It looks like the government agrees with me. CIT just announced that their discussions with government agencies have ceased.
I have a feeling that the regional banks are drooling over a potential CIT failure. Small business loans have always been the bread and butter of a regional bank and they should be able to fill any shortage of credit left by CIT's destruction.
It's absolutely appalling that CIT has been playing the "think about the small business owner" card in an attempt to drum up sympathy from the FDIC. Well, according to a recent Bloomberg article, the small business owners aren't as worried as CIT makes them out to be...
CIT Group Inc.’s (CIT) plea for a second federal bailout may be undermined by a survey of 758 small firms that shows most have little trouble getting credit.
A “very low” percentage consider financing their “top business problem,” according to June data released yesterday by the National Federation of Independent Businesses. The net percentage of owners reporting loans were harder to get fell to 14 percent from 16 percent, said the NFIB.
Regulators at the Treasury, Federal Reserve and Federal Deposit Insurance Corp. are debating whether to risk more taxpayer funds, on top of the $2.33 billion granted to CIT in December, to keep the lender afloat. Standard & Poor’s said this week CIT may go bankrupt without U.S. help. New York-based CIT’s supporters point to 1 million customers who may lose funding, including about 300,000 retailers.
“Was this good money thrown away?” said Jim Barth, former chief economist at the Office of Thrift Supervision. Regulators may not offer aid if they conclude CIT’s failure isn’t a systemic threat, he said. “Sometimes in the process of destruction, you rebuild a stronger foundation,” he said.
I'm glad that someone is finally calling CIT's bluff. Shame on them for trying to hold the small businesses up for ransom...
Disclosure: No positions