John Thain, the former chief executive of Merrill Lynch & Co., has been named chief executive of CIT Group as the commercial lender tries to establish itself after emerging from bankruptcy.

CIT [CIT] was not available for comment, but in a public statement Sunday, the company said the change is effective immediately.

Thain replaced Peter Tobin, who will remain on CIT’S board. Tobin had been named interim CEO in January when Jeffrey Peek retired as chairman and CEO. The lender had emerged from bankruptcy in mid-December, six weeks after it filed from protection from creditors.

In CIT’s statement, lead director Vice Admiral John Ryan said Thain is “uniquely qualified to lead CIT at this critical stage. CIT and its customers will benefit enormously from his breadth of experience, industry acumen and deep knowledge of the financial services sector.”

Indeed, before the troubles during his last days at Merrill Lynch, Thain was a very well respected executive in financial services. He spent 24 years at Goldman Sachs before being tapped to modernize the New York Stock Exchange in the wake of the pay scandal of predecessor Dick Grasso.

Still, it is his last days at Merrill that have been seared into the public memory. After Bank of America [BAC] bought Merrill Lynch, a scandal broke about executive bonuses and the magnitude of Merrill’s losses. Public and shareholder frustrations were compounded when the expense of Thain’s redecorated office came to light. So in January 2009, Thain was fired by Bank of America’s CEO Ken Lewis, who also later resigned as the scandal continued to grow.

The issues of bonuses and Merrill’s losses are still being played out in court. New York Attorney General Andrew Cuomo filed suit last week against Bank of America as well as Lewis and former chief financial officer Joseph Price for allegedly hiding losses at Merrill Lynch before its acquisition of the brokerage firm.

CIT also recently announced that Alexander Mason, president and chief operating office would be leaving the company on Feb. 26. In a short announcement, Tobin said in a statement last week, “Alex came to CIT at a time of enormous challenge. We would like to thank him for his contributions during our restructuring and we wish him continued success in the future.”