This is essentially what the Resolution Trust Corporation did with hundreds of insolvent savings and loans from 1989 through the early nineties — and this crisis will potentially dwarf that one.
At issue is a Resolution Trust regulation that permits banks making emergency acquisitions of insolvent savings and loans like Independence to operate the branches of the institution as bank branches.
The O.T.S., an arm of the Treasury Department, will take over four or five insolvent savings and loans a week until all are transferred to Resolution Trust, said T. Timothy Ryan Jr., the office's director.
Resolution Trust administered insolvent savings and loan associations, among them the failed Madison Guaranty Savings and Loan, which had played a role in Mr. Clinton's investment in the Whitewater real estate development.
Director has described the extent of the fraud problem that the Government faces as part of the Federal bailout of insolvent savings and loan institutions.
Exactly a week after the election a plan to raise $20 to $30 billion a year in cash for three years to be used for shutting insolvent savings-and-loan institutions was announced.
The White House is also aware that because so much taxpayer money is being used to bail out hundreds of insolvent savings and loan associations, the rescue program could become a big political issue in the 1992 Presidential campaign.
At the Treasury and the Federal Reserve, career officials have talked for a long time about the need to set up an equivalent of the Resolution Trust Corporation, which liquidated insolvent savings and loan institutions in the 1980's and sold their assets, often at fire-sale prices.
Last February, Wright is reported to have intervened with high-level officials of the Federal Home Loan Bank Board to prevent the board from closing insolvent Texas savings and loans, particularly Dallas-based Vernon Savings & Loan, which was owned by Donald Dixon.
Hundreds of savings and loans became insolvent after interest rates rose sharply in the late 1970's.
