CIT Group in talks with regulators, shares tumble

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Shares of diversified lender CIT Group Inc. plunged Monday as uncertainty mounts over whether it can get federal backing for its bonds.

The company's shares fell nearly 22 percent in morning trading after dropping 18 percent in heavy trading Friday amid uncertainty over federal aid.

CIT said it is still in talks with regulators on ways to improve its near-term liquidity as recent losses may jeopardize its compliance with capital requirements.

The company, which in April posted a wider-than-expected first-quarter loss, said late Sunday that it will talk with regulators about the possibility of participating in the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program.

The program would let the New York-based financier to small and mid-sized businesses issue government-backed bonds to raise capital at a lower cost. As of June 8, the program has backed $335.4 billion of debt.

CIT already received $2.3 billion in government bailout funds in December, as part of the $700 billion rescue fund created by Congress last October. It had to convert to a bank holding company to access the money.

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