Thain will seek to turn around the losses CIT suffered in the recession. The middle-market financial company -- one of America's biggest providers of credit to small businesses -- recently emerged from Chapter 11 bankruptcy protection.
The appointment is a return to corporate life for Thain, 54, after a year as Merrill Lynch chief executive. He was ousted after negotiating the sale of Merrill Lynch to Bank of America (BoA).
Thain fell out with BoA's then chief executive Kenneth Lewis over Merrill's fourth-quarter loss of $15.4bn and the payment of $3.6 billion in bonuses to its bankers. The bank also criticized him for unnecessarily spending over $1.2m for refurbishing his office.
CIT said its COO Alexander Mason will step down on 26 February as part of a revamp of the management and its board.
