Displaced Bankers Find Temporary Haven at RTC
Esther Hay Smith, former president of First Women's Bank in Richmond, Va., now works for the government. She applied for a job with the Resolution Trust Corp. in search of new challenges after a 25-year career in banking.
"Working for the Fed is different from what I had envisioned," she said of her new job as managing agent of the failed Nassau Savings Bank in Princeton, N.J. "But if you have any experience in banking, you can learn this job."
Indeed, as consolidation, cost cutting, and insolvency continue to shower pink slips on bank employees, the RTC has become a temporary refuge from the storm for many former bankers.
A Major Institution
With a portfolio now valued at $180 billion, the RTC has become the second-largest financial institution in the nation in terms of asset size. It employs more than 7,000 people around the nation, about the same number of employees as $10 billion-to $20 billion-asset bank holding companies such as Arizona's Valley National Corp., Florida's Southeast Banking Corp., or New York's National Westminster Bancorp.
But the lifespan of the RTC is expected to be short; the agency is slated to be out of the business of selling failed bank and thrift assets by 1996.
In the meantime, the agency is hiring - and many of its hirees are out-of-work bankers.
Wide Range of Jobs
Just what type of employee is Uncle Sam looking for? The gamut can run from computer specialists to records management but, clearly, anyone who has been involved in unloading assets has an edge on the competition.
"The most current demand is for asset disposition specialists - anyone who has experience not only in selling, but in selling unusual assets and who has a good eye for packaging," said Steve Katsanos, a Washington, D.C.-based spokesman for the RTC. "For instance, it helps to be acquainted with areas such as affordable housing and environmental issues."
The RTC gives its employees a chance to quickly gain experience in many areas of banking that wouldn't be open to them in private industry, said Michael LaBella, a full-time government employee who oversees the equal opportunity employment and ethics functions in the RTC's office in Costa Mesa, Calif.
For the unexperienced, the RTC offers training. To prepare for her post, for example, Ms. Hays Smith was sent to a week-long training course given at the RTC office in Washington, D.C. She continues to attend seminars in Washington and New Jersey.
In the sessions, employees become familiar with the agency's systematic hierarchy, which dictates who will sign off on what decisions. Each organizational level, from the local up to the Washington staff, has some authority to sell loans. The nature and size of the asset determines how complex the approval process will be, said Ms. Hays Smith.
A lot of these complicated guidelines can be somewhat frustrating, said one RTC employee, who asked not to be identified. The government has its "own proven way of doing things" that involves red tape unheard of in the private sector.
Wary Approach Urged
Furthermore, career counselors say a position with the RTC should be approached with some caution. The agency is already under fire from several members of Congress for giving the store away. And it is frequently criticized by the private sector as being bureaucratic and slow to sell assets.
"The RTC may turn out to be another scandal," said Mark J. Carsman, consultant and counselor with the New York-based outplacement firm of Fuchs, Cuthrell & Co. Inc. "Working there may be risky if they are involved in trouble down the road."
Mr. Carsman recommended only a short tenure with the agency for career bankers, and warned that staying beyond a year, especially in a high management position, could damage a reputation in the future.
But for career bankers who find themselves temporarily without a job, the RTC may well be the best option for short-term employment. A year of honing skills at selling troubled assets, plus establishing RTC contacts, may be convertible into a higher salary and better job later on.
Cashing In on Experience
The type of work experience gained is unique, and although restrictions will apply for a period after an employee leaves the government, having ties to the agency can become a marketable asset.
"The private sector expects that when they hire you, you come with any and all Rolodexes," said James Barth, a finance professor at Auburn University in Alabama. "For a long time it was difficult to get connected with the decision makers at the RTC. This has gotten easier, but to the extent that someone is seen as a door to the RTC, this person could become that much more valuable."
But getting a job with the RTC is not easy. The agency is flooded with resumes.
"We get a lot of applications," said Linda Soucie, administrative assistant at the RTC office in Costa Mesa, Calif. "About 200 to 300 come in for each job posting."
While it is obvious that the RTC cannot begin to hire this many applicants, it is growing its payroll in some regional offices and has vacancies in others.
"California just approved 200 more jobs, so we will now have about 400," said Mr. LaBella, who spent several years at Citibank and Wells Fargo before applying for a government job in 1984. "We've grown out of our quarters and are moving to new offices in Newport Beach."
Mr. Katsanos pointed out that most hiring is done directly at RTC regional offices, with each using its own strategy for recruitment. In Texas, for example, the agency can sit back and let the workforce come to them.
"Because Texas is still recovering economically, we really don't need to headhunt," said Anne Sigerstad, associate regional director of administration of the RTC's Southwest Region, with headquarters in Dallas. "We get so many well-qualified applicants."
Meanwhile, the Atlanta RTC office developed a successful campaign to recruit retired or nearly retired executives to head up its conservatorship programs. Applicants must be willing to relocate temporarily, see their families only during weekends, and to move on once the S&L has been resolved.
"They are shifted around to different institutions," explained Mr. Katsanos, "We can get as many as four new conservatorships a week."
Ralph L. Deacon, who took early retirement after 39 years in commercial banking, joined the RTC two years ago. He is now supervisory managing agent for the Northeast cluster, which manages failed S&Ls out of its headquarters in Somerset, N.J. The office employs 120 people.
Mr. Deacon, formerly president of Central Fidelity Bank in Charlottesville, Va., first became managing agent of a $200 million-asset failed S&L in his home state. He then managed the liquidation of the $11 billion-asset Empire Savings Bank in Buffalo, N.Y., until May 1990.
Screening Is Tight
"We've got a lot of early retirees," said Mr. Deacon, who now spends about three weekends a month with his wife in Charlottesville, Va. "Half of them are from failed S&Ls and merged banks. We screen all the the applicants very closely."
The pay scale for managing agents ranges from $41,000 to $75,000 annually, depending upon experience, he said. All jobs are one-year appointments, but most employees find that second-year extensions are readily available if they perform well.
"When the work goes away, we'll have to cut back," he said, "but we have no idea of when that might happen."
While the RTC was originally scheduled to stop absorbing insolvent savings and loans in 1992 and to go out of business completely in 1996, RTC Oversight Board Chairman Nicholas Brady has recently requested that the takeover period be extended to 1993. And to foot the bill, Congress is now searching for an additional $80 billion in funding by the end of the fiscal year.
Lynn Homa is a freelance banking writer based in New York.
Table : Working for Uncle Sam
Number of employees in each RTC office, as of June 24
Eastern District, Atlanta
North Central District, Kansas City
Western District, Denver
Southwest District, Dallas
National sales office, Washington
132 Source: RTC