US officials fear CIT situation has worsened-source

WASHINGTON, July 15 (Reuters) - U.S. officials are still exploring providing government assistance to CIT Group (CIT.N), but are increasingly concerned that conditions at the lender have deteriorated too far, according to a source familiar with government talks.

The source said Treasury Department officials are concerned that CIT's liquidity crunch has worsened over the past few days and that government aid would not effectively put the lender on a path to recovery.

A resolution for the lender's liquidity problems is expected in the next 24 hours and could end in a bankruptcy filing, the source said, speaking anonymously because the situation is still fluid. (Reporting by Karey Wutkowski and Rachelle Younglai; Editing by Tim Dobbyn)