Magazine article American Banker

RTC Funding Bill in Doubt as House Opposition Grows; Agency's Spending Authority Lapses Today

Magazine article American Banker

RTC Funding Bill in Doubt as House Opposition Grows; Agency's Spending Authority Lapses Today

Article excerpt

WASHINGTON -- New funding for the Resolution Trust Corp. appears in doubt as Republican opposition grew this week and House Speaker Thomas Foley signaled to the administration that he is ready to support a scaled-down bill.

The RTC still has money, but its authority to spend it for resolutions lapses today. Rep. Foley said he would support a measure that would authorize the RTC to begin spending again but that would not provide additional money.

The House Banking Committee approved legislation last month that would permit further RTC spending and provide an additional $25 billion.

The Senate passed a similar bill but added other provisions, including one that would permit thrifts to count investments in real estate subsidiaries as part of capital.

Some House members, including Rep. Bill McCollum, RFla., had hoped to preserve the Senate language. Rep. McCollum also sponsored a bill that would require the federal government to "buy back" goodwill from thrifts that otherwise would be forced into conservatorship for failing to meet minimum capital requirements.

An Unpopular Proposal

But the RTC funding measure came under fire from all directions. Rep. Newt Gingrich of Georgia, the House Republican whip, has been lobbying for a measure that simply extends the April 1 spending deadline without providing new money.

"I believe if they will use the resources that have been provided, they can do the job without any more money," Rep. Gingrich said on Tuesday.

'A Trojan Horse'

Meanwhile, the Democratic leadership has been warning for weeks that it would not support the administration-backed funding proposal without a promise of support from at least half the Republicans in the House. …

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