Trading In CIT (CIT) Halted As U.S. Addresses Liquidity Crisis

Shares of CIT Group, Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, were halted late this afternoon as discussions with regulators on an bailout enter a crucial stage.

The company is in desperate need of liquidity and the Treasury, the Federal Reserve and the FDIC are all said to be working with the company on a solution. A plans to address the company's liquidity crisis is expected within 24 hours.

President Obama has received a briefing on the CIT situation and is monitoring the company "minute by minute."

Among the matters being discussed are the Company's application to participate in the FDIC's Temporary Liquidity Guarantee Program. CIT is also actively discussing liquidity solutions that do not involve access to the TLGP program, such as the near-term transfer of assets into CIT Bank through Section 23A waivers and the transfer of its Vendor Finance and Trade Finance businesses into CIT Bank.

CIT has told regulators that its demise would put 760 manufacturing clients at risk of failure and "precipitate a crisis" for as many as 300,000 retailers. CIT said a collapse would ripple across the "small and medium-sized businesses who rely on CIT to operate -- to pay their vendors, ship goods to their customers and make their payroll."

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