Shares of lender CIT Group Inc jumped Tuesday on expectations that regulators will support the company, which is struggling with a liquidity crisis.

People are speculating that CIT is going to get government assistance, said David Chiaverini, analyst with BMO Capital Markets in New York.

The Treasury Department and the Federal Reserve are exploring aid options for the lender, a source familiar with the matter said on Monday. A CIT spokesman did not respond to requests for comment.

CIT shares climbed as much as 31 percent to a high of $1.77 in morning trading, but later fell back to $1.50, up 11 percent.

The upfront cost to insure $10 million of CIT debt for five years fell to $3.8 million from $4.05 million late on Monday, plus annual payments of $500,000, according to data from Phoenix Partners Group.

CIT shares slumped 11 percent on Monday after the New York-based company said it might not receive approval from the Federal Deposit Insurance Corp to issue government-guaranteed debt.

The lender has struggled to finance its business during the financial crisis. It applied in January to access the debt-guarantee program to improve its liquidity position.

Shares of CIT, which mostly finances small and medium-sized companies, have fallen 70 percent this year.

(Reporting by Elinor Comlay; editing by John Wallace)