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CIT Jumps as Lender Exits Regulatory Curbs Imposed in 2009

CIT Group Inc. Chief Executive Officer John Thain. Photographer: Jonathan Fickies/Bloomberg
CIT Group Inc. Chief Executive Officer John Thain. Photographer: Jonathan Fickies/Bloomberg

May 30 (Bloomberg) -- CIT Group Inc., the business lender run by John Thain, jumped 5.4 percent after reporting that regulatory curbs imposed in 2009 while the firm struggled to survive have been lifted.

CIT received notice from the Federal Reserve Bank of New York that a written agreement dated Aug. 12, 2009 was terminated, according to a statement today from the company. CIT advanced $2.41 to $46.90 as of 4:15 p.m. in New York and traded for as much as $47.77, its best level since February 2011. The stock has gained 21 percent this year.

Bad loans including subprime mortgages led New York-based CIT to take $2.33 billion from the Treasury’s bank rescue fund and then file for bankruptcy. Thain, who joined the company after its troubles began, led CIT with a plan that reduced the lender’s bad credits and high cost of funds. The bailout wasn’t repaid.

CIT’s 2009 agreement with the Fed required the company to seek the regulator’s approval for issuing dividends or new debt. CIT also pledged to provide periodic updates focusing on cash and funding.

To contact the reporter on this story: Rick Green in New York at rgreen18@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Dan Kraut at dkraut2@bloomberg.net

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