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32 trade associations urge Govt to reconsider its decision on CIT

18
Jul '09
Today, 32 trade associations, led by the American Apparel & Footwear Association, sent the attached letter to Treasury Secretary Timothy Geithner urging the U.S. government to reconsider its recent decision to not provide CIT Group, Inc., a major source of credit and lending to small and medium sized businesses, with federal assistance in the wake of economic turmoil.

The wide ranging group of signatories represents the full spectrum of the textile and apparel supply chain, including designers, raw material providers, textile manufacturers, apparel manufacturers, and retailers. Signatories also include state retail organizations, home furnishing/furniture associations, and others directly impacted by CIT's current financial situation.

Joint association CIT letter July 2009:

The Honorable Timothy Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Dear Secretary Geithner:

As the U.S. and world economies struggle to recover from the most devastating recession in recent memory, we are writing to impress upon you the very severe ramifications that a CIT bankruptcy would have on more than one million smalland medium-sized businesses, their partners in the U.S. retail industry and the manufacturers and service providers that supply that sector.

Our organizations represent thousands of these small- and medium-sized enterprises and their suppliers as well as the most significant retail operations in this country. We urge the government to reconsider every possible option to address the current stresses confronting CIT and to prevent further tightening of the credit markets. With personal consumption at 70 percent of GDP, the revival of consumer purchasing is critical to our nation's economic recovery.

Without CIT, thousands of retailers may be forced out of business because their suppliers will be put out of business. Such a ripple effect could set back the recovery of the manufacturing and retail sectors, and therefore the U.S. economy, by several years. CIT is one of the leading factoring companies in the United States and is a vital source of financing for manufacturers as well as the small and medium-sized vendors who are the primary suppliers of merchandise sold in U.S. retail
establishments.

Because of CIT's primacy in this field, they have essentially become the banker to “Main Street”, and as such, it is absolutely essential for the government to utilize every tool at its disposal to prevent a CIT bankruptcy. Uncertainties over CIT have already provoked a credit squeeze that threatens payments and payrolls in thousands of businesses. As this uncertainty persists, and if CIT is forced to undertake a bankruptcy filing, the ripple effect will be felt in every city and state across this country as the further tightening of credit markets will make it incredibly difficult, if not impossible, for many of the companies who currently rely on CIT for financing to remain in business. The number of jobs that depend on the successful outcome of the CIT crisis is immeasurable.


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