CIT working on survival plan -WSJ

NEW YORK, July 12 (Reuters) - CIT Group Inc (CIT.N) officials are scrambling to come up with a plan to convince customers and investors the commercial U.S. lender can work its way out of a deepening liquidity crunch, The Wall Street Journal reported on Sunday.

The plan could be announced Sunday night or Monday morning, the Journal reported on its website.

Senior company executives met with government officials and congressmen on Saturday, worried that hundreds of small and mid-size business customers may rush to withdraw funds or draw down credit lines, according to the paper.

Earlier this week, there were reports that CIT Group had retained a top law firm to prepare for a possible bankruptcy filing after failing to gain access to a key U.S. government lending program.

On Friday, CIT said it was talking to the government to gain access to funding, but that there was no guarantee the Federal Deposit Insurance Corp would approve its application to join the Temporary Liquidity Guarantee Program.

CIT's shares fell as much as 39.2 percent on Friday on those concerns.

CIT had hoped to get short-term emergency financing over the weekend, but officials are unwilling to lend, partly because they do not feel the company poses a systemic risk to the financial system, the Journal reported.

Also, other lenders could step in to provide the same loans to small and mid-size customers that CIT lends to, the paper reported.

CIT's plan for survival was described to the Journal by an unidentified person close to the matter as a "comprehensive solution that would show how CIT can navigate the current economic environment."

A CIT spokesman declined to comment on the Journal report. (Reporting by Anupreeta Das; Editing by Phil Berlowitz)