Former Flagstar chairman to step down from board of directors

• Key Insight: Alessandro DiNello, whose history with Flagstar dates back to 1979, is not seeking re-election to the bank’s board of directors.
• Forward Look: Meanwhile, a lawsuit accusing DiNello of wrongful termination and other violations has yet to be resolved.  
• Expert Quote: “I’ve seen too many board members stay on much too long and I prefer to leave on my terms and before others think I should be leaving,” DiNello said.

Processing Content

Former Flagstar Financial CEO Alessandro DiNello is stepping down from the bank’s board of directors, the company disclosed in a securities filing.

DiNello, who has been on the company’s board since 2022, will not seek re-election and will finish his current term on June 9, according to a filing by Flagstar on Wednesday. The former CEO informed the bank of his decision on the same day, according to the $87.5 billion-asset lender, which said that DiNello’s departure is not due to any disagreement.

DiNello, who today is retired and 71 years old, told American Banker that leaving the board was a matter of stepping away at the right time. His decision came two years after he was replaced as the company’s top executive by Joseph Otting.

“I’m enjoying retirement and exiting all my board positions as my terms expire,” DiNello said in an email. “I have full confidence in Joseph and the management team he has built. No disagreement with anything whatsoever. I’ve seen too many board members stay on much too long and I prefer to leave on my terms and before others think I should be leaving.”

DiNello’s connection to Flagstar dates back to 1979, when he was working at Security Savings Bank in Jackson, Michigan. In 1994, that lender was acquired by the bank that eventually became Flagstar Bancorp.

Over the years, DiNello served as Flagstar’s head of branch banking, retail product strategy, marketing, communications and other roles, culminating with his appointment as CEO in 2013. He held that position until 2022, when New York Community Bancorp acquired Flagstar, with the combined company later rebranding itself as Flagstar Financial. At that point, DiNello became nonexecutive chairman.

In February 2024, DiNello returned to day-to-day leadership briefly as executive chairman of the combined company, which was in crisis at the time. In the fourth quarter of 2023, the bank suffered a net loss of $260 million, and in early February 2024 its stock price fell by 59%.

In March, just as DiNello was retaking the reins, former Treasury Secretary Steven Mnuchin and other investors gave Flagstar an emergency $1.05 billion injection of capital. DiNello was replaced by a member of that investment team: Mnuchin’s colleague in the first Trump administration, former comptroller of the currency Joseph Otting.

As DiNello is preparing to leave Flagstar’s board of directors Flagstar said it will be welcoming Eli Miller to its board, effective April 1. Miller is currently a senior managing director at Liberty Strategic Capital, Mnuchin’s private equity firm.

Though DiNello’s tenure as executive chairman was brief, it was not without controversy. In July 2025, a former company executive sued Flagstar and DiNello, alleging wrongful termination. The plaintiff, former chief compliance officer Ross Marrazzo, claimed that DiNello knew of a client’s money laundering activities and fired Marrazzo as he was investigating this.

The lawsuit also charged that during a company video call in early 2024, DiNello divulged non-public information while a junior employee was “sitting on his lap and rubbing his head.”

“The Complaint alleges behavior ranging from alarming to brazenly illegal,” Marrazzo’s attorney, Michael Willemin, said in a statement last year. “Whether it is turning a blind eye to compliance issues or wildly unprofessional workplace conduct, it is critical the bank be held accountable.”

Earlier this month, Flagstar moved to dismiss the lawsuit, arguing that Marrazzo was “lawfully terminated” and that none of his allegations met the legal definition of whistleblower retaliation. 

“Plaintiff attempts to cobble together three disparate incidents — a disagreement over a customer account, a vague ‘human resources concern,’ and an investigation of New York Stock Exchange rules compliance — none of which, individually or collectively, sustains a retaliation claim,” Flagstar’s attorneys wrote.

Marrazzo’s lawyers are vowing to fight on.

“The motion to dismiss is nothing more than a transparent attempt to evade responsibility for the conduct alleged in the complaint, and we look forward to moving this case towards trial after the motion is decided,” Willemin told American Banker by email.

Flagstar did not respond to American Banker’s request for comment, and DiNello declined to comment on the lawsuit.