Resolution Trust Corporation

The Resolution Trust Corporation (RTC) was a U.S. government-owned asset management company run by Lewis William Seidman and charged with liquidating assets, primarily real estate-related assets such as mortgage loans, that had been assets of savings and loan associations (S&Ls) declared insolvent by the Office of Thrift Supervision (OTS) as a consequence of the savings and loan crisis of the 1980s. It also took over the insurance functions of the former Federal Home Loan Bank Board (FHLBB).

Between 1989 and mid-1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts with total assets of $394 billion. Its funding was provided by the Resolution Funding Corporation (REFCORP) which still exists to support the debt obligations it created for these functions.

It was established in 1989 by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), and was overhauled in 1991.

In 1995 its duties were transferred to the Savings Association Insurance Fund (SAIF) of the Federal Deposit Insurance Corporation (FDIC). In 2006 the SAIF and its sister fund for banks—the bank insurance fund (BIF)—also administered by the FDIC, were combined to form the Deposit Insurance Fund (DIF) under the provisions of the Federal Deposit Insurance Reform Act of 2005.

After initially emphasizing individual and bulk asset sales, the Resolution Trust Corporation pioneered the use of equity partnerships to help liquidate real estate and financial assets inherited from insolvent thrift institutions. While a number of different structures were used, all of the equity partnerships involved a private sector partner acquiring a partial interest in a pool of assets, controlling the management and sale of the assets in the pool, and making distributions to the RTC based on the RTC's retained interest.

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