trans­
fer capabilities to 25,000 RTC
and FDIC users. The Network

essary security and controls were
in place and effective.
The Automated Information

Control Center was also estab­
lished, enabling OCI to monitor

Systems Data Archiving/
Retention Working Group was

and manage the information net­
work, assuring its availability to

formed to determine the optimal
technologies for archiving and
retaining data in the immediate

corporate customers.

I I EI I I I T I I I

I I J I I

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I I I ( E I EI I

Q

I \I I I I U I 1 1 1 I I V R E S O U R C E S M A N A G E M E N T

and post RTC-sunset environ­
ment. The group identified
data archiving requirements
to be used for assessing tech­
nology alternatives.
The Software Control
System (SCS) was implemented
to track commercial off-the-shelf
software. This system will ensure
that software is accounted for
and allocated in a way that will
maximize its value to both the
RTC and the FDIC during the
organizations' downsizing and
eventual merger.
In 1994, OCI developed the
RTC DIRM Transition Plan for
the Transition Task Group and
developed a Transition Support
Team process and methodology
for closing/transitioning offices.
The office also collaborated for
the first time with FDIC DIRM on
a joint FDIC/RTC IRM Strategic
Plan for 1995. The plan, which
emphasizes customer service,
will ensure that the Corpor­
ations' information resources sat­
isfy present and future business
needs while accommodating
changes in business conditions
and technology.

II
I t t I I T I I I K E { I I I ( [ S I l l l C E I E I T


I II I II I I• I

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REGULATIONS

 ( I L I T I I I S
Q J
R E


Final Rules
Service of Process Upon the
Resolution Trust Corporation
P u b lis h e d F e b r u a r y 9 , 1 9 9 4
E f f e c t iv e F e b r u a r y 9 , 1 9 9 4

The RTC adopted a regulation
designating the officers upon
whom service of process may be
made when the RTC is sued in
its receivership, conservatorship,
or corporate capacities.

chase performing assets from
other failed institutions. With the
new rule, the RTC is able to use
objective standards to quickly
identify predominantly minority
neighborhoods without delaying
the resolution of an institution.
This final rule was adopted with­
out change from an interim rule
that became effective on
February 24,1994.

Definition of Predominantly
Minority Neighborhood

Marketing and Selling Real
Property on an Individual Basis
and Disposition of Real EstateRelated Assets

P u b lis h e d J u ly 2 6 ,1 9 9 4

P u b lis h e d N o v e m b er 2 3 ,1 9 9 4

E ffe c tiv e A u g u s t 2 5 ,1 9 9 4

E ffe c tiv e D ecem ber 2 3 ,1 9 9 4

that became effective on
September 19,1994.
Affordable Housing
Disposition Program
P u b lis h e d D e c e m b e r 1 3 , 1 9 9 4
E f f e c t iv e J a n u a r y 1 2 ,1 9 9 5

The RTC issued a final rule
amending the RTC's Affordable
Housing Disposition Program

The RTC adopted a final rule
defining "predominantly minori­
ty neighborhood" as any U.S.
Postal Zip Code geographical
area in which 50 percent or

The RTC adopted a final rule
establishing procedures for mar­

more of the persons residing
therein are minorities based on

with a book value of more than
$400,000 and non-performing
real estate loans with a book

the most recent U.S. Census
data. The RTC may alternatively
determine that other reasonably
reliable, readily accessible data

asset would maximize net recov­
ery while providing opportuni­
ties for broad participation by
qualified bidders, or unless cer­
tain statutory exceptions apply.
This final rule was adopted with­
out change from an interim rule

keting real-estate-owned (REO)
assets on an individual basis,
and for disposing of REO assets

value of more than $1 million.
Consistent with provisions in the
RTC Completion Act aimed at
expanding opportunities for

(AHDP). Among other things, the
rule requires that the RTC issue
guidance to staff and contractors
on how to provide seller-financing information to minority- and
women-owned businesses; noti­
fy clearinghouses of residential
properties appraised above the
AHDP limits; adhere to a nar­
rower definition of "non-profit"
organizations to ensure that the
RTC deals only with qualified
not-for-profit entities; and imple­
ment a 45-day exclusive market­
ing period in the Multifamily
Direct Sales Program for non­
profit organizations and public
agencies. These regulations will

indicate different neighborhood
boundaries. Subject to its statuto­
ry cost constraints, the RTC is

small investors, the rule requires
the RTC to market real property

required, in considering offers to
acquire an institution or branch
located in a "predominantly

on an individual basis for at least
120 days before making the
property available on a portfolio

minority neighborhood," to give
preference to offers from minori­
ty individuals, minority-owned

basis or in a multi-asset sales ini­
tiative. The rule also lays out
marketing procedures designed

enhance the availability and

businesses, or minority deposito­

to ensure that a management
and disposition plan is prepared

lower-income, and moderate-

ry institutions. The RTC is also
authorized to grant minority
acquirers of such institutions first
priority in the disposition of the
institutions' assets and to grant
the acquirers interim capital
assistance and the option to pur­

affordability of residential real
property for very low-income,

for REO assets with a book value

income families and individuals.
This final rule was adopted with­

of more than $400,000 and non­
performing real estate loans with

out change from an interim final
rule that became effective on

a book value of more than $1

October 19, 1994.

million, unless the RTC deter­
mines that a bulk sale of the

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REGULATIONS

Interim Final Rule

Proposed Rule

Affordable Housing
Disposition Program

Claims Based Upon Acts or
Omissions of the Receiver

P u b l is h e d O

P u b l is h e d Se p t e m b e r 2 2 , 1 9 9 4

E f f e c t iv e O

cto ber

cto ber

1 9 ,1 9 9 4
1 9 ,1 9 9 4

See Final Rules for more infor­
mation on this interim final rule.

Interim Rules
Definition of Predominantly
Minority Neighborhood
P u b l is h e d F e b r u a r y 2 4 ,1 9 9 4
E f f e c t iv e F e b r u a r y 2 4 , 1 9 9 4

See Final Rules for more infor­
mation on this interim rule.
Marketing and Selling Real
Property on an Individual Basis
and Disposition of Real EstateRelated Assets
P u b l is h e d S ep t e m b e r 1 9 ,1 9 9 4
E f f e c t iv e S e p t e m b e r 1 9 , 1 9 9 4

See Final Rules for more infor­
mation on this interim rule.

The RTC proposed adopting
a regulation that sets forth
procedures applicable to
administrative claims based
on acts or omissions of the
RTC as receiver. The rule would
establish time limits for the
filing of administrative claims
and require the RTC to remind
potential claimants of time
limits imposed for filing suits.

Revised Policy
Statement
Revised Policy Statement for
the Disposition of Residential
Units Which Were Previously
Subject to Rent and Securities
Regulations
P u b l is h e d F e b r u a r y 4 ,1 9 9 4
E f f e c t iv e F e b r u a r y 4 ,1 9 9 4

The RTC revised its policy
statement regarding the abroga­
tion of leases on units in prop­
erties that were subject to state
and local rent or securities
regulations prior to their acqui­
sition by the RTC. The original
policy statement prohibited the
RTC from exercising its repudi­
ation powers with respect to
these types of units if they were
leased by low- or moderateincome tenants, and defined
such tenants as individuals or
families whose incomes did not
exceed 115 percent of the area
median income. The revised
policy statement expands the
definition of low- and moderate-income to T30 percent of
the area median income, there­
by assisting the RTC in preserv­
ing the availability and
affordability of residential real
property for low- and moderate-income individuals.

1 hf

If f ♦ 1
i n
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It ! J I 1I T I I I

$

Q

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REGULATIONS

Policy Statement
Policy Statement on Procedures
for Non-Defaulting
Commercial Borrowers to
Appeal Adverse Credit
Decisions of the RTC Acting as
Conservator
P u b lis h e d J u l y 1 1 , 1 9 9 4
E f f e c t iv e J u l y 1 1 , 1 9 9 4

The RTC issued a policy state­
ment outlining an appeals
process by which business or
commercial borrowers may
appeal decisions made by the
RTC in its capacity as conserva­
tor of an insured depository insti­
tution which would have the
effect of terminating or otherwise
adversely affecting credit or loan

Notices of
Availability
Warranted Contracting
Officer Program
P u b lis h e d J a n u a r y 2 1 , 1 9 9 4
E f f e c t iv e F e b r u a r y 1 ,1 9 9 4

In accordance with the RTC
Completion Act, the RTC noti­
fied the public that it maintains
the Warranted Contracting
Officer Program, which requires
that only RTC employees desig­
nated by the RTC as warranted
contracting officers or managing
agents of savings associations
under RTC conservatorship may
execute contracts on behalf of
the RTC.

agreements, lines of credit, and
similar arrangements. The rule
applies only to borrowers who

Legal Warrant Program

have not defaulted on their
obligations to the institution in
conservatorship.

P u b l is h e d F e b r u a r y 7 ,1 9 9 4

[ Q
 K [ ( I 1 1 I I • I J


E f f e c t iv e F e b r u a r y 1 , 1 9 9 4

The RTC notified the public that
it maintains the Legal Warrant
Program, which requires that
only employees designated by
the RTC as legal officers may
execute contracts for legal ser­
vices on behalf of the RTC.
Warranted Contracting Officer
Program
P u b lis h e d J u n e 1 4 , 1 9 9 4
E f f e c t iv e M a y 1 6 , 1 9 9 4

The RTC revised its Warranted
Contracting Officer Program
to expand contracting authority
for certain warranted contract­
ing officers.

K E J I I I I I• I

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FINANCIAL STATEMENTS and INTERNAL CONTROLS

Comptroller General
of the United States
Washington, D.C. 20548

B-259541

June 22, 1995
To the Thrift Depositor Protection
Oversight Board
Resolution Trust Corporation

We have audited the Resolution Trust Corporation's
accompanying statements of financial position as of
December 31, 1994 and 1993, and the related statements of
revenues, expenses, accumulated deficit, and cash flows for
the years then ended. We found:
--The Corporation's financial statements referred to above
were reliable in all material respects.
--The Corporation fairly stated that internal controls in
place on December 31, 1994, were effective in safeguarding
material assets against loss from unauthorized
acquisition, use, or disposition; assuring the execution
of transactions in accordance with management's authority
and material laws and regulations; and assuring that there
were no material misstatements in the financial
statements. While we identified one internal control
weakness, we did not consider it to be material.
--There were no reportable instances of noncompliance with
laws and regulations we tested.
The following section presents significant matters considered
in performing our audit and forming our opinions. This
report also discusses each of the above audit conclusions in
more detail and our recommendation for improving the
Corporation's internal control structure.
Appendix I discusses the scope of our audit. Appendix II
presents the Corporation's financial statements. Appendix
III presents management's report on internal controls. The
Corporation's written comments on a draft of this report are
included in appendix IV.




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B-259541

SIGNIFICANT MATTERS
The following information is presented to highlight
(1) uncertainties that could affect the Corporation's loss
estimates, (2) the current status of the Corporation and its
funding, (3) the potential continuing impact of past
weaknesses in contract issuance and contractor oversight, and
(4) the progress made in reducing the risk associated with
weak internal controls and uncertain funding.

Uncertainties Could Affect Estimated
Recoveries From Receivership Assets
Although the Corporation continued to use an appropriate
methodology for estimating the future recovery value of
receivership assets1 and has used the best information
available, uncertainties regarding general economic
conditions, interest rates, and real estate markets could
increase or decrease the final cost of resolving failed
institutions. The uncertainties impact the final cost of
resolving failed institutions by affecting the amount the
Corporation ultimately recovers from disposing of
receivership assets.
As described in notes 4 and 5 to the financial statements,
the Corporation records as assets the full amount advanced to
conservatorships and receiverships for liquidity and working
capital (Advances) or paid to close failed thrifts
(Subrogated Claims). The Corporation then establishes loss
allowances against these assets by estimating the difference
between the amounts paid or advanced and the expected
recovery. As of December 31, 1994, the Corporation estimated
a total net recovery of $20.3 billion from its outstanding
Subrogated Claims and Advances. The amounts ultimately
recovered and repaid to the Corporation may increase or
decrease as a result of changes in general economic
conditions, interest rates, and real estate markets.
Recoveries from conservatorship and receivership assets are
used to repay the Corporation. As of March 31, 1995,
approximately 26 percent of the book value of assets held for

1The Corporation's estimated recovery values are based in
part on a statistical sampling of receivership assets subject
to a sampling error of plus or minus $700 million with a 95
percent confidence interval.

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B-259541

sale by the Corporation's receiverships2 were performing 1-4
family mortgages, cash, and investment securities. The
remaining 74 percent were delinquent loans, real estate
owned, other assets, other mortgages and loans, and
investments in subsidiaries of failed thrifts and are
considered hard-to-sell by the Corporation. It is
particularly difficult for the Corporation to predict the
recovery value and timing of sales for these hard-to-sell
assets. Typically, if a receivership's assets sell later or
for less than predicted, the final loss on resolving the
failed institution will be higher than estimated.
Conversely, higher or earlier recoveries would typically
lower the final loss.
As discussed in note 15 to the financial statements, the
Corporation's loss allowances also include estimated losses
arising from securitization transactions,3 and
representations and warranties4 made in the process of
disposing of the assets of failed institutions. As of
December 31, 1994, the allowances included $1.7 billion
representing the expected credit losses on securitization
transactions and $1.2 billion representing losses arising
from representations and warranties. However, the
Corporation's loss experience has been limited to date.
Although the Corporation used the best information available
to estimate these losses, the amount of future losses may
significantly increase or decrease over the remaining life of
the loans that were sold, which could be as long as 20 years.
These future losses will be affected by the behavior of the

2The Corporation's one institution in conservatorship at
December 31, 1994, was resolved prior to March 31, 1995.
3Securitization refers to the Corporation's practice of
selling securities backed by the underlying future cash flows
of groups of loans.
To protect purchasers of the securities
against credit losses arising from defaults and delinquencies
of the underlying loans, the Corporation has set aside a
portion of the securitization proceeds for possible future
credit losses.
4The Corporation and its receiverships and conservatorships
provide representations and warranties on the unpaid
principal balance of certain loans sold for cash, sold as
part of securitization transactions, exchanged for mortgagebacked securities, or sold under contracts that convey the
right to service mor t g a g e s .

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B-259541

economy, interest rates, and real estate markets, as well as
the performance of the collateral underlying the
transactions. Changes in these factors, which are beyond the
Corporation's control, could result in higher or lower credit
and claims losses than currently estimated.
The final cost of resolving failed institutions will also be
affected by uncertainties related to the Federal Deposit
Insurance Corporation's (FDIC) treatment of the Resolution
Trust Corporation's remaining receivership assets after it
ceases operations on December 31, 1995.5 The Corporation's
estimated loss on resolving failed institutions at
December 31, 1994, includes estimates of future asset
recoveries and related expenses. These estimates are largely
based on the Corporation's experience in disposing of
receivership assets. The actual amounts for some asset
recoveries and related expenses will be determined after the
Corporation ceases operations. After December 31, 1995, FDIC
may apply different asset disposition strategies and valuing
methodologies which could result in changes to the estimated
recovery values of the remaining receivership assets.

Funding and Current Status
of the Corporation
For each institution it resolves, the Corporation calculates
the amount it will have to pay to cover depositor claims and
then estimates how much it will recover from the sale of the
failed institution's assets. The portion not recovered from
the sale of receivership assets is a loss to the Corporation
and must be covered with loss funds. The amount expected to
be recovered is borrowed from the Federal Financing Bank
(FFB) and is considered working capital.
As shown in table 1, the Congress has made $105 billion
available to the Corporation to cover losses associated with
resolutions.

5Under the Resolution Trust Corporation Completion Act, the
Corporation will terminate on or before December 31, 1995.
All remaining assets and liabilities will be transferred to
the FSLIC Resolution Fund, which is managed by FDIC.

I FRASER
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( I I I I ( I I 1 S T I T [ ■I I T S

B-259541

Table 1:

Total Loss Funding Made Available as of
December 31. 1994

(Dollars in billions)
Financial Institutions Reform,
Enforcement Act of 1989

Recovery,

and
$ 50.0

Resolution Trust Corporation Funding Act of 1991
Resolution Trust Corporation Refinancing,
Restructuring, and Improvement Act of 1991

30.0
6. 7a

Resolution Trust Corporation Completion Act

18.3a

Total

$105.0

aThe Resolution Trust Corporation Refinancing, Restructuring,
and Improvement Act of 1991 (Public Law 102-233) provided
$25 billion in December 1991, which was only available for
obligation until April 1, 1992. After the deadline passed,
the Corporation returned $18.3 billion of unobligated funds
to the Treasury in April 1992. In December 1993, the RTC
Completion Act removed the April 1, 1992, deadline, thus
making the $18.3 billion available to the Corporation for
resolution activities.
Table 2, which is based on estimates in the Corporation's
December 31, 1994, financial statements and the related
notes, shows cumulative estimated loss funding needs of
$90.2 billion. This amount includes funding used to cover
the Corporation's losses to date as well as amounts needed to
complete the resolution of all receiverships,
conservatorships, and institutions for which it is probable
that government assistance may be required on or before
June 30, 1995.6

6The Corporation's estimated loss funding needs does not
include up to $1 billion in losses that the Corporation could
possibly incur from pending lawsuits and as yet unasserted
claims as discussed in note 11 to the financial statements.

f1111 ( 111 Sritfa ei ri



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B-259541

Table 2 :

Cumulative Estimated Loss Funding Needs as
of December 31. 1994

(Dollars in billions)
Receiverships

$ 89.8
.4

Conservatorships and probable failures
Possible failures3
Total

0
$ 90.2

aAs of the date of our report, it is highly unlikely the
Corporation will have to resolve any institutions considered
possible failures before June 30, 1995. Institutions
classified as possible failures will more likely become the
responsibility of the Savings Association Insurance Fund
(SAIF) if failures are to occur. SAIF will assume the
Corporation's resolution responsibilities beginning July 1,
1995.
The Corporation's estimates show that $89.8 billion will be
used to resolve the 744 institutions closed as of
December 31, 1994, and an estimated $.4 billion will be used
to resolve the 1 institution in conservatorship and
3 institutions considered probable failures before the
Corporation's authority to resolve institutions expires on
June 30, 1995.
As shown in table 3, the Corporation estimates it will have
$14.8 billion of unused loss funds after resolving all
institutions for which it is responsible. This is based on
the estimates presented in the Corporation's 1994 financial
statements, which are subject to the uncertainties discussed
previously and in notes 5 and 10 to the financial statements.
The need to use any of the $14.8 billion of estimated unused
loss funds is dependent on the Corporation's actual
recoveries from receiverships and its actual cost of future
resolutions.

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B-259541

Table 3 :

Estimated Unused Loss Funds After Completion of
the Corporation's Resolution Activities

(Dollars in billions)
Total loss funding made available

$ 105.0

Less: cumulative estimated loss
funding needed
Estimated unused loss funds

(90.2)
$

14.8

At December 31, 1994, the Corporation had sufficient net
assets to repay its $23 billion in working capital borrowings
from FFB. The Corporation would only be unable to repay its
FFB borrowings if its combined additional losses on
receivership assets and future resolutions exceeded the
$14.8 billion in estimated unused loss funds.
Currently, the Corporation, FDIC, and the Thrift Depositor
Protection Oversight Board are reviewing the funding needed
to dispose of the Corporation's assets and settle liabilities
remaining after December 31, 1995. This review will consider
the need for any additional funding in excess of the
Corporation's currently estimated loss funding needs of
$90.2 billion.
Loss funds not used by the Corporation are available for
losses incurred by the Savings Association Insurance Fund
(SAIF) subject to the conditions set forth in the Resolution
Trust Corporation Completion Act.7 Also, according to the
act, funds in excess of the amounts needed by both the
Corporation and SAIF will be returned to the general fund of
the Treasury.

7The Resolution Trust Corporation Completion Act makes
available to SAIF, during the 2 -year period beginning on the
date of the Corporation's termination, any of the $18.3
billion in appropriated funds not needed by the Corporation.
However, prior to receiving such funds, FDIC must first
certify, among other things, that SAIF cannot fund insurance
losses through industry premium assessments or Treasury
borrowings without adversely affecting the health of its
member institutions and causing the government to incur
greater losses.

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B-259541

Controls Over Contracting
Could Affect Recoveries
From Receiverships
The Corporation has used thousands of private contractors to
manage and dispose of assets from failed thrifts, including
activities such as collecting income and paying expenses.
The estimated recoveries from receiverships included in the
Corporation's financial statements include the results of the
receipts and disbursements made by contractors that perform
services for receiverships during the year. Weak operating
controls over contract issuance and contractor oversight
could impact these estimated recoveries from receiverships.
While we assess, as part of our financial statement audit,
internal accounting controls over receivership receipts and
disbursements, the Corporation's operating controls over
contract issuance and contractor oversight are not part of
the scope of our audit. These operating controls are
considered as part of GAO's other reviews of the
Corporation's operations8 as well as by the Corporation's
Inspector General and Office of Contract Oversight and
Surveillance.
In response to previously reported operating control
weaknesses, the Corporation has taken actions to improve the
process of contract issuance and contractor oversight. In
addition, the Corporation has recently placed increased
emphasis on the process of closing out9 contracts to ensure
that contractors have fulfilled all contractual
responsibilities.

8Hicrh-Risk Series: An Overview (GAO/HR-95-1, February 1995);
Hiah-Risk Series: Quick Reference Guide (GAO/HR-95-2,
February 1995); and Resolution Trust Corporation: Efforts
Under Wav to Address Management Weaknesses (GAO/GGD-95-109,
May 12, 1995) .
9The Corporation's contracting manual states that a contract
closeout includes, among other things, a determination by the
contracting officer that (1) all deliverables, including
reports, have been received by the Corporation and accepted,
(2) final payment has been made, (3) all collections of funds
due to the Corporation have been completed, (4) all financial
documents are in the file, (5) all Corporation property has
been returned and accounted for, and (6) all Corporation
files have been returned.

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B-259541

However, during 1994, reports issued by the Corporation's
Inspector General and the Office of Contract Oversight and
Surveillance demonstrate that despite the Corporation's
actions to correct contracting problems, the effects of early
neglect of contracting operations remain. These reports also
identified significant performance problems with contracts
that were issued before many contracting reforms and
improvements were implemented by the Corporation. As a
result, the Corporation remains vulnerable to the risks
associated with contracting operations and contractors'
performance and cannot be sure that it is recovering all it
should from receiverships.
Progress in Reducing Risk
In 1992, we reported that the Corporation was designated as a
high-risk entity because of weaknesses in its asset
disposition, contracting, information systems, and financial
management and accountability.10 We also noted our concerns
about uncertainties affecting its resolution activities and
funding levels. Finally, we warned that the thrift clean-up
would not be completed before the Corporation closed down and
that the total cost would depend, in part, on how effectively
FDIC settled any remaining assets and liabilities.
Since 1992, the Congress, the Corporation, and FDIC have
reduced these risks to the point that we no longer consider
the Corporation a high-risk.11 The Congress provided the
additional funding needed to complete the thrift clean-up,
mandated management reforms, and required that a task force
be formed to facilitate transition. In addition, the
Corporation made substantial progress in addressing internal
control and operating weaknesses by implementing mandated
reforms and taking additional actions to strengthen operating
procedures, information systems, and internal controls.
Also, as required, the Corporation and FDIC established a
task force to facilitate the transfer of remaining assets,
personnel, and operations to FDIC in a coordinated manner.
However, one continuing source of concern is the difficulty
in terminating a large and complex organization with
thousands of personnel and billions in assets, while
attempting to minimize disruption. Although transition

10Hiah-Risk Series: Resolution Trust Corporation
4, December 1992).

(GAO/HR-93-

iL
: See footnote 9.

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B-259541

planning has
of disposing
to carry out
controls and

gone well, the Corporation faces the challenge
of its remaining assets and working successfully
the transition while maintaining internal
accountability.

OPINION ON FINANCIAL STATEMENTS
In our opinion, the financial statements present fairly, in
all material respects, in accordance with generally accepted
accounting principles, the Corporation's
-- assets, liabilities,
and 1993;

and equity as of December 31, 1994

-- revenues, expenses, and accumulated deficit for the years
then ended; and
-- cash flows for the years then ended.
However, misstatements may nevertheless occur in other
financial information reported by the Corporation as a result
of the internal control weakness described below.
Additionally, significant uncertainties discussed earlier in
this report and in notes 5 and 10 to the financial
statements, may ultimately result in higher or lower
resolution costs than those estimated in these statements.

OPINION ON MANAGEMENT'S ASSERTION ABOUT
THE EFFECTIVENESS OF INTERNAL CONTROLS
We evaluated management's assertion about the effectiveness
of its internal controls designed to
-- safeguard assets against loss from unauthorized
acquisition, use, or disposition;
-- ensure the execution of transactions in accordance with
management's authority and with laws and regulations that
have a direct and material effect on the financial
statements; and
-- properly record, process, and summarize transactions to
permit the preparation of reliable financial statements in
accordance with generally accepted accounting principles
and to maintain accountability for assets.

IM
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B-259541

The Corporation's management fairly stated that those
controls in effect on December 31, 1994, provided reasonable
assurance that losses, noncompliance, or misstatements
material in relation to the financial statements would be
prevented or detected on a timely basis, based on the control
criteria used. Management's assertion, which is included in
appendix III, was made using the internal control and
reporting criteria set forth in the implementing guidance for
the Federal Managers' Financial Integrity Act of 1982.
However, our work identified the need to improve internal
controls, as described in the following section. This
weakness, although not considered material,12 represents a
significant deficiency in the design or operation of internal
controls which could adversely affect the Corporation's
ability to fully meet the internal control objectives listed
above. In making its assertion, the Corporation's management
considered the internal control weakness we identified.
While management's assertion about the effectiveness of
internal controls was reasonable, misstatements may
nevertheless occur in other financial information reported by
the Corporation. Because of inherent limitations in any
system of internal controls, losses, noncompliance, or
misstatements may nevertheless occur and not be detected.

12A material weakness is a reportable condition in which the
design or operation of the internal controls does not reduce
to a relatively low level the risk that losses,
noncompliance, or misstatements in amounts that would be
material in relation to the financial statements may occur
and not be detected within a timely period by employees in
the normal course of their assigned duties.
Reportable
conditions involve matters coming to our attention relating
to significant deficiencies in the design or operation of
internal controls that, in the auditor's judgment, could
adversely affect an entity's ability to (1) safeguard assets
against loss from unauthorized acquisition, use, or
disposition, (2) ensure the execution of transactions in
accordance with management's authority and in accordance with
laws and regulations, or (3) properly record, process, and
summarize transactions to permit the preparation of financial
statements and to maintain accountability for assets.
Reportable conditions that are not considered to be material
nevertheless represent significant deficiencies in the design
or operation of internal controls and need to be corrected by
management.

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REPORTABLE CONDITION
The Corporation's corrective actions during 1993 and 1994
resolved two of the three reportable conditions identified in
our audit of its 1993 financial statements. The Corporation
strengthened controls over posting wire receipts to the
general ledger and in reconciling receivership assets. For
the remaining reportable condition, weaknesses in general
controls over some computerized information systems,13 the
Corporation addressed the weaknesses we identified. However,
our audit of the 1994 financial statements identified
additional weaknesses such that this reportable condition
continued to exist.
Because the Corporation relies on its computer systems
extensively, both in its daily operations and in processing
and reporting financial information, the effectiveness of
general controls is a significant factor in ensuring the
integrity and reliability of financial data. Our audit of the
Corporation's 1994 financial statements found that the general
controls still did not provide adequate assurance that data
files and computer programs were fully protected from
unauthorized access and modification. However, prior to
completion of our fieldwork in June 1995, we found that the
Corporation had already corrected several of the weaknesses
we identified. In addition, for the remaining weaknesses, the
Corporation had prepared corrective action plans.
During 1994, the Corporation performed accounting and control
procedures, such as reconciliations and manual comparisons,
which would have detected material data integrity problems
resulting from inadequate general controls. Without these
procedures, the weaknesses in general controls would raise

13General controls are policies and procedures that apply to
an entity's overall effectiveness and security of operations,
and that create an environment in which application controls
and certain user controls operate. General controls include
the organizational structure, operating procedures, software
security features, system development and change control, and
physical safeguards designed to ensure that only authorized
changes are made to computer programs, that access to data is
appropriately restricted, that back-up and recovery plans are
adequate to ensure the continuity of essential operations,
and that physical protection of facilities is provided.

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significant concerns over the integrity of information
obtained from the affected systems.
We also noted other less significant matters involving the
internal control structure and its operation which we will
communicate separately to the Corporation's management.
COMPLIANCE WITH LAWS AND REGULATIONS
Our tests for compliance with significant provisions of
selected laws and regulations disclosed no instances of
noncompliance that would be reportable under generally
accepted government auditing standards.1
4
RECOMMENDATION
We recommend that the Deputy and Acting Chief Executive
Officer direct the Corporation's staff to monitor the
implementation and progress of the corrective actions related
to the weakness we identified in general controls over some of
the Corporation's computerized information systems.
CORPORATION COMMENTS
AND OUR EVALUATION
In comments on a draft of this report, the Corporation's
Chief Financial Officer agreed with our findings and
recommendation. The Chief Financial Officer's written
comments, provided in appendix IV, discuss efforts, many of
which are ongoing, intended to address the reportable
condition. We plan to evaluate the adequacy and

14The Federal Deposit Insurance Corporation Improvement Act
of 1991 requires that the Resolution Trust Corporation
resolve institutions in the least costly manner and that we
report to the Congress annually on the Corporation's
compliance with the least-cost provisions. Out most recent
least-cost compliance review identified no significant
compliance issues. A detailed discussion of our findings and
the Corporation's comments is presented in 1993 Thrift
Resolutions: RTC's Resolution Process Generally Adequate to
Determine Least Costly Resolutions (GAO/GGD-95-119, May 15,
1995).

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effectiveness of these efforts as part of our audit of the
Corporation's December 31, 1995, financial statements.

Charles A. Bowsher
Comptroller General
of the United States
June 2, 1995

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OBJECTIVES.

SCOPE. AND METHODOLOGY

The Corporation's management is responsible for
preparing annual financial statements in conformity with
generally accepted accounting principles;
establishing, maintaining, and evaluating the internal control
structure to ensure that it provides reasonable assurance that
the internal control objectives previously mentioned are met;
and
complying with applicable laws and regulations.
We are responsible for obtaining reasonable assurance about whether
(1) the financial statements are free of material misstatement and
presented fairly in conformity with generally accepted accounting
principles and (2) management's assertion about the effectiveness
of internal controls is fairly stated in all material respects
based upon the criteria in GAO's Standards for Internal Controls in
the Federal Government required by the Federal Managers' Financial
Integrity Act.
We are also responsible for testing compliance with
significant provisions of selected laws and regulations.
In order to fulfill these responsibilities, we
examined, on a test basis, evidence supporting the amounts and
disclosures in the financial statements;
assessed the accounting principles used and significant
estimates made by the Corporation's management;
evaluated the overall presentation of the financial
statements;
evaluated and tested relevant internal controls over the
following significant cycles, classes of transactions, and
account balances:
-- resolved institutions, consisting of policies and
procedures related to (1) resolution activities, (2)
receipts and disbursements in receiverships, and (3)
valuation of the Corporation's net receivables from
resolution transactions and assistance;
-- unresolved institutions, consisting of policies and
procedures related to identifying and estimating the cost

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of future resolutions and of providing advances to
institutions in conservatorship;
-- Federal Financing Bank borrowings, consisting of policies
and procedures related to the borrowing, use, and repayment
of working capital;
-- treasury, consisting of policies and procedures related to
Corporate cash receipts and disbursements; and
-- financial reporting, consisting of policies and procedures
related to the processing of journal entries into the
general ledger and the preparation of financial statements;
and
tested compliance with significant provisions of the following
laws and regulations:
-- section 21A of the Federal Home Loan Bank Act (12 U.S.C.
1441a) and
-- Chief Financial Officers Act of 1990 (Public Law 101-576) .
We limited our work to accounting and other controls necessary to
achieve the objectives outlined in our opinion on management's
assertion about the effectiveness of internal controls.
We conducted our audit between July 1994 and June 1995 in
accordance with generally accepted government auditing standards.
We believe that our audits provide a reasonable basis for our
opinions.
The Corporation's Chief Financial Officer provided written comments
on a draft of this report.
These comments are discussed in the
"Corporation Comments and Our Evaluation" section of the opinion
letter and are reprinted in appendix IV. We have incorporated the
Corporation's views where appropriate.

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APPENDIX II

R E S O LU T IO N T R U S T C O R P O R A T IO N S T A T E M E N T S O F F IN A N C IA L P O S ITIO N

(dollars in thousands)
December 31,1994

December 31,1993

$ 4,034,900

$ 6,470,428

2,963,704

7,337,863

17,378,274

21,158,047

235,097

76,387

26,290

10,120

$24,638,265

$35,052,845

$

$

ASSETS
Cash (Note 3)
Net advances (Note 4,6,8 and 14)
Net subrogated claims (Note 5,6,8 and 14)
Net assets purchased by the Corporation (Note 6,7 and 15)
Other assets
TOTAL ASSETS (Note 14)

LIABILITIES
Accounts payable, accrued liabilities, and other (Note 16 and 17)

192,622

183,612

23,222,278

30,773,103

Estimated cost of unresolved cases (Note 6,10 and 15)

410,517

8,097,851

Estimated losses from corporate litigation (Note 6 and 11)

199,030

171,633

24,024,447

39,226,199

Contributed capital (Note 3)

59,526,884

55,523,993

Capital certificates

31,286,325

31,286,325

(90,199,391)

(90,983,672)

613,818

(4,173,354)

$24,638,265

$35,052,845

Notes payable and accrued interest (Note 9)

TOTAL LIABILITIES

EQUITY

Accumulated deficit
TOTAL EQUITY (Note 12)
TOTAL LIABILITIES AND EQUITY (Note 14)
S e e a c c o m p a n y in g n otes

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APPENDIX II

R E S O L U T IO N T R U S T C O R P O R A T IO N S T A T E M E N T S O F R E V E N U E S , E X P E N S E S A N D A C C U M U L A T E D D E F IC IT

(dollars in thousands)
Year Ended
December 31,1994

Year Ended
December 31,1993

REVENUES
Interest on advances and subrogated claims

$

$

853,396

367,751

Other interest income

8,696

12,061

Other revenue (Note 3)

52,644

48,106

914,736

427,918

1,100,133

1,010,562

78,433

72,977

(1,138,118)

(6,579,610)

90,007

102,340

TOTAL EXPENSES

130,455

(5,393,731)

NET REVENUE

784,281

5,821,649

TOTAL REVENUES

EXPENSES
Interest expense on notes issued by the Corporation
Interest expense on amounts due receiverships
Reduction in provision for losses (Note 6)
Administrative operating and other expenses (Note 2,14 and 17)

ACCUMULATED DEFICIT; BEGINNING
ACCUMULATED DEFICIT ENDING (Note 12)

(90,983,672)

(96,805,321)

($90,199,391)

($90,983,672)

Se e a c c o m p a n yin g notes

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R E S O L U T IO N T R U S T C O R P O R A T IO N S T A T E M E N T S O F C AS H FLO W S

(dollars in thousands)
Year Ended
December 31,1994

Year Ended
December 31,1993

CASH FLOWS FROM OPERATING ACTIVITIES
Cash inflows from:
Receipts from subrogated claims

$ 9,087,943

$14,577,355

6,020,467

5,836,959

Receipts of interest on advances

402,416

322,666

Receipts from asset liquidations

67,783

40,544

Receipts from other operations

64,272

44,777

(10,281,291)

(4,931,341)

Disbursements for advances

(1,977,813)

(3,241,601)

Disbursements for reimbursable expenditures

(1,077,711)

(1,446,145)

(94,434)

(95,366)

(1,050,652)

(770,709)

(28,202)

(8,225)

1,132,778

10,328,914

Contributed capital

4,032,000

34,314

Notes payable

2,300,000

4,100,000

(9,900,306)

(11,041,120)

Net Cash Used by Financing Activities

(3,568,306)

(6,906,806)

Net increase (decrease) in Cash

(2,435,528)

3,422,108

6,470,428

3,048,320

$4,034,900

$6,470,428

Repayments of advances and reimbursable expenditures

Cash outflows for:
Disbursements for subrogated claims

Administrative operating and other expenditures
Interest paid on notes payable
Disbursements for asset liquidations
Net Cash Provided by Operating Activities (Note 13):

CASH FLOWS FROM FINANCING ACTIVITIES
Cash inflows from:

Cash outflows for:
Repayment of notes payable, principal

CASH-BEGINNING
CASH-ENDING
Se e a c c o m p a n y in g n otes

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Resolution Trust Corporation Notes to Financial Statements
December 31, 1994 and 1993
1. Impact of Legislation:
The RTC, a Government Corporation, was created by the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA) to manage and resolve all troubled savings institutions that were previ­
ously insured by the Federal Savings and Loan Insurance Corporation (FSLIC) and for which a conservator or
receiver was appointed during the period January 1, 1989 through August 8, 1992. This period was extend­
ed to September 30, 1993 by the Resolution Trust Corporation Refinancing, Restructuring, and Improvement
Act of 1991 and in December 1993, the period was extended to a date not earlier than January 1,1995 nor
later than July 1, 1995 by the Resolution Trust Corporation Completion Act of 1993. A final date of June 30,
1995 has been selected by the Chairperson of the Thrift Depositor Protection (TDP) Oversight Board.
The activities of the RTC are subject to the general oversight of the Oversight Board, which was redesig­
nated the TDP Oversight Board and increased in size by the December 1991 legislation. The TDP Oversight
Board monitors the operations of the RTC, provides the RTC with general policy direction, and reviews the
RTC's performance. The seven members on the TDP Oversight Board include: the Secretary of the Treasury;
the Chairperson of the Board of Governors of the Federal Reserve System; the Director of the Office of Thrift
Supervision (OTS); the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation
(FDIC); the Chief Executive Officer of the RTC; and two independent members appointed by the President,
with the advice and consent of the Senate.
Under current law, the RTC will terminate on or before December 31, 1995. All remaining assets and lia­
bilities will be transferred to the FSLIC Resolution Fund which is managed by the FDIC. Proceeds from the
sale of such assets will be transferred to the Resolution Funding Corporation (REFCORP) for interest pay­
ments after satisfaction of any outstanding liabilities.
Source o f Funds:
The RTC is funded from the following sources: 1) U.S. Treasury appropriations and borrowings; 2) a con­
tribution from the Federal Home Loan Banks through REFCORP; 3) amounts borrowed by REFCORP which
is authorized to issue long term debt securities; 4) the issuance of debt obligations and guarantees as per­
mitted by the TDP Oversight Board; and 5) income earned on the assets of the RTC, proceeds from the sale
of assets, and collections made on claims received by the RTC from receiverships.
The Secretary of the Treasury has contributed capital of $59.5 billion to the RTC as of December 31,1994,
$18.8 billion of which was authorized by FIRREA, $30 billion of which was authorized by the Resolution
Trust Corporation Funding Act of 1991, $6.7 billion of which related to the Resolution Trust Corporation
Refinancing, Restructuring, and Improvement Act of 1991, and $4.0 billion of which related to the Resolution
Trust Corporation Completion Act of 1993 (see Note 12). The legislation signed in December 1991 autho­
rized the Secretary of the Treasury to provide an additional $25 billion in capital to the RTC for its opera­
tions through March 31,1992. These funds were received in January 1992. In April 1992, the RTC returned
$18.3 billion to the Treasury which represented funds not committed by the March 31, 1992 deadline.
In December 1993, the Resolution Trust Corporation Completion Act authorized funding of the $18.3 bil­
lion which had been returned to Treasury in 1992. Expenditure of funds in excess of $10 billion requires

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certification by the Secretary of the Treasury that certain statutory requirements have been met. In January
1994, the TDP Oversight Board received $10 billion in funds, of which $4 billion was forwarded to the
RTC. No further funds have been provided to either the TDP Oversight Board or the RTC since that time.
The RTC has also issued capital certificates of $31.3 billion to REFCORP as of December 31,1994 (see Note
12). FIRREA prohibits the payment of dividends on any of these capital certificates. The RTC is also autho­
rized to borrow directly from the Treasury an amount not to exceed in the aggregate $5.0 billion. There
have been no draws against these authorized borrowings through the end of 1994.
2. Sum m ary of Significant A ccounting P o licies:
General. These statements pertain to the financial position, results of operations and cash flows of the RTC,
and are presented in accordance with generally accepted accounting principles. These statements do not
include the reporting of assets and liabilities of closed thrifts for which the RTC acts as receiver/liquidating
agent or of thrifts in conservatorship for which the RTC acts as managing agent. However, these statements
do reflect the RTC's transactions with these thrifts. See Note 14 for more detailed information.
Allowance for Losses on Advances. The RTC recognizes an estimated loss on advances. The allowance for
losses represents the difference between amounts advanced to conservatorships or receiverships and expect­
ed repayments.
Allowance for Losses on Subrogated Claims. The RTC records as assets the amounts disbursed for assisting
and closing thrifts, primarily the amounts for insured deposit liabilities. An allowance for losses is estab­
lished against subrogated claims representing the difference between the amounts disbursed and the expect­
ed repayments. The allowance is based on the estimated cash recoveries from the assets of the assisted or
failed thrifts, net of estimated asset liquidation and overhead expenses, including interest costs.
Estimated Cost o f Unresolved Cases. The RTC records the estimated losses related to thrifts in conservator­
ship and those identified in the regulatory process as probable to fail on or before June 30, 1995.
Litigation Losses. The RTC recognizes an estimated loss for litigation against it in its Corporate, conservatorship
and receivership capacities. The RTC Legal Division recommends these estimated losses on a case-by-case basis.
Due to Receiverships—Assets Sold. The RTC establishes a contra asset account to record the amount payable
to receiverships for the purchase price of receivership assets sold to acquiring institutions in resolution trans­
actions. This is done in lieu of the receivership receiving the cash proceeds from the sale of its assets. This
contra account offsets the balance due from the receiverships for subrogated claims. The amounts that
exceed the expected recovery of subrogated claims due from the receiverships are recorded as a liability
entitled "Due to receiverships." The RTC accrues interest on the total of the contra asset and liability accounts.
National Judgments, Deficiencies and Chargeoffs Joint Venture Program. The RTC purchases assets from
receiverships, conservatorships, and their subsidiaries to facilitate the sale and/or transfer of selected assets
to several joint ventures in which the RTC retains a financial interest.
Allocation o f Common Expenses. The RTC shares certain administrative operating expenses with FDIC's
Bank Insurance Fund, FSLIC Resolution Fund, and Savings Association Insurance Fund. The administrative
operating expenses include allocated personnel, administrative, and other overhead expenses.

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Allocation ofCorporate Expenses. The RTC recovers costs incurred by the Corporation in support of liquidation/receiver­
ship activities, including a portion of administrative expenses. These costs are billed to individual receiverships
with the offsetting credits reducing the Corporation's "Administrative operating and other expenses."
Depreciation. The cost of furniture, fixtures, equipment and other fixed assets is expensed at the time of
acquisition and is reported as "Administrative operating and other expenses." This policy is a departure
from generally accepted accounting principles; however, the financial impact is not material to the RTC's
financial statements.
Cash Equivalents. The RTC considers cash equivalents to be short-term, highly liquid investments with
original maturities of three months or less. As of December 31,1994 and 1993, the RTC did not have any
cash equivalents.
Fair Value of Financial Instruments. The balances of financial instruments included in the RTC's Statement
of Financial Position approximate their estimated fair values. The values of "Net advances" and "Net sub­
rogated claims" are based on the discounted net cash flows expected to be received from those instruments.
The frequent repricing of the balances of "Due to receiverships" and the short-term nature of "Notes payable"
result in face amounts of such instruments which approximate their fair values.
Reclassifications. Certain balances in the 1993 financial statements have been reclassified for compar­
ative purposes.
3. O ffice of Inspector G en eral:
FIRREA established an Inspector General of the Corporation and authorized to be appropriated such sums
as may be necessary for the operation of the Office of Inspector General (OIG). All financial transactions
related to the O IG are included in the Corporation's financial statements.
The O IG has received $140.9 million of appropriated funds from the U.S. Treasury since it was established
of which $32.0 million relate to the Government's Fiscal Year (FY) 1995 and $34.3 million relate to FY 1994.
These funds are used to finance the activities of the O IG. Restricted amounts of $5,238,693 for FY 1994,
$3,967,087 for FY 1993, $9,213,040 for FY 1992 and $773,671 for FY 1991 are included in "Cash."
Reductions to the O IG appropriated funds resulting from obligations are recorded as "Other revenue."
Accordingly, the OIG appropriated funds were reduced by $29,108,773 and $32,339,972 during 1994 and
1993, respectively, and recorded as "Other revenue."
Disbursements of the O IG appropriated funds for expenditures are recorded as "Administrative operat­
ing and other expenses." These disbursements totalled $32,000,098 during 1994 and $34,538,230 dur­
ing 1993. As of December 31, 1994 and 1993, the unobligated OIG appropriation balances included in
"Contributed capital" were $41.7 million and $38.8 million, respectively.

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4. Net Advances (in thousands):
The RTC makes advances to receiverships and conservatorships. Advances are made to conservatorships
to provide funds for liquidity needs and to reduce the cost of funds, and to receiverships to provide
working capital. The advances generally are either secured by the assets of the conservatorship or
receivership at the time the advances were made or have the highest priority of unsecured claims. The
Corporation accrues interest on these advances which is included in the Statements of Revenues,
Expenses and Accumulated Deficit. The Corporation expects repayment of these advances, including
interest, before any subrogated claims are paid by receiverships. The advances carry a floating rate of
interest based upon the 13-week Treasury Bill rate. Interest rates charged during 1994 ranged between
3.27% and 6.25%, and between 3.13% and 3.54% in 1993. At December 31, 1994 and 1993, the
interest rates on advances were 5.97% and 3.37%, respectively.

December 31,
1994

December 31,
1993

8 1,0 8 9

$ 6 ,5 2 2 ,8 5 3

8 ,0 8 4,0 2 4

5 ,40 6 ,2 5 6

13 0 ,0 3 1

3 0 7,2 6 8

Accrued interest

1 5 4 ,1 4 0

7 3 ,1 6 5

W rite-offs at termination - advances

(20,489)

(3 ,8 15 )

(5 ,43 4,0 0 2 )

(3 ,9 8 1 ,7 1 9 )

(3 1,0 8 9 )

(9 8 6 ,14 5 )

Advances to conservatorships

$

Advances to receiverships
Reimbursements due from receiverships
and conservatorships

(Note 6 and 7 )
Allowance for losses on receivership
advances (Note 6)
Allowance for losses on conservatorship
advances (Note 6)
$ 2 ,9 6 3 ,70 4

$ 7,3 3 7 ,8 6 3

Reimbursements due from receiverships and conservatorships represent operating expenses paid by the
RTC on behalf of the receiverships and conservatorships for which repayment is expected in full. Interest
is not accrued on these reimbursements.

5. Net Subrogated Claims (in thousands):
Subrogated claims represent disbursements made by the RTC primarily for deposit liabilities. The
Corporation recognizes an estimated loss on these subrogated claims. These estimates are based in part
on a statistical sampling of receivership assets subject to a sampling error of plus or minus $0.7 billion
with a 95 percent confidence interval.
The value of assets under RTC management could be lower (or higher) than projected because general
economic conditions, interest rates and real estate markets could change. Because of these
uncertainties, it is reasonably possible that the actual losses may be higher (or lower) than the current
"Allowance for losses on subrogated claims."

Receiverships frequently sell a portion of their assets to institutions acquiring their deposit liabilities. In lieu
of the receiverships receiving cash for the sale, the purchase price of the assets sold is recorded by the
receivership as a receivable and by the RTC in a contra asset account entitled "Due to receiverships— assets
sold." This account is offset against subrogated claims expected to be collected from the receivership. The

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portion of the contra asset account, if any, in excess of expected subrogated claim recoveries is recorded as
a liability entitled "Due to receiverships." The RTC accrues interest payable to the receiverships on the total
of the contra asset and liability accounts. The rates used by the RTC to accrue interest are based upon the
Chicago FHLB Daily Investment Deposit Rates. Interest rates paid during 1994 ranged between 2.73% and
5.91%, and between 2.50% and 3.64% in 1993. At December 31, 1994 and 1993, the interest rates paid
on these accounts were 5.90% and 2.79%, respectively.

December 31,
1994
Subrogated claims

$22 2,450 ,88 9

Recovery of subrogated claims

(12 9 ,0 4 2 ,8 15 )

Claim s of depositors pending and unpaid

December 31,
1993
$ 2 0 8 ,3 3 1,4 0 6
(1 1 5 ,5 6 6 ,7 8 1 )

10,90 5

1 7,5 4 0

( 7 1 6 ,1 9 7 )

(639,585)

(7 3 ,3 4 0 ,0 74 )

W rite-offs a t termination - subrogated claims

(2 ,3 16 ,6 5 1)

(1,9 8 4 ,4 3 5 )

Due to receiverships— assets sold

(6 8 ,6 6 7,8 8 2 )

(Note 6 and 7 )
Allowance for losses on subrogated claims (Note 6)

$ 1 7 ,3 7 8 ,2 7 3

$ 2 1 ,1 5 8 ,0 4 7

6 . C h a n g e s in A l l o w a n c e f o r Lo s s e s (in t h o u s a n d s ) :
Allowance for
losses on
subrogated claims

Allowance for
losses on
advances

Allowance for
losses on
corp assets

Balance, Dec. 31,1992

$67,262,634

$4,280,111

$11,225

Provisions (reductions)

62,377

687,992

5,025

Write-offs at termination
(Note 7)

Estimated cost
of unresolved
cases

Estimated losses
from corporate
litigation

TOTAL

$16,858,857

$375,375

$88,788,202

(7,131,262)

(203,742)

(6,579,610)

(286,873)

(239)

1,629,744

-

Balance, Dec. 31,1993

68,667,882

4,967,864

16,250

8,097,851

171,633

81,921,480

Provisions (reductions)

(9,124)

(1,355,849)

27,397

(1,138,118)

Cost of Resolutions

(314,443)

513,901

Write-offs at termination
(Note 7)

(1,344,850)
6,331,485

-

$73,340,074

$5,465,091

_________ ____

(1,629,744)

Balance, Dec. 3 1 ,1 9 9 4

0

-____

(16,674)

Cost of resolutions

(287,112)

(1,361,524)

0

(6,331,485)
$ 7,12 6

$ 4 10 ,5 17

$199,030

$79,421,838

The "Allowance for losses on subrogated claims" includes future interest costs and overhead expenses.
Total "reductions" in loss allowances contain the offset of net interest costs incurred in the current period
that were previously included in provisions. "Cost of resolutions" represents amounts transferred from
"Estimated cost of unresolved cases" to "Allowance for losses on subrogated claims" as a result of case
resolutions in each year.

I FRASER
Digitized for 9 9 i I I 1 1 I I X E P 1 R T


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APPENDIX II

7. Net Assets Purchased by the Corporation (in thousands):
In order to pay a final dividend to the receiverships' creditors and to expedite the process of legally
terminating the receivership entities, the RTC has purchased the remaining assets of selected
receiverships. As of December 31, 1994, the RTC had purchased assets from 161 receiverships for
$295 million (assets from 77 receiverships for $173 million at December 31, 1993). Upon termination,
the RTC may realize a loss on advances and subrogated claims that was previously included in the
respective allowances and recognized in the provision for losses in a prior year. Additionally, as of
December 31, 1994, the RTC had purchased assets from receiverships, conservatorships, and their
subsidiaries for $101 million to facilitate the sale and/or transfer of selected assets to several joint
ventures in which the RTC retained a financial interest.

Decem 31,
ber
1993

Decem 31,
ber
1994

$ 1 7 3 ,0 7 5

Assets in liquidation purchased

$ 3 9 6 ,3 77

Sales, collections and adjustments

(15 4 ,15 4 )

(80,438)

( 7 ,1 2 6 )

(16 ,2 5 0 )

Allowance for losses on corporate assets (Note 6)

$ 7 6 ,3 8 7

$ 2 3 5 ,0 9 7

Assets purchased include mortgage loans backed by 1-4 family homes, multi-family dwellings or commer­
cial real estate; consumer loans; real estate; and other assets including receivership interests in credit enhance­
ment reserve funds created when receiverships participated in RTC loan securitizations.
8 . Concentration of C red it R isk:
The RTC has receivables from conservatorships and receiverships located throughout the United States
which are experiencing problems with both loans and real estate. Their ability to make repayments to
the RTC is largely influenced by the economy of the area in which they are located. The gross balance
of these receivables at December 31, 1994 is $101.9 billion (against which $81.5 billion of reserves
and contra assets have been recorded). O f this total, $26.6 billion is attributable to institutions located
in Texas, $17.0 billion is attributable to institutions located in California, $7.7 billion is attributable to
institutions located in Florida and $6.0 billion is attributable to institutions located in Arizona.
9. Notes Payable and A ccrued Interest:
Working capital has been made available to the RTC under an agreement between the RTC and the
Federal Financing Bank. The working capital is available to fund the resolution of thrifts and for use in
the RTC's high-cost funds replacement and emergency liquidity programs. The outstanding notes
mature at the end of each calendar quarter, at which time they are generally refinanced at similar
terms. Payments on the note balance may also be made during each calendar quarter. The notes
payable carry a floating rate of interest established by the Federal Financing Bank and ranged between
3.17% and 5.03% during 1994 and between 2.88% and 3.27% in 1993. As of December 31, 1994
and 1993, the RTC had $23.2 billion and $30.8 billion, respectively, in borrowings and accrued
interest outstanding from the Federal Financing Bank. These borrowings, approved by the TDP
Oversight Board, are within the limitations imposed under FIRREA.
10. Estim ated Cost of U nresolved Cases:
The RTC has established a liability of $411 million at December 31,1994 for the anticipated costs of
resolving 4 troubled institutions. O f the 4 institutions, 1 was in conservatorship as of that date. The

R E S E A R C H L IB R A R Y

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APPENDIX II

other 3 institutions were identified by the OTS as institutions for which it is probable that government
assistance may be required on or before June 30, 1995 which is the last date the RTC may be
appointed conservator.
The 1994 "Estimated cost of unresolved cases" has declined from the December 31,1993 estimate of
$8.1 billion. The primary reason for this decline was the resolution of cases during 1994 leaving fewer
unresolved cases at the end of the year.
Furthermore, the value of assets anticipated to come to the RTC could be lower (or higher) than projected
because general economic conditions, interest rates, and real estate markets could change. Because of these
uncertainties, it is reasonably possible that the cost of unresolved cases will be higher (or lower) than what
has been estimated.

1 1 . Estim ated Losses fro m C o rp o ra te Litig atio n :
As of December 31, 1994, the RTC has been named in several thousand lawsuits while serving in its
Corporate, conservatorship or receivership capacities. Currently, it is not possible to predict the
outcome for all of the various actions. An allowance for loss totalling $199.0 million has been
established as of December 31, 1994 for the 57 actions that management feels are probable to result in
a significant loss ($171.6 million at December 31, 1993 for 40 actions). Additionally, the Corporation
could possibly incur further losses of up to $1 billion from other pending lawsuits and other yet
unasserted claims.

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APPE(VIIIX II

12. Changes in Equity (in thousands):

Total
Equity

Contributed
Capital
Balance, Dec. 3 1 ,1 9 9 2

1993 N e t revenue
FY 94 OIG appropriation
1993 Obligated OIG funds
Balance, Dec. 3 1 ,1 9 9 3

19 9 4 Net revenue

Capital
Certificates

Accumulated
Deficit

$ 5 5 ,5 2 2 ,0 19

$ 3 1,2 8 6 ,3 2 5

$ (9 6 ,8 0 5 ,3 2 1)

-

-

5 ,8 2 1,6 4 9

5 ,8 2 1,6 4 9

3 4 ,3 14

-

-

3 4 ,3 14

(32,3 40)

-

-

(32,3 40)

$ (9 ,9 9 6 ,9 77)

(9 0 ,9 8 3 ,6 72 )

(4 ,1 7 3 ,3 5 4 )

5 5 ,523,993

3 1,2 8 6 ,3 2 5

-

-

7 8 4 ,2 8 1

7 8 4 ,2 8 1

4,00 0 ,00 0

.

.

4,00 0 ,00 0

32,0 00

-

-

32,000

(2 9 ,10 9 )

-

-

(2 9 ,10 9 )

Resolution Trust Corporation
Completion A ct of 1993
FY 95 O IG appropriation
19 9 4 Obligated OIG funds

Balance, Dec. 3 1 ,1 9 9 4

f1

11

1

111 ( 1 n 1 ( i f i m



$ 5 9,5 26 ,8 84

$ 3 1,2 8 6 ,3 2 5

$ (9 0 ,19 9 ,3 9 1)

R n 1 1 1 1 1 1 1

$

6 1 3 ,8 1 8

T r i j t f • 1 ( 1 i 1 i1 o i

APPENDIX II

13. Supplem entary Inform ation Relating to the Statem ents of Cash Flows
(in thousands):
Reconciliation of net revenue to net cash provided by operating activities:

For the Years Ended
December 31,
December 31,
1994
1993
$

5 ,8 2 1,6 4 9

N et Revenue

$ 7 8 4 ,2 8 1

Reduction in provision for losses

( 1 ,1 3 8 ,1 1 8 )

(6 ,5 79 ,6 10 )

-0 -

2 7 8 ,9 7 5

Increase (decrease) in accrued interest on notes payable

4 9 ,4 8 1

(3 9 ,12 2 )

Increase in accrued interest on am ounts due to receiverships

78 ,4 3 3

7 2 ,9 7 7

Interest expense financed as additional notes payable

Increase in accrued interest due from advances

(2 0 0 ,75 8 )

(35,033)

Receipts from subrogated claims

9 ,0 8 7,9 4 3

1 4 ,5 7 7 ,3 5 5

Repayments of advances and reimbursable expenditures

6 ,0 2 0 ,4 6 7

5,836,959

Receipts from asset liquidations

6 7 ,7 8 3

4 0 ,5 4 4

Increase (decrease) in accounts payable, accrued liabilities and other

5 7,2 3 9

(56,628)

( 1 9 ,8 7 7 )

55,290

(Increase) decrease in reimbursable portion of liabilities above

( 1 ,9 7 7 ,8 1 3 )

( 3 ,2 4 1 ,6 0 1 )

( 1 0 ,2 8 1 ,2 9 1 )

( 4 ,9 3 1 ,3 4 1 )

( 1 ,0 7 7 ,7 1 1 )

( 1 ,4 4 6 ,1 4 5 )

Disbursem ents for asset liquidations

(28 ,2 0 2 )

(8,225)

OIG income recognized

(2 9 ,10 9 )

(32,3 40)

Disbursem ents for advances
Disbursem ents for subrogated claims
Disbursem ents for reimbursable expenditures

Interest accrued on subrogated claims
Other non-cash (income) and expenses (net)
(Increase) decrease in other assets

N cash provided by operating activities
et

(235,083)

-0 -

( 2 4 ,7 9 7 )

8 ,5 94

(90)

6 ,6 16

$1,132,778

$ 10,328,914

Noncash transactions incurred from thrift assistance and failures:
■ $6,331,485 and $1,629,744 were reclassified from "Estimated cost of unresolved cases" to "Allowance
for losses on subrogated claims" during 1994 and 1993, respectively, due to the resolution of 64 cases dur­
ing 1994 and 27 cases in 1993.
■ "Due to receiverships—assets sold" decreased by $1,020,715 and $62,157 in 1994 and 1993, respec­
tively, with offsetting decreases of $900,933 and $61,364 to "Advances to receiverships" and of $119,782
and $793 to "Accrued interest" to repay receivership advances and related interest.
■ $0 and $278,975 of interest expense was financed through increases in notes payable in 1994 and 1993,
respectively.

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PEMIIX II

■ "Recovery of subrogated claims" increased by $4,406,990 and $7,602,027 during 1994 and 1993, respec­
tively, with an offsetting decrease in "Due to receiverships—assets sold" to record liquidating dividends
declared by receiverships.
■ "Subrogated claims" increased by $4,060,927 and $2,983,857 in 1994 and 1993, respectively, resulting
from resolution activity with an offsetting increase in "Due to receiverships—assets sold."
■ "Due to receiverships" decreased by $11,334 and $15,715 in 1994 and 1993, respectively, with the off­
set to "Due to receiverships—assets sold" (a component of "Net subrogated claims") for amounts exceed­
ing the expected recovery of subrogated claims due from the receiverships.
■ "Reimbursements due from receiverships and conservatorships" decreased by $130,573 and $89,272
during 1994 and 1993, respectively, with an offsetting decrease to "Due to receiverships—assets sold."
■ "Due to receiverships—assets sold" increased by $122,214 and $31,280 in 1994 and 1993, respective­
ly, with an offsetting increase to "Net assets purchased by the Corporation" relating to the purchase of
receivership assets by the Corporation.
14. Related Party Transactions:
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 established the RTC to
manage and resolve failed savings institutions that were formerly insured by the FSLIC and for which a
receiver or conservator was appointed after January 1, 1989. At December 31,1994, there were 745
institutions with $40.4 billion of assets for which the RTC was appointed conservator or receiver. This
compares to 743 institutions with $75.7 billion of assets at December 31, 1993.
In its fiduciary capacity as receiver or conservator, the RTC has substantial control over the operations of
the institutions placed in receivership or conservatorship by the OTS. The RTC, as receiver or conservator,
has ultimate authority in the day-to-day operations, including the timing and methods of the disposal of the
institutions' assets in an effort to maximize returns on such assets.
The RTC does not include the assets and liabilities of the receiverships and conservatorships in its financial
statements. However, certain transactions with these institutions, including advances to and receivables from
the institutions, as well as interest paid or received on such items, are included in the RTC's financial records.
At December 31,1994, the net balances of advances and subrogated claims were $3.0 billion and $17.4 bil­
lion (net of "Due to receiverships—assets sold" of $0.7 billion), respectively. The RTC owed $0.7 billion to
receiverships, including the liability account of $2 million, at December 31, 1994 resulting from resolution
transactions (see Note 5). Interest income earned on advances and subrogated claims was $853 million dur­
ing the year ended December 31,1994 and interest expense on amounts due receiverships was $78 million.
At December 31, 1993, the net balances of advances and subrogated claims were $7.3 billion and $21.2
billion (net of "Due to receiverships— assets sold" of $2.3 billion), respectively. Total amounts due receiver­
ships were $2.3 billion, including the liability account of $13 million. Interest income on advances and sub­
rogated claims was $368 million during the year ended December 31,1993 and interest expense on amounts
due receiverships was $73 million.
RTC receiverships and conservatorships are holders of limited partnership equity interests as a result of various
RTC sales programs which include the National Land Fund, Multiple Investor Funds, N-Series and S-Series pro­
grams. Through 1994, the RTC sold $7.1 billion of loans through these programs ($5.2 billion through 1993).

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APPENDIX II

The RTC funds the activities of the TDP Oversight Board based on its fiscal year budgets. The amounts fund­
ed in 1994 and 1993 were $5.2 million and $5.1 million, respectively. These amounts are subject to the
Corporation's policy of allocating corporate expenses to the receiverships.
"Administrative operating and other expenses" for the Corporation were $90.0 million and $102.3 million
for the years ended December 31, 1994 and 1993, respectively (total costs of $848.3 million and $933.0
million less $758.3 million and $830.7 million billed back to receiverships during 1994 and 1993, respec­
tively). The Corporation bears the costs of administrative expenses for the assets purchased from receiver­
ships in the termination process since they are managed by the Corporation (see Note 7).

15. Commitments and Guarantees:
S e c u r it iz a t io n C r e d it R e s e r v e s :

Through 1994, the RTC sold through its mortgage-backed securities securitization program $39.2 billion of
receivership, conservatorship and Corporate loans ($36.6 billion through 1993). The loans sold were secured
by various types of real estate including 1-4 family homes, multi-family dwellings and commercial real
estate. Each securitization transaction is accomplished through the creation of a trust, which purchases the
loans to be securitized from one or more institutions for which the Corporation acts as a receiver or con­
servator or purchases loans owned by the Corporation. The loans in each trust are pooled and stratified and
the resulting cash flow is directed into a number of different classes of pass-through certificates. The regu­
lar pass-through certificates are sold to the public through licensed brokerage houses. RTC and its receiver­
ships and conservatorships retain residual pass-through certificates which are entitled to any remaining cash
flows from the trust after obligations to regular pass-through holders have been met.
To increase the likelihood of full and timely distributions of interest and principal to the holders of the reg­
ular pass-through certificates, and thus the marketability of such certificates, a portion of the proceeds from
the sale of the certificates is placed in credit enhancement reserve funds (reserve funds) to cover future cred­
it losses with respect to the loans underlying the certificates. The reserve funds' structure limits the receiver­
ships', conservatorships' or Corporation's exposure from credit losses on loans sold through the RTC
securitization program to the balance of the reserve funds. The initial balances of the reserve funds are deter­
mined by independent rating agencies and are subsequently reduced for claims paid and recovered reserves.
Through December 1994, the amount of claims paid was approximately 6% of the initial reserve funds. At
December 31, 1994 and 1993, reserve funds related to the RTC securitization program totalled $7.0 bil­
lion and $6.7 billion, respectively. RTC management expects to recover a substantial portion of the reserve
funds over time. The RTC estimates Corporate losses related to the receiverships' reserve funds as part of
the RTC's allowances for losses. Additionally, the RTC estimates Corporate losses related to conservator­
ships' reserve funds as part of the RTC's "Estimated cost of unresolved cases." As of December 31,1994,
the RTC included $ 1.7 billion in these provisions to cover future estimated losses on the reserve funds ($1.5
billion as of December 31,1993). As of December 31,1994, the provisions were offset by $0.6 billion, the
market value of the residual pass-through certificates ($0.8 billion as of December 31,1993).
R e p r e s e n t a t io n s

and

W

a r r a n t ie s :

The RTC has provided guarantees, representations and warranties on approximately $98 billion in unpaid
principal balance of loans sold and approximately $151 billion in unpaid principal balance of loans under
servicing right contracts which have been sold. In general, the guarantees, representations and warranties on
loans sold primarily relates to the completeness and accuracy of loan documentation, the quality of the under­
writing standards used, the accuracy of the delinquency status when sold, and the conformity of the loans

 l l l l R E MI T
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(llilMil

STIUIEIM

Q

APPENDIX II

with characteristics of the pool in which they were sold. The representations and warranties made in con­
nection with the sale of servicing rights are limited to the responsibilities of acting as a servicer of the loans.
For loans which were sold through the securitization program or for which the sales terms provided corporate guar­
antees, the receiverships and conservatorships who sold the loans have established escrow accounts containing a por­
tion of the sales proceeds to honor any obligations that might arise from the guarantees, representations and warranties.
The RTC estimates Corporate losses related to the receiverships' representations and warranties claims as
part of the RTC's allowances for losses. Additionally, the RTC estimates Corporate losses related to the con­
servatorships' representations and warranties claims as part of the RTC's "Estimated cost of unresolved cases."
The Corporation has also established a liability for the estimate of losses related to representations and war­
ranties claims associated with loan sales that involved corporate purchased assets (see Note 7).
As of December 31, 1994, the RTC included $1.2 billion in these provisions to cover the estimated costs of
representations and warranties claims ($1.2 billion as of December 31, 1993).
Letters

of

C r e d it :

The RTC has adopted special policies for outstanding RTC conservatorship and receivership collateralized
letters of credit. These policies enable the RTC to minimize the impact of its actions on capital markets. In
most cases, these letters of credit are used to guarantee tax exempt bonds issued by state and local housing
authorities or other public agencies to finance housing projects for low and moderate income individuals
or families. As of December 31, 1994, the RTC has issued a commitment to honor approximately $1.0 bil­
lion of these letters of credit. The Corporation has also established a liability for the estimate of losses relat­
ed to letters of credit in the amount of $275 million.
A f f o r d a b l e H o u s in g P r o g r a m :

As part of its Affordable Housing Program, RTC management has committed to expend up to $6 million to
pay reasonable and customary commitment fees to various state and local housing authorities who will, in
turn, assist in providing financing to low and moderate income families. Under this program, the RTC works
with state and local housing finance agencies to secure commitments of Mortgage Revenue Bond and
Mortgage Credit Certificate funds which will be lent to qualifying families to enable them to purchase prop­
erties from the RTC. At December 31, 1994, $2.1 million remains unexpended. No substantial recoveries
are anticipated from the program.
R e n t a l Ex p e n s e :

The RTC is currently leasing office space at several locations to accommodate its staff. As of December 31,
1994, these offices include: (1) the Washington, D.C. Headquarter offices, (2) the six megasite offices, and
(3) the three satellite offices located throughout the country. Additional satellite offices have been closed,
but the RTC remains obligated for the remainder of their lease terms pending negotiations for lease buyouts
or subleases. These obligations total $0.2 million. The RTC's rental expense for 1994 and 1993 totalled $49.8
million and $59.5 million, respectively. The RTC's total contractual obligations under lease agreements for
office space are approximately $94.4 million. These agreements often contain escalation clauses which can
result in adjustments to rental fees for future years. The minimum yearly rental expense for all locations is as
follows (in thousands):
1995

Q Q

(


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1996

1997

1998

1999

2000/Thereafter

$37,823

$16,982

$6,616

$7,069

$7,069

$18,851

s1 1 1 1 1 1 1 1 s

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APPENDIX II

Lease obligations for 1997 and beyond are exclusively for the RTC headquarters building in Washington,
D.C. This lease was entered into by the now defunct FSLIC in 1987. At the date of RTC's termination, which
under current law shall not be later than December 31, 1995, all of the RTC's debts, obligations and assets,
including the above lease obligations, shall be transferred to the FSLIC Resolution Fund which is managed
by the FDIC.
16. Pension Plan and A ccrued Annual Leave:
The FDIC eligible employees assigned to the RTC are covered by the Civil Service Retirement System and
the Federal Employees Retirement System. Employer contributions provided by the RTC for all eligible employ­
ees for the years ended December 31, 1994 and 1993 were approximately $18.4 million and $16.9 mil­
lion, respectively.
Although the RTC contributes a portion of pension benefits for eligible employees and makes the neces­
sary payroll withholdings from them, the RTC does not account for the assets of either of these retirement
funds and does not have actuarial data with respect to accumulated plan benefits or the unfunded liabili­
ty relative to its eligible employees. These amounts are reported by the U.S. Office of Personnel Management
(OPM) and are not allocated to the individual employers. OPM also accounts for Federal health and life
insurance programs for those RTC retired eligible employees who had selected Federal government spon­
sored plans.
The RTC's liability to employees for accrued annual leave was approximately $24.8 million at December
31, 1994, and $20.2 million at December 31, 1993.
17. H ealth, D ental and Life Insurance Plans for Retirees:
The RTC, through its association with the FDIC, provides certain health, dental and life insurance cover­
age for its eligible retirees, the retirees' beneficiaries and covered dependents. Eligible retirees are those
who have elected the FDIC's health and/or life insurance programs and are entitled to an immediate annu­
ity (dental coverage is automatic at retirement). The health insurance coverage is a comprehensive fee-forservice program, with hospital coverage and a major medical wraparound. Corporate contributions for
retirees are the same as those for active employees. Premiums are paid to the FDIC, where they are held
until plan fixed costs and expenses are paid. The life insurance program provides for basic coverage at no
cost and allows converting optional coverages to direct-pay plans. The cost of providing this benefit is not
separable from the cost of providing benefits for active employees, as the charge for retirees is built into
rates for active employees.
The RTC recorded charges of $6.9 million and $13.8 million for the current periodic cost, for 1994 and
1993, respectively. All amounts have been reflected in the "Administrative operating and other expenses"
line of the Statements of Revenues, Expenses and Accumulated Deficit.

I >M

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PEN III X II

The net periodic postretirement benefit cost for 1994 and 1993 included the following components
(in millions):

1994
$ 7 .2

Interest cost on accumulated postretirement benefit obligations
Net amortization and deferral

$ 8.5

4 .1

Service cost, benefits attributed to employee service during the year

1993

4 .4
.9

(1.4 )

Return on plan assets

(3.0)

Net periodic postretirement benefit cost

.0
$6.9

$ 13 .8

The RTC, as a government corporation scheduled under current law to terminate on or before December
31, 1995, decided, in conjunction with the FDIC, that the liability for postretirement benefits for eligible
employees assigned to the RTC will be recorded on the books of the FDIC. The RTC pays the FDIC an amount
equal to the RTC's obligation. In return, the FDIC agrees to pay the costs associated with postretirement ben­
efits due to eligible employees assigned to the RTC upon their retirement. As of December 31, 1994, the
RTC has included as a current liability on its Statement of Financial Position an amount equal to $6.1 mil­
lion for a revised 1994 net periodic postretirement cost ($5.2 million as of December 31, 1993).
The discount rate used in the calculation of the postretirement benefit obligation was 6.0% in 1994 (6% in
1993). The assumed medical inflation trend in 1994 was 12.5% (14% in 1993), decreasing to an ultimate
rate of 8.0% in 1998 and remaining at that level thereafter. The dental cost trend rate in 1994 and thereafter
was 8.0%. Both the assumed discount rate and health care cost trend rates have a significant effect on the
amount of the obligation and periodic cost reported.
If the health care cost trend rate was increased one percent, the accumulated postretirement benefit oblig­
ation for health care benefits as of December 31,1994 would have increased $15.3 million, or 26.2% ($17.8
million, or 27.3% as of December 31, 1993). Additionally, a one percent increase would have increased
the aggregate service and interest costs of the 1994 net periodic postretirement health care benefit cost by
$2.9 million, or 29.9% ($3.7 million, or 31.7% of the 1993 cost).

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M anagem ent's Report on In te rn a l Controls

RTC
RESOLUTION

TRUST

APPENDIX

CO RPO RATIO N

Resolving The Crisis
Restoring The Confidence

Chief Financial Officer

1994 Management Report on Internal Controls
Corporate Internal Control Objective
The Resolution Trust Corporation (RTC) maintains an internal control system which is designed to provide reason­
able assurance that:
• assets are safeguarded against loss from unauthorized acquisition, use or disposition;
• transactions are executed in accordance with management's authority and with laws and regulations; and
• transactions are properly recorded, processed, and summarized in accordance with generally accepted
accounting principles and to maintain accountability for assets.
The Thrift Depositor Protection Oversight Board (TDPOB) issued a policy statement on internal controls dated
July 25, 1991, encouraging the RTC to establish and adhere to internal control standards that are no less strin­
gent than those required of certain agencies pursuant to the Federal Managers' Financial Integrity Act of 1982
(FMFIA) and to vest in its Chief Financial Officer powers substantially similar to those provided in the Chief
Financial Officers Act of 1990.
To meet the TDPOB's expectations, the internal control system established by RTC includes a documented
organizational structure, division of responsibility, and established policies and procedures. The corporate
policy sets a positive tone for the organization and is intended to influence the control consciousness of
RTC personnel.
Internal Control Program Activity
The RTC has continuously enhanced its internal control system, reinforced its commitment to promote and
encourage internal control program activity and taken major steps to measurably improve internal controls
throughout the Corporation.
Over the life of the Corporation, formal internal control and audit follow-up program directives were imple­
mented, automated systems and procedures for tracking internal control weaknesses and audit findings were
developed, management training sessions and conferences were held, additional resources were allocated to
field internal control components, enhanced coordination was effected between field and headquarters, a
proactive program of assessing internal controls was developed and a comprehensive internal control review
initiative was completed.
During 1994, the Corporation's objectives were to build on past successes by managing and maintaining its
existing programs, by continuing to aggressively pursue its internal control and review activity and to begin
planning for RTC's downsizing and consolidation with the Federal Deposit Insurance Corporation (FDIC) in a
manner that preserves accountability and fiscal integrity.

801 17th Street, NW, Washington, DC 20434-0001
1

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Tel. (202) 416-7221 Fax (202) 416-7226
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APPENDIX III

In 1994, RTC program managers completed 85 internal control and program compliance reviews covering all
major programs and financial management systems. The reviews monitored compliance with corporate poli­
cies and the adequacy of internal control objectives and techniques. Also during 1994, the GAO issued a total
of 11 reports resulting from its audits and reviews of RTC operations and financial statements, and the RTC's
OIG issued a total of 158 reports on its audits and reviews.
Management's Assertion
Management acknowledges its responsibility for establishing and maintaining an effective system of internal
control. During the year, management evaluated the Corporation's internal control system to determine
whether it achieved its objectives. The evaluation was based on the control criteria established under FMFIA,
federal directives and applicable policy statements of the TDPOB. Based on that evaluation, management
believes that the Corporation's internal control system as of December 31, 1994, was effective in safeguarding
material assets against loss from unauthorized acquisition, use, or disposition; assuring the execution of transac­
tions in accordance with management's authority and material laws and regulations; and assuring that there
were no material misstatements in the financial statements.
There are, however, inherent limitations in the effectiveness of any internal control system, including the possi­
bility of human error and the circumvention or overriding of controls. Accordingly, even the most effective
internal control system can provide only reasonable assurance with respect to safeguarding of assets against
unauthorized acquisition, use or disposition, compliance with laws and regulations, and financial statement
preparation. Furthermore, the effectiveness of an internal control system can change with circumstances.
It should be noted that, notwithstanding management's overall conclusion on the adequacy of RTC's system of
internal control, high risk areas and control weaknesses were identified and disclosed through internal control
reviews undertaken in 1994. However, management does not consider the high risk areas and control weak­
nesses disclosed to be material in relation to the financial statements. Through December 31, 1994, the high
risk areas and control weaknesses, along with the status of corrective actions taken or proposed, were disclosed
in the Corporation's 1994 Internal Control Report to the TDPOB dated March 31, 1995.

Q |
f I I
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\

1

R e s • 1 t 111 I n n

( 11 m 1 1 1 1 1 1

Comments From llie Resolution T r u s t Corporation

RTC
RESOLUTION

TRUST

APPENDI X IV

CO RPO RATIO N

Resolving The Crisis
Restoring The Confidence

Chief Financial Officer

June 12, 1995

The Honorable Charles A. Bowsher
Comptroller General of the United States
United States General Accounting Office
Washington, D.C. 20548
Re: Financial Audit— Resolution Trust Corporation
1994 and 1993 Financial Statements_________
Dear Mr. Bowsher:
We appreciate being given the opportunity to respond to the General Accounting Office (GAO) draft report of
the Resolution Trust Corporation's (RTC) 1994 and 1993 financial statements prior to its issuance. We are
pleased that the GAO has concluded that the statements are reliable in all material respects, and that the objec­
tive of the RTC in receiving an unqualified audit opinion for the year ended December 31, 1994, has been met.
We also appreciate that the GAO has concluded that management fairly stated that RTC's system of internal
controls provides reasonable assurance that losses, non-compliance, or misstatements material in relation to the
financial statements would be prevented or detected on a timely basis. Additionally, we note that the GAO
found no reportable instances of non-compliance with laws or regulations during the course of the audit. We
acknowledge the positive comments by the GAO related to the progress made by the RTC in addressing and
correcting the internal control weaknesses identified in prior GAO financial audits. In that regard, we wish to
express our appreciation to the GAO for the assistance and guidance provided in achieving that progress.
Throughout the period from its original formation to the end of the fiscal period covered by the GAO audit, the
RTC has expended substantial effort in addressing the operational deficiencies such as those which were docu­
mented in the 1992 GAO report (HR93-4). In that report, the RTC was designated as "high risk" because of cer­
tain operational weaknesses, concern associated with its resolution activities, and potentially insufficient funding
levels. Since the issuance of the 1992 report, additional funding has been provided by the Congress. Further,
progress has been made by the RTC in implementing mandated management reforms, enhancing internal con­
trols and improving its general operating procedures. We are, therefore, pleased that the GAO has removed the
"high risk" designation from the RTC.
The RTC is now focused on issues associated with transition of operations to the FDIC, and we are confident
that satisfactory results will be achieved in meeting this major responsibility.

801 17th Street, NW, Washington, DC 20434-0001

DM

11
 1 I i I R I M I T


Tel. (202) 416-7221 Fax (202) 416-7226
f I I I I ( I I I

ST I T I

I I I I S

APPENDIX IV

The following addresses the remaining significant matters and the reportable condition identified in the GAO
draft audit report for 1994:
SIGNIFICANT MATTERS
1)

Uncertainties could affect estimated recoveries from receivership assets.

We concur with GAO's assessment that changes in general economic conditions, interest rates and real estate
markets could affect the final cost of resolving failed institutions.
Given the present economic circumstances, we are confident that through December 31, 1995, the assump­
tions used in estimating the recoveries on assets, and the bases for reserve requirements for future credit losses
on securitizations and for established reserves for claims arising from representations and warranties are appro­
priate. We agree that any significant changes in disposal strategies or valuation methodologies by the FDIC,
following sunset of the RTC, may change financial asset valuations used for subsequent accounting periods.
However, because of the expected reduction in the size of the remaining portfolio of assets and the existing
level of corporate reserves, these uncertainties will become less of a substantive exposure.
2)

Funding and current status of the corporation.

We are satisfied that the estimated $90.2 billion at year end 1994 in total loss funding needed compares favorably
with the estimated funding requirements of $92.0 billion as of December 31, 1993. We expect little change in
the amount of the current estimates or the related methodology to be used during fiscal year 1995. Further, a joint
effort is presently underway in cooperation with the FDIC to review additional funding needed to dispose of the
Corporation's assets and settle liabilities remaining after the RTC ceases operations.
We concur that the level of uncertainties, as noted above, exist as to the actual financial outcome of RTC oper­
ations. Certain economic factors could affect the recovery value of the remaining assets. Similarly, other factors
could influence the final funding requirements of the RTC through changes in assumptions as to future reserve
and/or contingency requirements.
3)

Controls over contracting could affect recoveries from receiverships.

We concur with the observation in your draft report that the RTC continues to deal with the effects of contract­
ing problems associated with the early years of its operation. As discussed in our prior year commentary on this
issue, the RTC established a number of corporate initiatives and enhanced certain operating procedures to
ensure that appropriate control and oversight would exist within our ongoing contracting operations. To deal
with the historical problems associated with this corporate function, we have encouraged and supported the
efforts of the RTC's Office of the Inspector General and the Office of Contractor Oversight and Surveillance in
assisting RTC management in identifying and resolving these historical problems.

f

Q Q
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R

f S

I I

I I

I O II I S T
T

( I I H

I

I I II I

A Y I’ E Nil I X

REPORTABLE CONDITION
t.

Computerized Information System controls.

We concur with the GAO report that additional actions are needed in order for the RTC to rely more fully on
the automated systems it currently uses in its daily activities. During the past year the RTC has:
A)

developed and implemented operational changes to resolve the issues of control identified in the
1993 financial audit report issued by the GAO;

B) responded to and implemented the significant changes and improvements mandated for our
Information Systems operation by the Resolution Trust Corporation Completion Act of December 1993;
and
C) implemented many changes to correct the control weaknesses identified in January 1995 as a result of
the current annual audit effort.
It is our expectation that actions taken and those planned will serve to correct remaining control weaknesses in
the near term. Further, it is our understanding that agreement has been reached on the resolution of all these
issues between the GAO and the RTC.
Please contact me if any further RTC assistance may be provided by this office.

I M 4
 l l l l l l


Sincerely,

Donna H. Cunninghame

RR (MT

F I I I I (Ii 1

S T I T E M E I T S

IV







STATISTICS

STATISTICS

RTC Conservatorships
January 1,1994, through December 31,1994

State

Associations in
Conservatorship
December 31,1993

Associations Placed
into Conservatorship
January 1 , 1994-December 31,1994

Conservatorship Resolutions
January 1 , 1994-December 31.1994
P&A
Payoff
Total

Associations in
Conservatorship
December 31,1994

ALABAM
A

1

0

1

0

1

0

CALIFO IA
RN

8

0

5

3

8

0

CO N
N ECTICU
T
FLO A
RID

1

0

1

0

1

0

10

0

10

0

10

0

G RG
EO IA

2

0

2

0

2

0

ILLIN IS
O

2

0

2

0

2

0

IO A
W

1

0

1

0

1

0

KAN
SAS

2

0

2

0

2

0

LO ISIAN
U
A

4

0

4

0

4

0

M IN
A E

1

0

1

0

1

0

M RYLAN
A
D

4

0

4

0

4

0

M
ASSACHUSETTS

2

0

2

0

2

0

M
ISSISSIPPI
N HAM IRE
EW
PSH

1

0

1

0

1

0

1

0

1

0

1

0

N JERSEY
EW

7

0

6

0

6

1

N YO
EW RK

1

0

1

0

1

0
0

O IO
H

1

0

1

0

1

O O
REG N

1

0

1

0

1

0

PEN SYLVAN
N
IA

3

0

3

0

3

0
0

RH D ISLAN
OE
D

1

0

1

0

1

SO THCARO A
U
LIN

2

0

2

0

2

0

TENNESSEE

1

0

1

0

1

0

6

0

6

0

6

0

63

0

59

3

62*

1

I I 11 I

( » I f I 1 I I II I

VIRG IA
IN
Total

*Does not include 2 non-conservatorship institutions resolved under the Accelerated Resolutions Program
.
N P&A-purchase and assum
ote:
ption; Payoff-insured deposit payoff.

QQ S

TI
 T I I T I( J


K ES I II T I I I

RTC Resolutions

STATISTICS

January 1,1994, through December 31,1994
(dollars in thousands)

Date of

--n nSM
--*
. M *i-— n iti»

R k o M R m1 RaRM Of MSUIb Ui M 8M LOCnKM
25 Feb
25 Feb
25 Feb
4 Mar
11 Mar
11 Mar
11 Mar
11 Mar
18 Mar
18 Mar
18 Mar
23 Mar
25 Mar
25 Mar
25 Mar
8Apr
8 Apr
8Apr
8 Apr
15 Apr
15 Apr
15 Apr
15 Apr
15 Apr
22 Apr
22 Apr
29 Apr
29 April
29 Apr
29 Apr
6 May
6 May
6 May
6 May
13 May
13 May
20 May
20 May
3 Jun
3 Jim
3 Jun
10 Jun
10 Jun
17 Jun
24 Jun
24 Jun
8 Jul
15 Jul
15 Jul
15 Jul
22 Jul
22 July
29 Jul
12 Aug
19 Aug
26 Aug
9Sep
9 Sep
16 Sep
16 Sep
23 Sep

Lemont FSA, Lemont, IL
Potomac FSB, Silver Spring, MD
Volunteer FSA, Little Feny, NJ
New England FSA, Wellesley, MA
Life FSB, Clearwater, FL
Pioneer FS&LA, Prairie Village, KS
Plymouth FSA, Plymouth, MA
Federal SA of VA, Falls Church, VA
Advanced FSB, Northridge, CA
living FB far Savings, FSB, Chicago, IL
First FSA, Lewiston, ME
life FSB, Baton Rouge, LA
Delta FSB, Westminster, CA
Abraham Lincoln FSA, Dresher, PA
Liberty FSB, Wanenton, VA
Golden State FSB, Irvine, CA
Jacksonville FSB, Jacksonville, FL
Carrollon Homestead Assn., FA New Orleans, LA
^
Homestead FSA, Middletown, PA
Westside Bank, a FSB, Los Angeles, CA
Goidome FS8, S t Petersburg, FL
Security FS&LA, Jackson, MS
Hansen FSA, Hammonton, NJ
Far West FSB, Portland, OR
Southern FSA of GA, Atlanta, GA
Prospect Park FSB, West Paterson, NJ
Pan American FSB, San Mateo, CA

Type
PA
PA
PA
PA
PA
PA
PA
PA
PO
PA
PA
PA
PA
PA
PA
PO
PA
PA
PA
PO
PA
PA
PA
PA
PA
PA
PA
PA

Citizens FSA, Jacksonville, FL
Citadel FS&LA, Charleston, SC
Vista FSA, Reston,VA
Security FSA, Panama City, FL
White Horse FS&LA, Trenton, NJ
Polifly FS&LA, New Milford, NJ

PA
PA
PA
PA
PA

Commonwealth FSB, Manassas, VA
Great American FSA, San Diego, CA
Piedmont FSA, Manassas, VA
AltusFSB, Mobile, AL

PA
PA
PA
PA/PO

Coastal FSB, New London, CT
Encino SB, FSB, Encino, CA *
Columbia Banking FSA, Rochester, NY

PA
PA
PA
PA

Cooper River FSA, North Charleston, SC
Franklin FSA, Ottawa, KS
John Hanson FSB, Beltsville, MD
Security FSB, Vineland, NJ
United FSA of Iowa, Des Moines, IA
Ukrainian FS&LA, Philadelphia, PA
Old Stone FSB, Providence, Rl
The Guardian Bank, a FSB, Boca Raton, FL

PA/PO
PA
PA
PA
PA
PA
PA
PA

Bay FSB, West Palm Beach, FL
Coral Coast FSB, Boynton Beach, FL
Hansen FSB, Palm Beach Gardens, FL
HomeBank FSA, Gilford, NH

PA
PA
PA

Guardian FSA, Huntington Beach, CA
Cobb FSA, Marietta, GA
Hollywood FSB, Hollywood, FL

PA
PA
PA

Oak Tree FSB, New Orleans, LA
Western FSB, Marina del Rey, CA
Dryades S&LA, F A , New Orieans, LA
Second National FSA, Salisbury, MD
TransOhio FSB, Cleveland, OH
Cherokee Valley FSA, Cleveland, TN

PA/PO
PA
PA
PA
PA

Home FSB, Norfolk, VA

PA
PA

16 Dec

Standard FSA, Gaithersburg, MD
Cornerstone Bank, FSB, Mission Viejo, CA*

PA
PA

Total

64 Institiitioas

30 Sep
18 Nov

Gross
Assets
$

87,412
39,447
22,531
45,141
25,446
131,602
63,845
11,505
8,242
193,599
41,372
11,744
16,254
50,293
59,545
46,604
61,185
20,188
67,798
62,585
218,565
184,233
203,688
365,466
55,354
128,125
141,531
21,667
15,051
48,657
21,210
26,749
268,711
20,496
1,550,352
277,714
328,239
128,257
95,362
657,292
64,028
1,099,345
137,758
717,459
205,952
41,940
1,325,162
36,793
3,236
9,290
7,404
55,299
170,826
17,362
375,835
1,549,049
2,847,684
60,000
833,260

Total
Deposits

Total
Liabilities
$

115,575
48,281
27,889
51,893
34,731
128,210
85,587
15,377
24,068
183,045
47,611
12,386
18,475
62,826
59,742
45,885
75,049
19,938
82,947
63,102
385,550
193,894
252,497

$

730,651
62,453
207,167

77,309
22,266
27,487
22,947
25,102
89,637
84,176
1,705
5,821
160,863
46,332
9,975
3,459
60,988
25,546
2,825
74,045
12,117
73,839
33,209
379,410
155,143
251,554
717,809
59,312
195,155
120,520
29,188

135,761
29,370
17,905
71,021

6,390
35,339
36,071
38,295
248,791

37,060
41,365
269,897
35,085

28,589
1,994,384
159,897
433,094

2,498,704
298,713
471,000
141,099
90,250

Number of Estimated
Cost of
Deposit
Accounts Resolution Acquiring Institution and Location
7,262 $
1,873
4,366
1,146
3,524
6,780
18,828
401
766
27,195
6,156
2,869
1,253
11,881
5,926
183
4,937
823
11,553
1,610
49,203
31,017
42,521
92,455
6,098
30,691
12,415
3,425
413
2,290
3,740
6,975
32,319
5,151
185,493
24,653
60,929
24,940
5,255
123,266
15,951
70,769

138,463
89,021
717,732
66,028
865,264
151,490
498,024

25,030
103,875

42,827
1,352,281

267,384
41,351
1,104,731

39,748
15,833
23,528
17,794
75,538
256,699
40,921

387,412
13,039
109,143
6,002
9,319

Branch Sale
Branch Sale
Lakeview SB, Paterson, NJ
Pan American Bank, FSB, San Mateo, CA
Branch Sale

8,483
31,785
17,747
19,138
37,987

Carolina First Bank, Greenville, SC
Eastern American Bank, FSB, Herndon, VA
Branch Sale
Collective FSB, Egg Harbor, NJ
Branch Sale
Fairfax B&TC, Fairfax, VA

18,555
1,181,307
85,843
156,062

Branch Sale
Crestar Bank, Richmond, VA
Branch Sale

11,359
4,605
51,703
15,812
338,642
150,231

Branch Sale
American SB, FA, Stockton, CA
Branch Sale
First Citizens B&TC of SC, Columbia, SC
Branch Sale
Branch Sale

52,098
5,326
176,199

74,595
80,877
5,313
141,362

Meridian Bank, NJ, Medford, NJ
Branch Sale
Branch Sale

2,438
968
975

5,863
12,601
15,479

13,054
73,164
80,687

817
13,086
3,902
6,617
72,494
40,994

10,384
28,256

27,537
536,402
379,349
1,814,112
71,537
526,279

538,448
2,821,657
2,831,813
73,406
858,736
1,347,785
73,137

79,950
1,182,231

None
Branch Sale
Kingfield SB, Kingfield, ME
Liberty B&TC, New Orieans, LA
East-West FB, FSB, San Marino, CA
Branch Sale
Jefferson NB, Charlottesville, VA
None
First Union NB of FL, Jacksonvifle, FL
Liberty B&TC, New Orleans, LA
Farmers Trust Co., Carlisle, PA
None
First of America Bank-FL FSB, S t Petersburg, FL
Branch Sale
Collective FSB, Egg Harbor, NJ

24,791
14,807
18,157

725,400
73,852
1,434,425
238,530
730,287
273,892

1,232,862
74,915

Branch Sale
Maiyland FS&LA, Hyattsville, MD
Interchange State Bank, Saddle Brook, NJ
Cambridgeport Bank, Cambridge, MA
Life SB, FSB, Cleaiwater, FL
Branch Sale
Branch Sale
Fairfax B&TC, Fairfax, VA

65,069
21,091
6,337
18,242
12,766
48,759
22,837
10,254
15,358
14,598
14,278
1,318
9,489
13,855
15,758
1,652
26,246
550
28,727
17,386
127,112
36,170
61,345

110,938
1,348,547

1,284,507
72,193
60,188

68,569

64,557

102,485
55,654

$18,019,266

$224*82,638

$14,842J80

107,488
8,506
63,063
223,890
15,152
5,007
28,772
1,222

142,643
25,949
158,801
1,390,979
239,194

Citizens SB, Providence, Rl
Shawmut Bank, FSB, Boca Raton, FL
Fidelity FSB of EL, West Palm Beach, FL
Mackinac SB, FSB, Boynton Beach, FL
Fidelity FSB of FL, West Palm Beach, FL
Branch Sale
Home Savings of America, FSB, Irwindale, CA
First Union NB of GA, Atlanta, GA
First Union NB of FL, Jacksonville, FL
Branch Sale
Branch Sale

16,654
205,807

Dryades SB, FSB, New Orleans, LA
Branch Sale

104,046
0

Branch Sale
Branch Sale

47,036
371,612
8,429

Home SB, FSB, Norfolk, VA
Branch Sale
California FB, a FSB, Los Angeles, CA

1,907,220 $6,329,251

Notes: 1) Data based on TFR data for the quarter prior to the date of resolution. 2) PO-insured deposit payoff; PA-purchase & assumption.
3) “ Estimated Cost of Resolution" as of date of resolution. 4) The RTC received $4 billion in January 1994 pursuant to the RTC Completion A c t Institutions resolved during
1994 were resolved using funds from the Completion Act as well as previous funding bills.
* Institution was resolved under the Accelerated Resolutions Program.

Digitized forfFRASER 1 1 I 1 I I M I T
I
M
I I


J I I TI J TI ( I

STATISTICS

RTC Resolved Conservatorships
August 9,1989, through December 31,1994
(dollars in thousands)

Assets

N u m be r____

In Conservatorship as of 8/9/89

Deposits

Liabilities

Number of
Accounts

262

$ 116,517,869

$122,868,781

$ 92,696,659

8,819,111

Added in 1989

56

26,179,812

26,136,879

20,176,012

2,267,728

Resolved in 1989

37

13,722,945

14,378,049

11,498,072

1,158,411

281

$ 128,974,736

$134,627,611

$101,374,599

9,928,428

Added in 1990

207

129,662,059

128,934,235

94,826,424

9,205,494

Resolved in 1990

309

136,373,273

140,649,769

106,027,378

11,188,766
7,945,156

In Conservatorship as of 12/31/89

In Conservatorship as of 12/31/90

179

$ 122,263,522

$122,912,077

$ 90,173,645

Added in 1991

123

72,940,093

72,051,337

57,470,402

5,124,146

Resolved in 1991

211

122,941,749

124,257,880

94,386,531

8,373,784

In Conservatorship as of 12/31/91

91

$ 72,261,866

$ 70,705,534

$ 53,257,516

4,695,518

Added in 1992

50

35,923,720

34,749,930

25,259,793

2,996,545

Resolved in 1992

60

36,302,997

35,658,138

28,249,005

2,703,935

In Conservatorship as of 12/31/92

81

$ 71,882,589

$ 69,797,326

$ 50,268,304

4,988,128

8

6,279,525

5,919,847

4,787,404

392,707

Added in 1993
Resolved in 1993

26

19,485,057

18,828,229

14,253,104

1,599,988

In Conservatorship as of 12/31/93

63

$ 58,677,057

$ 56,888,944

$ 40,802,604

3,780,847

Added in 1994
Resolved in 1994

0

0

0

0

0

62

53,756,374

52,117,725

38,181,235

3,502,872

In Conservatorship as of 12/31/94

1

$

4,920,683

$ 4,771,219

$ 2,621,369

277,975

Institutions never
placed in conservatorship
prior to resolution in 1990*

6

$

4,000,207

$ 4,421,669

$

3,724,296

560,411

Institutions resolved under
the Accelerated Resolutions
Program in 1991

21

$ 8,828,559

$ 8,571,564

$ 7,394,198

1,053,701

Institutions resolved under
the Accelerated Resolutions
Program in 1992

9

$ 9,727,798

$ 9,707,852

$ 8,511,029

993,251

Institutions resolved under
the Accelerated Resolutions
Program in 1993

1

$

42,850

Institutions resolved under
the Accelerated Resolutions
Program in 1994

2

$

142,095

$43,780

$

41,150

6,961

135,098

$

127,410

6,093

$385,889,790

$292,595,325

28,527,756

19,798,083

2,620,417

$312,393,408

3 1,148,173

$

All Institutions:
Conservatorships
Non-conservatorships
Total

705

$382,582,395

39

22,741,509

22,879,963

744

$405,323,904

$408,769,753

N Data at quarter prior to date of conservatorship (date of resolution for non-conservatorship resolutions).
ote:
Data revises previous RTC Annual Report data where applicable.
* Four non-conservatorship institutions were resolved under the Accelerated Resolutions Program in 1990.

J

 T II T I( J
TI


K E S I I I T II I

I K I IT ( • I

f I K I T II I

RTC Resolutions

STATISTICS

August 9,1989, through December 31,1994
(dollars in billions)
Resolutions
August 9,1989 - December 3 1,19 9 4
State

Resolution1

Savings*

IDT

10

1

11

$ 0.53

$0.07

Alaska

1

1

2

0.17

0.01

Arizona

5

4

9

5.33

0.21

Aifcansas

12

3

3

18

2.27

0.02

California* (7)

43

16

13

72

12.41

0.74

8

6

3

17

1.49

0.02

8

0.16

0.02

2

49

7.11

0.54

Colorado
Connecticut

7

1

Florida* (4)

38

9

Payoff

Total

PU

Alabama

Georgia

14

2

16

0.71

0.04

Illinois* (3)

41

8

49

1.52

0.27

4

0.04

0.01

12

0.30

0.06

23

2.11

0.12

3

0.05

0.01

52

4.16

0.07

4

Indiana
k w a * (l)
Kansas

13

1

11

Kentucky* (1)
Louisiana* (2)

11

10

3
28

13

1

1

2

0.03

0.00

10

Maine
Maiyland* (1)

4

14

1.52

0.07

1

0.03

Massachusetts

5

Michigan

4

Minnesota* (1)

2

6

2

0.07

0.03

5

3

1.49

4

0.88

0.03

Mississippi

12

5

19

0.65

0.04

Missouri* (2)

10

4

14

1.49

0.06

Nebraska

5

3

8

0.47

0.01

Nevada* (1)

1

1

0.00

0.00

2

0.05

0.01

33

3.24

0.17

New Hampshire

2

New Jersey* (1)

27

5

1

6

2

3

New Mexico
New York* (2)

11

1.76

0.00

14

14

3.05

0.18
0.06

North Carolina

8

1

9

0.43

North Dakota

2

1

3

0.17

0.00

18

0.69

0.29

Ohio* (5)
Oklahoma* (1)

14

1

17

18

0.78

0.03

3

3

0.50

0.16

19

19

2.90

0.15

1

1

0.12

0.04

2

0.15

0.16

6

0.15

0.03
0.01

Oregon
Pennsylvania* (1)
Puerto Rico
Rhode Island

1

South Carolina

4

6

1

South Dakota* (1)

2

Tennessee

8

3

Texas* (2)

61

29

Utah

2

0.06

11

0.31

0.03

47

137

23.79

0.57

5

0.49

0.03

1

18

2.10

0.15

4

1

Virginia* (1)

16

1

Washington

3

3

0.12

0.01

West Virginia

4

4

0.02

0.01

Wisconsin

2

Wyoming* (2)

3

Total (45 states I Puerto Rico)

494

1

158

3

0.10

0.00

1

4

0.04

0.01

92

744

$85.95

$457

‘ Thirty-nine non-conservatorship institutions were resolved through yearend 1994,37 of which were resolved under the Accelerated Resolutions Propam.
Number, by state, is indicated in parentheses.
Resolution cost estimated at time of resolution. The total cost has been revised to $89.72 billion based on updated estimated asset values.
*This amount represents the difference between the estimated cost of the actual resolution method used by the RTC, and the estimated cost
that would have been incurred had the RTC paid off the insured deposits.
Note: Detail may not add to totals due to rounding.
P&A-purchase and assumption; IDT-insured deposit transfer; Payoff-insured deposit payoff.

I FRASER I I 1 1 I I P I I T
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Digitized for > M


J T I I I ST I ( J ^ 9

INDEX

I I I S T I ( S
S I


A
Accelerated Resolutions Program, 8,
28, 29, 42-43, 44, 45, 104, 105,
106, 107
Accounting Services, Office of, 5, 52-53
Administration, Division of, 5, 19-21
Administration, Office of, 15-16
Administrative Evaluation Staff, 5, 25
Administrative Services, Office of, 5, 20
Affordable Housing, Department of, 5,
28, 38-40, 48
Affordable Housing Disposition
Program, 16, 38, 39, 40, 48, 60, 61
Altman, Roger C., 6
Asset Management and Sales, Division
of, 5, 27-40
Asset Marketing, Department of, 5,
37-38

Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, 4,
16, 29, 45, 50, 68, 83, 84, 85, 88
Financial Statements and Internal
Controls, 63-101

General Litigation, Office of, 16
Governmental Relations, Office of, 5,
8-9

H
Human Resources Management,
Office of, 5, 15, 20

I
Information Resources Management,
Department of, 5, 55-58
Investigations, Office of, 17-18

R
Budget and Planning, Office of, 5,
15-16, 52
Business Activities, Department of, 5,
12-14

Chief Financial Officer, Division of
the, 5, 21, 51-54
Complex Litigation, Office of, 16-17
Conservatorships, 2 ,4 ,1 2 ,1 3 ,1 7 , 24,
28, 29, 30, 31, 33, 42, 43, 44, 45,
65,
66, 68, 69, 84, 86, 88, 92, 93, 94
Contract Appeals, Office of, 5, 52, 54
Contractor Oversight and Surveillance,
Office of, 5, 13, 24, 25, 57, 72
Contracts, Office of, 5, 13, 24, 25
Contracts, Oversight, and Evaluation,
Division of, 5, 13, 23-25, 50
Corporate Communications, Office of,
5, 9
Corporate Information, Office of, 5,
56, 57-58
Corporate Issues, Office of, 14
Corporate Operations, Department of,
5, 14-16

E
EEO and Affirmative Action,
Department of, 5, 48, 49-50
Ethics, Office of, 5, 13, 18
Executive Committee, 6, 21, 56
Executive Compensation, 30, 31

F
Federal Deposit Insurance Corporation,
2, 4, 6, 8, 14, 15, 16, 17, 18, 20,
21, 24, 25, 29, 30, 32, 33, 34, 35,
52, 54, 56, 57, 58, 67, 70, 72, 83,
84, 95, 96, 97, 100
Federal Savings and Loan Insurance
Corporation, 4, 83, 84, 92, 95
Field Accounting and Asset Operations,
Office of, 5, 52, 53-54
Field Office Operations, Office of,
13-14
Field Resolutions, Office of Financial
Instruments, Office of, 5, 42

Justice, Department of, 16, 17, 18

L
Labor/Employment, Office of, 15
Legal Programs, Department of, 5, 49
Legal Services, Division of, 5, 11-18
Litigation, Department of, 5, 16-18

M
Major Dispute Resolution, Office of, 5,
24
Major Resolutions, Office of, 5, 13, 42
Management Control, Office of, 5, 52,
54
Minority- and Women-Owned
Business, Department of, 13, 48-49
Minority and Women's Programs,
Division of, 5, 47-50
Minority Participation, 43-46
Minority Preference Resolutions
Program, 45, 46, 48

\
National Marketing, Office of, 38
National Sales Center, 6, 35

II
Office of Thrift Supervision, 6, 16, 18,
42, 83
Operations, Office of, 13, 28, 29-33
Operations and Asset Management,
Department of, 5, 28-36
Organization and Resource
Management, Office of, 20-21
Outside Counsel Management, Office
of, 14-15

P
Policy, Evaluation, and Field
Management, Department of, 5, 50
Planning, Research, and Statistics,
Office of, 5, 8
Predominantly Minority
Neighborhood, 13, 45, 46, 60, 61
Professional Liability, Office of, 16, 17

II
Real Estate, Office of, 12
Receiverships, 12, 13, 17, 24, 28, 29,
30, 32, 33, 36, 43, 52, 53, 60, 65,
66, 67, 68, 69, 70, 71, 72, 75, 78,
83, 84, 85, 86, 87, 88, 91, 92, 93,
94, 100
Receiverships/Conservatorships, Office
of, 13
Regulations, 59-62
Research and Statistics, Office of, 8
Resolution Trust Corporation
Completion Act, 4, 13, 14, 17, 24,
30, 35, 45, 48, 49, 50, 54, 56, 60,
62, 67, 68, 70, 83, 90, 101
Resolution Trust Corporation
Financial Statements and Internal
Controls, 63-101
Organization Chart, 5
Resolution Trust Corporation
Refinancing, Restructuring and
Improvement Act of 1991, 4, 45,
50, 68, 83
Resolutions, 8, 12, 13, 14, 28, 29, 32,
42, 43, 44, 45, 46, 50, 56, 67, 69,
70, 78, 87
Resolutions, Division of, 5, 41-46, 50
Ryan, John E., 2, 6

s

SAMDA Program Management, Office
of, 13, 28, 34
Savings Association Insurance Fund
(SAIF), 6, 69, 70
Secretary, Office of the, 5, 20, 21
Securities and Finance, Office of, 12-13
Securities Transactions, Department
of, 5, 28, 36-37
Securitization Management,
Department of, 5, 28, 36
Seller Financing, 28, 36, 40
Settlement Workout and Risk
Management, 28, 33-34
Small Investor Program, Office of, 37-38
Standard Asset Management and
Disposition Agreements, 13, 34
Statistics
RTC Conservatorships, January 1,
1994-December 31, 1994,104
RTC Resolutions, January 1, 1994December 31,1994, 105
RTC Resolved Conservatorships,
August 9, 1989-December 31,
1994, 106
RTC Resolutions, August 9, 1989December 31,1994, 107
Systems and Transaction Review,
Office of, 28, 34-35
Systems Development, Office of, 5,
56-57

T
Thrift Depositor Protection Oversight
Board, 4, 6, 8, 21, 53, 64, 70, 83,
84, 88, 93, 97

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102