Fed designates CIT Group as bank holding company
Business Law
The Federal Reserve on Monday said it has approved CIT Group Inc. as a bank holding company, clearing a key hurdle for the firm to bolster its resources with loans and support from the government's financial rescue fund.
The Fed's decision means the New York City-based commercial financial services firm will have permanent access to the Fed's emergency loan window and also will be eligible for loans from the $700 billion rescue fund created by Congress on Oct. 3.
CIT Group had been seeking the change in status in an effort to improve its funding options and help weather the severe credit crisis that has hit the financial sector.
"Bank holding company status is expected to provide us increased access to funding and a new platform from which we will serve our middle market and small business clients," CIT Group Chairman and Chief Executive Jeffrey M. Peek said in a release. "We believe this step should ultimately enhance the value of our franchise."
CIT Group had its credit rating cut by Standard & Poor's on Friday. The company's counterparty credit rating was reduced to "BBB+" from "A-." The new rating is still considered investment grade.
S&P has taken an increasingly pessimistic view on the broader financial services industry which is undergoing a severe credit crunch with billions of dollars of loan losses and the U.S. economy struggling to emerge from a recession that is already the longest in a quarter-century.
The government is trying to counteract the credit crisis by using the bailout program to purchase stock in financial institutions as a way of bolstering their balance sheets and encouraging them to resume more normal lending. In addition, the Fed has made billions of dollars of emergency loans to banks through its discount window.
Related listings
-
Lehman broker charged in insider trading case
Business Law 12/19/2008A former Lehman Brothers broker who gleaned tips about pending mergers from his wife, a partner at a high-powered public relations firm, has been charged in a wide-ranging insider trading scheme that earned $4.8 million in profits for several people ...
-
Madoff scandal could lead to tax losses nationwide
Business Law 12/19/2008Even Uncle Sam may get burned by Bernard Madoff.Investors who lost their fortunes in Madoff's alleged Ponzi scheme will end up paying far less in taxes and may even be eligible for refunds, according to accounting experts.By some estimates, the Inter...
-
Report: Siemens close to SEC corruption settlement
Business Law 12/11/2008Industrial conglomerate Siemens AG is close to reaching a settlement with U.S. and German authorities over its long-standing corruption scandal, daily Sueddeutsche Zeitung reported Thursday.Munich-based Siemens would not comment on the report."We're ...
New York Commercial Litigation Law Firm - Woods Lonergan PLLC
Founded in 1993 by Managing Partner James F. Woods, Woods Lonergan PLLC has built a strong reputation as a resourceful and industrious firm that provides clients with clear, concise, and straightforward answers to their most challenging legal issues. Partner Lawrence R. Lonergan, who joined the firm in 2008, has been a friend and colleague to Mr. Woods for over 40 years and shares the same business philosophy. Woods Lonergan PLLC’s collective experience and expertise enables the firm to expeditiously and effectively analyze the increasing challenges clients face in an evolving business and legal world, in many instances, avoiding unnecessary time and expense to our clients. Our mission is simple: provide cutting-edge expertise and sound advice in select areas of the law for corporate and business clients. We thrive on providing each client with personalized attention, forceful representation, and a collaborative team effort that embraces collective knowledge.