Riegle Proposes Abolishing The RTC Oversight Board
Bill Aims to Streamline Bailout Bureaucracy
WASHINGTON -- Senate Banking Committee Chairman Donald Riegle introduced a bill last week to reform the Resolution Trust Corp.
The Michigan Democrat's bill, cosponsored by five other senators, would abolish the RTC's Oversight Board and leave a single five-member board in charge of the savings and loan rescue effort.
The board would consist of the Treasury secretary, the Federal Deposit Insurance Corp. chairman, the RTC's chief executive officer, and two independent members. The RTC chief would head the board.
Sen. Riegle's bill deals only with the management structure and does not address the $80 billion funding request from the RTC, which would be on top of an initial $80 billion appropriation that is nearly spent.
However, a banking committee staff member said that eventually new funding for the RTC would be rolled into the reform bill.
|No One Really in Charge'
Currently there is an RTC board and an Oversight Board - the latter is headed by Treasury Secretary Nicholas Brady - which Sen. Riegle complained leaves "too many people in charge" and "no one [executive] really in charge of the massive bailout operation.
"This bill would end that confusion by streamlining the two-board structure of the RTC and by putting into place an RTC chief executive officer who has the stature to interact with all agencies of government while running the RTC on a day-to-day basis," Sen. Riegle said in a statement.
Funding at Stake
The administration wants to retain the two-board structure: one to set policy and the other to oversee operations. The RTC has a new chief executive, Albert V. Casey, who was put in place by the administration in an effort to ward off the sort of changes Sen. Riegle is proposing.
Members of Congress have stated repeatedly that they will not provide new funding for the agency without accompanying structural reforms.
Sen. Riegle's bill deals only with the management structure and does not address the $80 billion funding request from the RTC, which would be on top of an initial $80 billion appropriation that is nearly spent.
Sen. Riegle insisted that the plan will not throw the RTC off track, because field personnel and their expertise would not be let go, and offices would not be closed.
Joining Sen. Riegle in sponsoring the bill are fellow Democratic Senators Alan Dixon, Ill.; Chris Dodd, Conn.; Bob Graham, Fla.; Tim Wirth, Colo.; and Bob Kerrey, Neb.
Delay Called Costly
The Treasury Department was working on a letter to law-makers on Friday to explain the cost of delaying RTC refunding to February when Congress gets back to work.
Congress is scheduled to adjourn for the year on Nov. 27. Mr. Casey, the RTC's chief executive, estimated in a Nov. 5 letter to Mr. Brady that delay could add $400 million to the tab for bailing out the thrift industry.
There is real concern at the RTC that Congress, sick of costly, contentious banking issues, will adjourn without voting any more money for the RTC.
"It is hard to see any real momentum right now" behind a bill to replenish RTC coffers, one RTC staff member said Friday.
And there is a precedent for this pessimism. It happened last year.
