The WSJ reports that CIT and the government have broken off talks about a rescue package for the lender:

Small-business lender CIT Group Inc. said “there is no appreciable likelihood” that it will receive fresh government support, suggesting the struggling company might instead seek to file for bankruptcy protection.

In a written statement issued after the market close, the company said it was “evaluating alternatives.”

The company has been locked in talks with government officials and regulators during the past week in a bid to prop up its business. The reason for the collapse in negotiations couldn’t be immediately learned.

The rest of the article is worth a read as it looks as if the various arms of the government were having trouble coordinating with each other on this one.