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US officials at odds over bailout for CIT
US GOVERNMENT officials were last locked in debate over whether to throw a lifeline to ailing business lender CIT Group.
Despite fears that CIT’s financial woes could spell disaster for up to a million small and medium-sized businesses, the Federal Deposit Insurance Corp (FDIC) is resisting calls to offer the firm access to its loan guarantee programme.
FDIC says it is worried that the company’s debt would put at risk the insurance fund that is used to repay deposits when banks fail.
CIT has been in talks with the Treasury Department, Federal Reserve and FDIC about possible solutions. CIT faces a debt payment and investors and customers have begun to lose confidence in the firm.