U.S. In Advanced Talks To Rescue CIT Group (CIT)
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According to reports in the Wall Street Journal, the U.S. government is in advanced talks to provide some sort of aid to struggling lender CIT Group (NYSE: CIT). Talks are fluid and it remains unclear whether a deal can be brokered and how expansive it might be.
Officials are seen weighing if CIT's problems are big enough to pose a threat to the broader financial system. The Obama administration has struggled with its program to spur lending to small businesses, where CIT is a key player.
One source of aid for CIT would be the FDIC program to guarantee newly issued debt from the company, but thus far the FDIC has been reluctant to provide this facility to CIT due to the company's financial weakness.
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.
Link to WSJ Article
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