RTC Says It Won’t Need All Funds Allocated

Jack Ryan, the Resolution Trust Corp.’s acting chief executive, is telling lawmakers that his agency may need only $5 billion of the $18.3 billion that the Clinton Administration fought for much of its first year.

The RTC will still spend about $10 billion on resolutions before closing shop, Ryan has said. But about half that will come from money provided before last year’s legislation, leaving only another $5 billion to be funded from the 1993 RTC Completion Act.

Steven Katsansos, a spokesman for the agency, confirmed the figures but said the estimates are subject to change.

“We view that as an extremely soft number,” he said.

If the forecast holds up, the remaining money may never be drawn from the Treasury. But under provisions of the 1993 funding bill, it could be funneled into the fledgling Savings Assn. Insurance Fund if conditions are met.

The surplus funds could help resolve a sticky political problem. The Bank Insurance Fund is expected to recapitalize within the next two years. Once that happens, the Federal Deposit Insurance Corp. is expected to lower bank premiums dramatically.

But thrifts are expected to continue paying higher premiums for years to come, creating a competitive disadvantage for the industry. Some thrift representatives are pressing Congress to consider merging the two insurance funds.

Already, there are murmurs on Capitol Hill about the possibility of using the leftover funds as a “sweetener” to encourage banks to support legislation merging the savings industry fund with the bank fund.

Banking industry representatives add that thrift lobbyists are beginning to talk up the idea of giving leftover RTC funds to a merged agency.