By  on August 13, 2009

Factoring clients of CIT Group Inc. are being given the option of signing deferred purchase agreements as a precaution to protect their accounts, financial sources said.

Typically, when factors collect on behalf of client accounts, they first take title to the invoices. That’s the subject of a debate over who — the clients or CIT — would own the collected funds in the event of a bankruptcy. With a deferred purchase agreement, the clients would retain title to the funds even though CIT is making the collection requests. CIT executives declined comment.

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