CIT plans to transfer some of its customers to its subsidiary bank in Utah. If the deal fails, the Salt Lake City bank is at risk to fail, also.
The Security and Exchange Commission has warned CIT that if it does not secure the money, it will have to begin bankruptcy proceedings. With this move, the economy is beginning to show signs of a recovery. Experts warn that recovery will be slow, however.
Many retailers may be at risk for bankruptcy if CIT fails to receive the money. “The retail sector could be especially hard. CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing.”