S&L Rescues Halted
WASHINGTON (AP) _ The Federal Deposit Insurance Corp., which is taking control of 224 insolvent savings institutions, announced Wednesday that it is temporarily halting S&L rescues.
S&L regulators rescued or propped up 223 institutions last year, mostly by issuing promissory notes and pledging to cover future losses. The deals have been criticized as more expensive to tax payers in the long run.
The FDIC, a commercial bank regulator, will spend the next month taking control of the remaining failed S&Ls under orders from President Bush. In a statement Wednesday, the FDIC said it was calling a halt to assistance transactions until it can evaluate the institutions.
After that, it will only resolve cases that can be supported by the S&L insurance fund’s cash flow. No notes or loss guarantees will be considered, it said.
In another development, the president of a quasi-public agency created to sell loans and property from failed savings institutions announced his resignation.
Gerald P. Carmen, former head of the General Services Administration and a political ally of former President Ronald Reagan, resigned effective next month as head of the Federal Asset Disposition Association.
FADA, established in 1985, had been severely criticized for conflicts of interest and mismanagement. In a statement, Carmen said he had turned the agency around in his year at the helm.
The agency currently manages about 2,500 assets worth $3.8 billion, spokesman Dave Bunton said. He said John Wills, currently executive vice president, will serve as acting president.
FADA’s fate under Bush’s S&L reorganization plan is unclear, he said.