Are Regulators About To Let Another Bank Get Too Big To Fail?

In July, CIT Bank announced a .4 billion deal to merge with OneWest, the largest bank merger since Capital One’s billion purchase of ING Direct in 2011. The merger would give CIT roughly billion in assets, crossing the billion threshold for a “systemically significant” institution, which triggers additional regulatory scrutiny. The bank received .3 billion in TARP funds, but the government rejected a bigger lifeline, and soon after, the bank fell into bankruptcy, the fifth largest in U.S. The bankruptcy wiped out preferred stock from the TARP deal, and CIT never repaid the government.

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