Posted on 07/14/2009 9:32:16 AM PDT by FromLori
WASHINGTON -- U.S. government officials are in advanced talks about providing some sort of aid to CIT Group Inc., one of the country's primary lenders to small and midsize businesses, people familiar with the matter said.
Outside CIT offices Monday in New York. The U.S. might aid the lender.
CIT has been battered by heavy losses, but so far, regulators haven't deemed its problems big enough to pose a threat to the broader financial system. Government officials are worried, however, about unforeseen consequences that a CIT collapse could trigger. The Obama administration has struggled to launch a program to spur lending to smaller companies, a business in which CIT is a key player, with loans to nearly a million customers.
One possible source of aid would be a Federal Deposit Insurance Corp. program that guarantees newly issued debt. CIT has been seeking for months to take advantage of this program, but the FDIC has been reluctant to let it, because of CIT's financial weakness. The Treasury Department and the Federal Reserve are more supportive of such a move, said several people familiar with the process. It remained unclear Monday whether the FDIC would soften its position and let CIT issue federally guaranteed debt.
Government officials are also considering other steps, including a regulatory waiver that could make it easier for CIT to pass assets from its parent company to its bank division, as well as a separate way to borrow from various government programs.
The Wall Street Journal reported Saturday that CIT had hired a bankruptcy adviser and was considering a bankruptcy filing. CIT said late Sunday that it remained in "active discussions" with regulators and the government on ways to improve its cash position.
CIT received $2.33 billion from the Treasury's Troubled Asset Relief Program in December.
(Excerpt) Read more at online.wsj.com ...
“We are the CITs so pity us...”
I know exactly that is why it burns me up we are footing the bill!
http://washington.bizjournals.com/washington/stories/2009/07/06/daily90.html
As a CIT shareholder who just lost 75% on the stock today, I’m glad the government refused to bail them out.
No! For God’s sake, no more bailouts!
Have we learned anything? Of course there will be unforseen consequences when CIT collapses. It’s called risk. It’s part of the deal. It is not the government’s job to eliminate risk from the marketplace.
Oh I am glad too as a taxpayer we were just connecting dots about govt. sachs is all
http://www.americanthinker.com/2009/07/will_dems_allow_goldman_to_man.html
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