The Bush administration is telling regulators to begin selling real estate and other assets from failed savings and loans even before the government officially closes the institutions.
Regulators "should immediately begin shrinking such institutions' balance sheets in a coordinated and orderly manner," instructs a document obtained Monday by The Associated Press.The administration, in a 91-page strategic plan, also is telling regulators to discourage influence-peddling by keeping a public log of all attempts by "senior public officials" or their staffs to influence their decisions.
The plan, scheduled for release by the end of the year, was prepared by the Resolution Trust Corp. Oversight Board, an administration panel headed by Treasury Secretary Nicholas F. Brady. The board sets policy for the Resolution Trust Corp., a new entity run by the Federal Deposit Insurance Corp., an independent regulatory agency.
Under pressure from critics to increase the pace of its savings and loan bailout, the administration plan outlines its approach to the huge task of selling more than $300 billion in S&L assets.
As of Dec. 8, the RTC had control of 280 failed S&Ls, having disposed of 33 since its creation Aug. 9. It expects to get jurisdiction of at least another 220 insolvent thrifts in the next 2 1/2 years.
Most of the 33 S&L resolutions so far have involved transferring the deposits of the failed institution to a healthy bank or S&L, leaving the government with the thrifts' bad loans and repossessed real estate.
Critics say unless the RTC starts selling S&L assets soon, the properties will deteriorate, driving up the taxpayer cost of the bailout.