FDIC Resumes Auction of Assets Left Over From S&L; Cleanup

The Federal Deposit Insurance Corp. has resumed the auction of assets left over from the federal cleanup of the savings and loan industry, just five weeks after unexpectedly suspending the sales.

In January, the FDIC took over the auctions from the now-defunct Resolution Trust Corp., which was charged with cleaning up the savings and loan industry. On April 12, the FDIC suspended the auction of roughly $20 million in assets after discovering “irregularities” with expenses tied to the auctions.

Without warning, the agency resumed the auctions Thursday, after implementing “interim procedures designed to prevent the type of irregularities that occurred under the Resolution Trust Corp.’s management,” according to a statement released by the FDIC.

Officials at the FDIC refused to elaborate on management problems, but they said a solution to the problems will be announced by July 31. The FDIC’s inspector general, Gaston Gianni, is also investigating the auctions.

Since taking over the RTC’s responsibilities, the FDIC has decided to sell less than $20 million of the $6.3 billion in remaining RTC holdings at public auctions. Other means will be used to sell the vast majority of the assets, which range from outstanding loans to office equipment from failed thrifts, according to FDIC spokesman David Barr.

The RTC was created in 1989 to deal with the failure of hundreds of U.S. savings and loans.

The RTC closed its doors in December and the FDIC was charged with getting rid of the RTC’s remaining thrift assets.