Taxpayers Lose $2.3 Billion with CIT Bankruptcy
CIT, which specializes in lending to small and midsize businesses, got bailout money last December, a vote of confidence from regulators and the Treasury that CIT could survive and use the money to boost lending. But by the summer, the company was flirting with bankruptcy.
The Treasury's investment was made in the form of preferred shares, as it was in almost all of the 600 other banks it approved for taxpayer investment through its TARP program for "healthy" banks. Preferred and common shareholders will be wiped out, the company has said.
The Treasury does stand a chance to recoup something. But that recovery "will be minimal" said a Treasury spokesperson.
CIT is not the only foundering TARP recipient. We reported a couple of weeks ago that three others were struggling to survive.
A little later in the week, we'll post our monthly accounting for the bailouts to give you an overview of spending, how much has come back, and how much won't.
As big banks return their TARP money, Fannie Mae and Freddie Mac continue to be a drain.
Latest Stories in this Project
Our Hottest Stories
- Big Investors Push for Auditors to Sign Financial Statements
- The Best Reporting on Federal Push to Militarize Local Police
- New York City Will Pay $10 Million to Settle Wrongful Conviction Case
- More Data to Be Withheld from Database of Physician Payments
- In California, Some Efforts to Toughen Oversight of Assisted Living Falter