Cit Grp. Pfd A (fka CIT-A)

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Treasury Recognizes $2.3B TARP Loss From CIT Group

WallStreetJoutrnal.com
Meena Thiruvengadam
DOW JONES NEWSWIRES
Feb. 11, 2010

U.S. taxpayers' $2.3 billion stake in CIT Group Inc. (CIT) has officially been wiped out.

The U.S. Treasury recognized the loss, which was widely expected, in a report released Wednesday.

The Treasury provided the commercial lender with funds from the Troubled Asset Relief Program in December 2008, but CIT Group still ended up undergoing a bankruptcy reorganization by the end of 2009.

Despite the CIT Group loss and other likely taxpayer losses, the Treasury expects the cost of TARP will continue to fall from the just under $120 billion at which it now stands. The Treasury is expecting its losses on financial sector rescue efforts to largely stem from aid provided to domestic auto makers, American International Group (AIG) and government sponsored enterprises Fannie Mae (FNM) and Freddie Mac (FRE).

"If Congress joins the President in adopting a Financial Crisis Responsibility Fee, Americans will not have to pay one cent for TARP," Treasury Secretary Timothy Geithner said in a statement released separately Wednesday.

Treasury is expecting to turn a profit on aid provided directly to the banking sector and on Wednesday said it had received a $7.6 billion TARP repayment from PNC Bank (PNC). Including the PNC transaction, banks have so far repaid $173 billion in capital borrowed from the Treasury.

Treasury made both announcements during a government shutdown in response to the area's second severe winter storm in a week.

http://online.wsj.com/article/BT-CO-20100210-719446.html?mod=WSJ_latestheadlines