Mad Money

Did FDIC Want CIT to Fail?

Outrage of the Day

Washington’s decision-making never ceases to baffle Cramer, especially when it comes to bailouts. Even ol’ Lefty Rosenthal couldn’t handicap who the government chooses to save or sacrifice.

Think about it: JPMorgan Chase , Bank of America , Regions Financial and even AIG got handouts to keep their respective doors open for business. But a lender such as CIT Group , which Cramer has praised for its transparency, has the proverbial door slammed in its face?

While Cramer isn’t a fan of CIT’s management, and CEO Jeffrey Peek holds a special place on Mad Money’s Wall of Shame, he does think the company has been “a model of good behavior.” And he can’t understand why the Obama administration would turn its back on CIT’s clients, which are the job-creating small and medium-sized businesses so essential to the US economy. And that’s to say nothing of the $2.3 billion in Troubled Asset Relief Program money – taxpayer money – that Washington had already spent on CIT. The government was just going to flush that down the toilet?

Cramer pointed the finger directly at FDIC Chairwoman Sheila Bair. All the FDIC had to do was guarantee CIT’s debt, as it had done for many other lenders, and that TARP money would have been safe. And get this – CIT put in for guarantees back in January, but Bair sat on the application and provided no reason why. No wonder Cramer’s so outraged.

Sheila Bair needs to make a second appearance on Mad Money, Cramer said, and tell viewers why she seemingly tried to sink CIT. Was it favoritism? Capricious whim? Either way, the FDIC chair has some explaining to do, Cramer said.

Cramer's charitable trust owns Bank of America and JPMorgan Chase.

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