CIT Group enters into agreement with Fed, adopts plan to protect NOLs

By Lisa Kerner

Charlotte, N.C., Aug. 13 - CIT Group Inc. announced on Thursday that it entered into a written agreement with the Federal Reserve Bank of New York on Wednesday that requires CIT to regularly report to the bank.

The agreement also requires the submission of plans and some restrictions related to corporate governance, credit practices, capital and liquidity and the company's businesses, and CIT must receive written approval related to the payment of dividends and distributions, incurrence of debt and the purchase or redemption of stock.

The company also said its board of directors adopted a tax benefits preservation plan.

The plan protects CIT's ability to use its net operating losses and other tax assets, but it does not affect the company's ability to pursue restructuring or strategic opportunities, CIT said.

According to CIT, the plan preserves value for the benefit of all of its stakeholders in the event of an ownership change under U.S. federal income tax rules.

CIT said the rights plan reduces the likelihood of a person or group becoming a 5% shareholder and effecting an ownership change.

CIT is a New York-based lender to small businesses and middle market companies.

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