In the News: Holy CIT, We May Be in Trouble!
After spending most of the weekend working with the member of Congress, regulators, etc, no new news, in this case, is not good news for CIT Group Inc. CIT, facing a possible collapse and run on the bank, went to the government in an attempt to gain access to the FDIC’s Temporary Liquidity Guarantee Program – although the application is still pending, the outcome is pretty certain – nope, or at least receive some sort of emergency financing from the government – again, nope. CIT’s big plan now involves transferring
While many of the largest banks that have received help cater to all company sizes, CIT predominantly lends to small and midsize companies. Therefore, while a CIT collapse may not be catastrophic to the economy, but can severely impact many small and midsize companies across the country.
Having already received $2.3 billion under TARP with little to show for it, combined with the government’s unwillingness to include CIT in the additional assistance opportunities/programs, is a run on the bank inevitable? On the other hand, perhaps plans will come to fruition and the government will decide to provide further assistance to the troubled player. Time will tell, but with nearly $3 billion in debt maturing in the next several months, the amount of said time may not be very much at all.
