eBay's Bill Me Later unit said it has contingency plans in place should the parent company of its lending partner declare bankruptcy. CIT Group, the parent company of CIT Bank, has been busy with restructuring efforts that, if unsuccessful, could lead the company seek relief under the U.S. Bankruptcy Code, according to its filings with the SEC.

eBay acquired Bill Me Later (BML) in 2008. The service offers transaction-based credit to online shoppers at the time of checkout. Bill Me Later is not a chartered financial institution nor is it licensed to make loans in any state, so it relies on CIT Bank, an industrial loan company based in Salt Lake City, Utah, to originate the loans.

Bill Me Later's Mark Lavelle explained last October that CIT Bank issues the loan to BML shoppers, then BML buys the loan from CIT Bank within 2 days of the loan being originated from customers.

Bill Me Later spokesperson Sara Parker said on Wednesday she could not comment on the state of either CIT Bank or CIT Group, but said there has been no disruption in Bill Me Later's service. Parker said Bill Me Later has contingency plans for all of its major vendors, including CIT Bank, but could not elaborate on BML's contingency plan for CIT Bank.

eBay Inc. addressed the risks associated with CIT Group's restructuring efforts in SEC filings last month:

We acquired Bill Me Later, a company that provides transaction-based credit, in November 2008. Bill Me Later is neither a chartered financial institution nor is it licensed to make loans in any state. Accordingly, Bill Me Later relies on CIT Bank to extend credit to customers in order to offer the Bill Me Later service. When a consumer makes a purchase using the Bill Me Later service, CIT Bank funds the consumer loan at the point of sale and advances funds to the merchant. Bill Me Later subsequently purchases the receivable related to the consumer loan extended by CIT Bank. Although CIT Bank continues to own each customer account, Bill Me Later owns the related receivable and is responsible for all servicing functions related to the account. Any termination or interruption of CIT Bank's services to us could materially and adversely affect our ability to offer the Bill Me Later service. Under those circumstances, we would be required to either reach a similar arrangement with another chartered financial institution, which may not be available on favorable terms, if at all, or to obtain our own bank charter, which would be a time-consuming and costly process and would subject us to a number of additional laws and regulations.

On July 20, 2009, CIT Group, the parent company of CIT Bank, announced a restructuring plan. If CIT Group is unable to complete the restructuring plan, or if CIT Group's financial condition otherwise significantly impairs CIT Bank's financial condition or operations or if CIT Bank's financial condition or operations are adversely affected for any reason, CIT Bank could be placed under FDIC receivership. In the event of a receivership, the FDIC as receiver could potentially terminate or suspend our commercial relationship with CIT Bank. If such a termination or suspension occurs before Bill Me Later has reached a similar arrangement with another chartered financial institution to provide such services, Bill Me Later would be unable to originate any new transactions until a new arrangement was made, which would materially and adversely affect Bill Me Later's business during that period.