Updated from Monday, Dec.22.

CIT Group's

(CIT) - Get Report

on Tuesday said the federal government would invest $2.33 billion in a preferred equity stake, after the commercial lender won approval from the

Federal Reserve

to become a bank holding company.

CIT said the Treasury Department had given preliminary approval to the investment, to be made through the $700 billion Troubled Assets Relief Program, or TARP. The Utah Department of Financial Institutions also approved the application of CIT Bank to convert from a Utah-chartered industrial bank to a Utah-chartered bank, required under the Fed's approval of the bank holding company-status.

CIT Group does not plan to acquire another depository institution at this time, the Fed said in its approval.

"In light of the unusual and exigent circumstances affecting the financial markets, and all other facts and circumstances, the board has determined that emergency conditions exist that justify expeditious action on this proposal in accordance with the provisions of the

Bank Holding Company Act and the board's regulations," the Fed said in a statement.

Goldman Sachs

(GS) - Get Report


Morgan Stanley

(MS) - Get Report

both applied for and received bank holding company status is September, after the collapse of

Lehman Brothers

and insurer

American International Group

(AIG) - Get Report

. The move gave the former investment banks access to the Fed's discount window and other government programs, including the Treasury Department's efforts to invest in preferred equity stakes of deposit-taking companies through the Troubled Assets Relief Program, or TARP. The Treasury program is intended to spur lending amid stalled credit markets.

Since then, several other financial companies have pursued the same strategy.

American Express

(AXP) - Get Report

in November won approval to become a bank holding company and applied for TARP funds.

Discover Financial Services

(DFS) - Get Report

also has applied for bank holding company status.

General Motors'

(GM) - Get Report

finance arm GMAC also has applied for bank holding company status.

Several insurance companies have acquired

small banks

and applied for bank holding company status, including

The Hartford Financial Services Group

(HIG) - Get Report


Lincoln National

(LNC) - Get Report


Genworth Financial

(GNW) - Get Report


This article was written by a staff member of TheStreet.com.