April 4, 1990
TO: SEC RULES MEMBERS NO. 26-90
RE: RTC DECISION TO CONTINUE PAYING POST-INSOLVENCY INTEREST
__________________________________________________________
We are pleased to inform you that Resolution Trust Corp.
("RTC") has announced that it will approve a plan under which it
will pay interest on certain obligations of savings and loan
associations placed under RTC conservatorship. After RTC took
over Franklin Savings & Loan last month, it stated that it
believed it had the authority to stop paying interest on fixed-
income securities that were issued by thrifts placed under RTC
conservatorship, even when the securities are fully
collateralized. However, after reviewing letters received and
meeting with various groups on this issue, RTC has decided not to
exercise that authority. Attached is a copy of the letter
submitted by the Institute urging RTC not to disallow the payment
of post-insolvency interest.
Amy B. Rosenblum
Assistant General Counsel
Attachment