Dodd Says U.S. Shouldn’t Rule Out Helping CIT Avoid Bankruptcy

[Purveyor]

Source: Bloomberg

July 23 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said the U.S. shouldn’t reject aiding CIT Group Inc., the 101-year-old commercial lender seeking to avert bankruptcy, while weighing alternatives to federal bailouts.

“There’s an exhaustion that’s settled in” to government rescues and policymakers should “look at alternative ideas to that rapid, massive injection of resources” into companies, Dodd said today in an interview in Washington.

“I wouldn’t rule out the possibility of government intervention financially” at CIT, said Dodd, a Connecticut Democrat. “Maybe there are some alternative ideas that would allow the company to survive in an altered state, but still allow it to provide the assistance and support they have to smaller business.”

CIT, a lender to small businesses, turned to bondholders this week for a $3 billion rescue loan after failing to win a second government bailout. New York-based CIT, which has lost $3 billion in the past eight quarters, said it expects to report a loss of more than $1.5 billion for the second quarter and may have to file for bankruptcy if its offer to buyback notes due next month fails.

Dodd, whose panel writes legislation for the banking industry and is writing legislation for the administration’s regulatory reform plan, said he plans to complete the bill and get it to President Barack Obama by the end of this year.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a3RtrfKlJpnA

[Duckhunter935]

1. let them go bankrupt

Should have done that to most of them. They drag our whole economy down by adding to the dept.

[karynnj]

7. This was not one of the banks that did that - THEY were rescued

I don't know all that much about this bank, but it was said to have lent money to small businesses, specially in the garment industry. Their failing could hurt the businesses that rely on them for credit. They were hurt by the economic, rather than having caused it.

[hedgehog]

2. What does it do to our economy if the Small Business Administration

looks into making loans to small businesses at a rate which allows them to become self sustaining? As it is, the businesses are trapped, by the time they pay off the loan they took out last year, they have no capital left for next year and are forced to borrow again.

[No Elephants]

5. Isn''t that what the SBA used to do?

http://www.sba.gov/aboutsba/history/index.html

Maybe our next move should be loan care reform, when it comes to loans now only guaranteed by federal and state government, like SBA loans and student loans. Single lender.

[hedgehog]

10. What! Deprive banks of the profit from guaranteed lonas?

Are you a socialist or what!

[karynnj]

8. Many businesses need credit

The cycle is that they spend a lot of money to buy raw materials and to pay workers, then they sell the product. I get what you are saying, which is that they should be self financing from retained earnings, but few comanies have that much capital.

[Indydem]

3. Chris Dodd - Mega Douche n/t

[FarCenter]

4. Chris Dodd is against unsound lending practices

Unless the loans are to his constituents.

[bluesmail]

6. I think he may be right. CIT loans to small businesses. I don't want to see

small businesses eaten up by gigantic unrepenting MegaCorporations with zero tolerance.

[depakid]

9. Yep- the knee jerk type would cut off their noses to spite their faces

Ideologues no different than Republicans. And in some ways, worse.