By CORA LEWIS, Associated Press

NEW YORK (AP) — Millions of Americans are seeing their credit scores suffer now that the U.S. government has resumed referring missed student loan payments for debt collection.

After 90 days of non-payment, student loan servicers report delinquent, or past-due, accounts to major credit bureaus, which use the information to recalculate the borrower’s score. Falling behind on loan payments therefore can affect an individual’s credit rating as severely as filing for personal bankruptcy.

A lower credit score makes it harder or more expensive to obtain car loans, mortgages, credit cards, auto insurance and other financial services at a time when inflation, high interest rates, and layoffs have strained the resources of some consumers.

The Federal Reserve Bank of New York reported that in the first three months of 2025, 2.2 million student loan recipients saw their scores drop by 100 points, and an additional 1 million had drops of 150 points or more.

FILE – A sign reading “cancel student debt” is seen outside the Supreme Court, June 30, 2023, in Washington. (AP Photo/Mariam Zuhaib, File)

Declines that steep may mean the difference between a manageable credit card interest rate and an unmanageable one, or approval or rejection of an application to rent an apartment.

The U.S. Department of Education paused federal student loan payments in March 2020, offering borrowers relief during the economic chaos of the coronavirus pandemic.

Though payments technically resumed in 2023, the Biden administration provided a one-year grace period that ended in October 2024. Last month, the Trump administration restarted the collection process for outstanding student loans, with plans to seize wages and tax refunds if the loans continue to go unpaid.

According to the Federal Reserve Bank of New York, about 1 in 4 people with student loan accounts were more than 90 days behind on payments at the end of March.

Kat Hanchon, 33, who works in marketing and higher education in Detroit, was one of them. Hanchon said her score dropped by 57 points as a result of her loans falling delinquent this year. That put her score below 600, or subprime.

When Hanchon received her statement from her loan servicer, her expected monthly payments were higher than before the pandemic-era pause, even though she had enrolled in a repayment plan that takes a borrower’s full financial situation into account.

“They said I now have to pay $358 per month,” she said. “I’m not going to be able to pay that. … But I’m not unusual in the world we’re living in right now.”

Hanchon said she’s had to prioritize paying medical expenses — for a dental crown, a root canal, and an endoscopy — before she’ll be able to consider putting money toward the loans. While her housing situation is secure for the moment, she worries about the annual percentage rate for her credit cards fluctuating.

Lenders, landlords, credit card companies, employers and utility companies all look to consumers’ credit scores to gauge the likelihood of borrowers being able to make regular payments. A higher score typically results in lower interest rates and more favorable loan terms, while a lower score makes it harder to access credit.

The Education Department has said borrowers should receive bills from lenders three weeks before any payments are due, but some people have reported that they have not been notified.

Wait times for calls with loan servicers have been high, and layoffs at the Department of Education have also likely contributed to delayed service, consumer advocates say.

Dom Holmes, 28, who works for a nonprofit in Manheim, Pennsylvania, said he woke up in early May to find his credit score had dropped 60 or 70 points overnight.

“All of a sudden I was delinquent, even though I’d never received notice,” he said.

Holmes has begun the process of appealing the reduction of his credit score, he said. He’s been considering a move for professional reasons, and added that he’s concerned it could be tough to rent a place to live with his score as it stands.

“I’m at the ideal age where I should be starting a family and buying a home,” he said. “When you destroy me financially, what are the chances I’m able to do that and that’s viable for me?”

Holmes, who was the first person in his family to graduate from college, said he still has some outstanding Parent Plus loans, which he intends to keep paying down so that his parents’ credit scores aren’t affected.

He graduated in 2019, shortly before the pandemic, and said he can see how his generation might have difficulty paying off the debt.

“Right as I was entering the workforce, the world really stopped,” Holmes said. “Things were really bad for a lot of people for a long time. We’re still coming out of that. And all of a sudden, the switches got turned back on overnight.”

Kevin King, vice president of credit risk at data and analytics company LexisNexis, said he expects the effects of the resumed student loan collections to begin rippling through the U.S. economy in the coming months.

Related Articles

ICE is using no-bid contracts, boosting big firms, to get more detention beds

‘Golden Share’ in U.S. Steel gives Trump extraordinary control

Today in History: June 16, Valentina Tereshkova becomes first woman in space

Man suspected of shooting 2 Minnesota lawmakers caught, AP source says

A Border Patrol agent died in 2009. His widow is still fighting a backlogged US program for benefits

“There were a number of years where it was probably a bad financial strategy to be making student loan payments,” he said. “A lot of consumers were confused as various government (policies of forgiveness) were passed and overruled.”

King predicts that student loan payments will move higher in the so-called “payment hierarchy,” or the order in which consumers make payments, since the government plans to use “levers to compel” such as wage garnishment and the seizing of tax refunds.

“Which bill do you pay first, second, and not at all?” King said. “Historically, student loans are really far down the list. But the government’s being pretty aggressive here in pursuing payment activity in a way that may shift the hierarchy. Consumers might be more willing to go delinquent or default on something like a credit card or installment loan.”

The Federal Reserve of New York study also found that borrowers ages 40 and older were most likely to be delinquent on their loans.

Andrew McCall, 58, of Boise, Idaho, said he has about $30,000 remaining in outstanding loans from earning his computer science degrees. He said he can’t afford his monthly payments, which are in the $250-300 range, and worries what a hit to his credit score might mean for all areas of his life.

“The fact that this economy is driven by debt to begin with causes my score to be paramount no matter what financial decisions I’m making, outside of going to the grocery store,” he said. “My car, my house… Your credit rating becomes a social stratifier.”

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

By AMI BENTOV, Associated Press

TEL AVIV, Israel (AP) — Iran fired a new wave of missile attacks on Israel early Monday, killing at least five people, while Israel claimed in the fourth day of the conflict that it had now achieved “aerial superiority” over Tehran and could fly over the Iranian capital without facing major threats.

After days of attacks on Iranian air defenses and missile systems, the Israeli military said its aircraft now control the skies from western Iran to Tehran and had destroyed more than 120 surface-to-surface missile launchers, a third of Iran’s total, that had been firing at Israel in overnight missions.

The Israeli Iron Dome air defense system fires to intercept missiles during an Iranian attack over Tel Aviv, Israel, Sunday, June 15, 2025. (AP Photo/Leo Correa)

“Now we can say that we have achieved full air supremacy in the Tehran airspace,” said military spokesperson Brig. Gen. Effie Defrin.

Iran, meantime, announced it had launched some 100 missiles and vowed further retaliation for Israel’s sweeping attacks on its military and nuclear infrastructure, which have killed at least 224 people in the country since last Friday.

One missile fell near the American consulate in Tel Aviv, causing minor damage, U.S. Ambassador Mike Huckabee said on X. There were no injuries to American personnel.

Israel said so far 24 people have been killed and more than 500 injured as Iran launched more than 370 missiles and hundreds of drones. In response the Israeli military said fighter jets had struck 10 command centers in Tehran belonging to Iran’s Quds Force, an elite arm of its Revolutionary Guard that conducts military and intelligence operations outside Iran.

Explosions rock Tel Aviv and Petah Tikva

Powerful explosions, likely from Israel’s defense systems intercepting Iranian missiles, rocked Tel Aviv shortly before dawn on Monday, sending plumes of black smoke into the sky over the coastal city.

Authorities in the central Israeli city of Petah Tikva said that Iranian missiles had hit a residential building there, charring concrete walls, shattering windows and ripping the walls off multiple apartments.

People evacuate after a missile launched from Iran struck Tel Aviv, Israel, Monday June 16, 2025. (AP Photo/Baz Ratner)

The Israeli Magen David Adom emergency service reported that two women and two men — all in their 70s — and one other person were killed in the wave of missile attacks that struck four sites in central Israel.

“We clearly see that our civilians are being targeted,” said Israeli police spokesman Dean Elsdunne outside the bombed-out building in Petah Tikva. “And this is just one scene. We have other sites like this near the coast, in the south.”

Petah Tikva resident Yoram Suki rushed with his family to a shelter after hearing an air raid alert, and emerged after it was over to find his apartment destroyed.

“Thank God we were OK,” the 60-year-old said.

People evacuate after a missile launched from Iran struck Tel Aviv, Israel, Monday June 16, 2025. (AP Photo/Baz Ratner)

Despite losing his home, he urged Israeli Prime Minister Benjamin Netanyahu to keep up the attacks on Iran.

“It’s totally worth it,” he said. “This is for the sake of our children and grandchildren.”

In addition to those killed, the MDA said paramedics had evacuated another 87 wounded people to hospitals, including a 30-year-old woman in serious condition, while rescuers were still searching for residents trapped beneath the rubble of their homes.

“When we arrived at the scene of the rocket strike, we saw massive destruction,” said Dr. Gal Rosen, a paramedic with MDA who said he had rescued a 4-day-old baby as fires blazed from the building.

No sign of conflict letting up

During an earlier barrage of Iranian missiles on central Israel on Sunday, Iranian Foreign Minister Abbas Araghchi said that Iran will stop its strikes if Israel does the same.

But after a day of intensive Israeli aerial attacks that extended targets beyond military installations to hit oil refineries and government buildings, the Revolutionary Guard struck a hard line on Monday, vowing that further rounds of strikes would be “more forceful, severe, precise and destructive than previous ones.”

Related Articles

Today in History: June 16, Valentina Tereshkova becomes first woman in space

Trump vetoed Israeli plan to kill Iran’s supreme leader, US official tells AP

Russia’s strong ties with both Israel and Iran could help it emerge as a power broker

Israel and Iran trade strikes for a third day as hundreds reported dead

Today In History: June 15, Great Smoky Mountains becomes a national park

Health authorities also reported that 1,277 were wounded in Iran, without distinguishing between military officials and civilians.

Rights groups, like the Washington-based Iranian advocacy group called Human Rights Activists, have suggested that the Iranian government’s death toll is a significant undercount. Human Rights Activists says it has documented more than 400 people killed, among them 197 civilians.

Israel argues that its assault on Iran’s top military leaders, uranium enrichment sites and nuclear scientists was necessary to stop Iran from obtaining a nuclear weapon.

Iran has always insisted its nuclear program is peaceful, and the U.S. and others have assessed that Tehran has not pursued a nuclear weapon since 2003.

But Iran has enriched ever-larger stockpiles of uranium to near weapons-grade levels in recent years and was believed to have the capacity to develop multiple weapons within months if it chose to do so.

Ahead of Israel’s initial attack, its Mossad spy agency positioned explosive drones and precision weapons inside Iran, and since then Iran has reportedly detained several people on suspicion of espionage.

On Monday, Iranian authorities hanged a medical doctor identified as Esmail Fekri, who had been in prison since 2023 after being convicted of supplying the Mossad with “sensitive and classified” information, Iranian state-run television reported.

Tia Goldenberg in Tel Aviv and Isaac Scharf and Julia Frankel in Jerusalem, Israel, Isabel DeBre in Buenos Aires, Argentina, and David Rising in Bangkok contributed to this report.

By HEATHER HOLLINGSWORTH and JOHN HANNA, Associated Press

LEAVENWORTH, Kan. (AP) — Leavenworth, Kansas, occupies a mythic space in American crime, its name alone evoking a short hand for serving hard time. The federal penitentiary housed gangsters Al Capone and Machine Gun Kelly — in a building so storied that it inspired the term “the big house.”

Now Kansas’ oldest city could soon be detaining far less famous people, migrants swept up in President Donald Trump’s promise of mass deportations of those living in the U.S. illegally.

The federal government has signed a deal with the private prison firm CoreCivic Corp. to reopen a 1,033-bed prison in Leavenworth as part of a surge of contracts U.S. Immigration and Customs Enforcement has issued without seeking competitive bids.

Related Articles

‘Golden Share’ in U.S. Steel gives Trump extraordinary control

Today in History: June 16, Valentina Tereshkova becomes first woman in space

Man suspected of shooting 2 Minnesota lawmakers caught, AP source says

A Border Patrol agent died in 2009. His widow is still fighting a backlogged US program for benefits

What’s left for the Supreme Court to decide? 21 cases, including state bans on transgender care

ICE has cited a “compelling urgency” for thousands more detention beds, and its efforts have sent profit estimates soaring for politically connected private companies, including CoreCivic, based in the Nashville, Tennessee, area and another giant firm, The Geo Group Inc., headquartered in southern Florida.

That push faces resistance. Leavenworth filed a lawsuit against CoreCivic after it tried to reopen without city officials signing off on the deal, quoting a federal judge’s past description of the now-shuttered prison as “a hell hole.” The case in Leavenworth serves as another test of the limits of the Republican president’s unusually aggressive tactics to force migrant removals.

To get more detention beds, the Trump administration has modified dozens of existing agreements with contractors and used no-bid contracts. One pays $73 million to a company led by former federal immigration officials for “immigration enforcement support teams” to handle administrative tasks, such as helping coordinate removals, triaging complaints or telling ICE if someone is a risk to community safety.

Just last week , Geo Group announced that ICE modified a contract for an existing detention center in southeastern Georgia so that the company could reopen an idle prison on adjacent land to hold 1,868 migrants — and earn $66 million in annual revenue.

“Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now,” said CoreCivic CEO Damon Hininger during an earnings call last month with shareholders.

A tax-cutting and budget reconciliation measure approved last month by the House includes $45 billion over four years for immigrant detention, a threefold spending increase. The Senate is now considering that legislation.

Declaring an emergency to expedite contracts

When Trump started his second term in January, CoreCivic and Geo had around 20 idle facilities, partly because of sentencing reforms that reduced prison populations. But the Trump administration wants to more than double the existing 41,000 beds for detaining migrants to at least 100,000 beds and — if private prison executives’ predictions are accurate — possibly to more than 150,000.

A judge has halted CoreCivic, on Wednesday, June 4, 2025, from housing immigrants facing possible deportation in a shuttered facility that the private prison operator now calls the Midwest Regional Reception Center, in Leavenworth, Kan., pictured Monday, March 3, 2025, unless it can get a permit from frustrated city officials. (AP Photo/Nick Ingram)

ICE declared a national emergency on the U.S. border with Mexico as part of its justification for authorizing nine five-year contracts for a combined 10,312 beds without “Full and Open Competition.”

Only three of the nine potential facilities were listed in ICE’s document: Leavenworth, a 2,560-bed CoreCivic-owned facility in California City, California, and an 1,800-bed Geo-owned prison in Baldwin, Michigan.

The agreement for the Leavenworth facility hasn’t been released, nor have documents for the other two sites. CoreCivic and Geo Group officials said last month on earnings calls that ICE used what are known as letter contracts, meant to speed things up when time is critical.

Charles Tiefer, a contract expert and professor emeritus of law at the University of Baltimore Law School, said letter contracts normally are reserved for minor matters, not the big changes he sees ICE making to previous agreements.

“I think that a letter contract is a pathetic way to make big important contracts,” he said.

A Kansas prison town becomes a priority

CoreCivic’s Leavenworth facility quickly became a priority for ICE and the company because of its central location. Leavenworth, with 37,000 residents, is only 10 miles (16 kilometers) to the west of the Kansas City International Airport. The facility would hold men and women and is within ICE’s area of operations for Chicago, 420 miles (676 kilometers) to the northeast.

“That would mean that people targeted in the Chicago area and in Illinois would end up going to this facility down in Kansas,” said Jesse Franzblau, a senior policy analyst for the National Immigrant Justice Center.

Prisons have long been an important part of Leavenworth’s economy, employing hundreds of workers to guard prisoners held in two military facilities, the nation’s first federal penitentiary, a Kansas correctional facility and a county jail within 6 miles (10 kilometers) of city hall.

Resistance from Trump country

The Leavenworth area’s politics might have been expected to help CoreCivic. Trump carried its county by more than 20 percentage points in each of his three campaigns for president.

But skeptical city officials argue that CoreCivic needs a special use permit to reopen its facility. CoreCivic disagrees, saying that it doesn’t because it never abandoned the facility and that the permitting process would take too long. Leavenworth sued the company to force it to get one, and a state-court judge last week issued an order requiring it.

An attorney for the city, Joe Hatley, said the legal fight indicates how much ill will CoreCivic generated when it held criminal suspects there for trials in federal court for the U.S. Marshals Service.

In late 2021, CoreCivic stopped housing pretrial detainees in its Leavenworth facility after then-President Joe Biden, a Democrat, called on the U.S. Department of Justice to curb the use of private prisons. In the months before the closure, the American Civil Liberties Union and federal public defenders detailed stabbings, suicides, a homicide and inmate rights violations in a letter to the White House. CoreCivic responded at the time that the claims were “false and defamatory.”

Vacancies among correctional officers were as high as 23%, according to a Department of Justice report from 2017.

“It was just mayhem,” recalled William Rogers, who worked as a guard at the CoreCivic facility in Leavenworth from 2016 through 2020. He said repeated assaults sent him to the emergency room three times, including once after a blow to the head that required 14 staples.

The critics have included a federal judge

When Leavenworth sued CoreCivic, it opened its lawsuit with a quote from U.S. District Court Judge Julie Robinson — an appointee of President George W. Bush, a Republican — who said of the prison: “The only way I could describe it frankly, what’s going on at CoreCivic right now is it’s an absolute hell hole.”

The city’s lawsuit described detainees locked in showers as punishment. It said that sheets and towels from the facility clogged up the wastewater system and that CoreCivic impeded the city police force’s ability to investigate sexual assaults and other violent crimes.

The facility had no inmates when CoreCivic gave reporters a tour earlier this year, and it looked scrubbed top to bottom and the smell of disinfectant hung in the air. One unit for inmates had a painting on one wall featuring a covered wagon.

During the tour, when asked about the allegations of past problems, Misty Mackey, a longtime CoreCivic employee who was tapped to serve as warden there, apologized for past employees’ experiences and said the company officials “do our best to make sure that we learn from different situations.”

ICE moves quickly across the U.S.

Besides CoreCivic’s Leavenworth prison, other once-shuttered facilities could come online near major immigrant population centers, from New York to Los Angeles, to help Trump fulfill his deportation plans.

ICE wants to reopen existing facilities because it’s faster than building new ones, said Marcela Hernandez, the organizing director for the Detention Watch Network, which has organized nationwide protests against ICE detention.

Counties often lease out jail space for immigrant detention, but ICE said some jurisdictions have passed ordinances barring that.

ICE has used contract modifications to reopen shuttered lockups like the 1,000-bed Delaney Hall Facility in Newark, New Jersey, and a 2,500-bed facility in Dilley, Texas, offering no explanations why new, competitively bid contracts weren’t sought.

The Newark facility, with its own history of problems, resumed intakes May 1, and disorder broke out at the facility Thursday night. Newark Mayor Ras Baraka, a Democrat who previously was arrested there and accused of trespassing, cited reports of a possible uprising, and the Department of Homeland Security confirmed four escapes.

The contract modification for Dilley, which was built to hold families and resumed operations in March, calls its units “neighborhoods” and gives them names like Brown Bear and Blue Butterfly.

The financial details for the Newark and Dilley contract modifications are blacked out in online copies, as they for more than 50 other agreements ICE has signed since Trump took office. ICE didn’t respond to a request for comment.

From idle prisons to a ‘gold rush’

Private prison executives are forecasting hundreds of millions of dollars in new ICE profits. Since Trump’s reelection in November, CoreCivic’s stock has risen in price by 56% and Geo’s by 73%.

“It’s the gold rush,” Michael A. Hallett, a professor of criminal justice at the University of North Florida who studies private prisons. “All of a sudden, demand is spiraling. And when you’re the only provider that can meet demand, you can pretty much set your terms.”

Geo’s former lobbyist Pam Bondi is now the U.S. attorney general. It anticipates that all of its idle prisons will be activated this year, its executive chairman, George Zoley, told shareholders.

CoreCivic, which along with Geo donated millions of dollars to largely GOP candidates at all levels of government and national political groups, is equally optimistic. It began daily talks with the Trump administration immediately after the election in November, said Hininger.

CoreCivic officials said ICE’s letter contracts provide initial funding to begin reopening facilities while the company negotiates a longer-term deal. The Leavenworth deal is worth $4.2 million a month to the company, it disclosed in a court filing.

Tiefer, who served on an independent commission established to study government contracting for the Iraq and Afghanistan wars, said ICE is “placing a very dicey long-term bet” because of its past problems and said ICE is giving CoreCivic “the keys to the treasury” without competition.

But financial analysts on company earnings calls have been delighted. When CoreCivic announced its letter contracts, Joe Gomes, of the financial services firm Noble Capital Markets, responded with, “Great news.”

“Are you hiding any more of them on us?” he asked.

Hanna reported from Topeka, Kan. Associated Press writers Joshua Goodman in Miami and Morgan Lee, in Santa Fe, N.M., contributed reporting.

WASHINGTON — To save its takeover of U.S. Steel, Japan’s Nippon Steel agreed to an unusual arrangement, granting the White House a “golden share” that gives the government an extraordinary amount of influence over a U.S. company.

New details of the agreement show that the structure would give President Donald Trump and his successors a permanent stake in U.S. Steel, significant sway over its board and veto power over a wide array of company actions, an arrangement that could change the nature of foreign investment in the United States.

The terms of the arrangement were hammered out in meetings that went late into the night on Wednesday and Thursday, according to two people familiar with the details.

Representatives from Nippon Steel — which had been trying to acquire the struggling U.S. Steel since December 2023, but had been blocked by the Biden administration over national security concerns — came around to Trump’s desire to take a stake that would give the U.S. government significant control over the company’s actions.

Nippon had argued that this influence should expire — perhaps after three or four years, the duration of the Trump administration. But in the meetings, which were held at the Commerce Department, Trump officials led by Commerce Secretary Howard Lutnick insisted that the golden share should last in perpetuity, the two people said.

Under the terms of the national security pact, which the companies said they signed Friday, the U.S. government would retain a single share of preferred stock, called class G — as in gold. And U.S. Steel’s charter will list nearly a dozen activities the company cannot undertake without the approval of the American president or someone he designates in his stead.

Activities requiring the president’s permission include the company transferring production or jobs outside the United States, closing or idling plants before agreed-upon time frames and making certain changes to how it sources its raw materials.

While the companies have called their deal a “partnership,” U.S. Steel has not issued any security filings to indicate that it has significantly altered the terms of its $14.9 billion sale to Nippon, which shareholders approved 14 months ago.

In an update Saturday to members of the United Steelworkers union, which had strongly opposed a sale to Nippon, its president, David McCall, expressed displeasure about the deal.

“We’re disappointed that President Trump reversed course, jeopardizing the future of American steel making by allowing the merger, now described as a ‘partnership,’ despite over a year of the president speaking forcefully against it,” he said.

Lutnick wrote on the social platform X on Saturday that the deal would revitalize U.S. Steel and help expand steel production in the United States.

“The Golden Share held by the United States in U.S. Steel has powerful terms that directly benefit and protect America, Pennsylvania, the great steelworkers of U.S. Steel, and U.S. manufacturers that will have massively expanded access to domestically produced steel,” he said.

In a statement, Kush Desai, a White House spokesperson, said: “Steel is the backbone of a modern economy and military. The Trump administration is committed to ensuring that foreign business decisions do not undermine our national and economic security.”

A spokesperson for Nippon declined to comment. U.S. Steel did not respond to a request for comment.

It’s not uncommon for the U.S. government to raise national security concerns about foreign investments in American companies. The government generally has wide latitude on the conditions it imposes, and reaches dozens of deals each year with companies to address them. But the agreement with the steel companies — the details of which are not public — appears to give the U.S. government unusually expansive power.

The U.S. government has historically taken stakes in companies only when they were under financial duress or played a significant role in the economy. During the 2008-09 financial crisis, for example, it acquired a large stake in General Motors as part of a bailout and took control of mortgage giants Fannie Mae and Freddie Mac.

The U.S. Treasury sold the last of its stake in General Motors in 2013. Trump has intermittently floated the idea of releasing Fannie Mae and Freddie Mac from government control.

It was not yet clear if the president might demand a golden share in other negotiations that have stalled over national security concerns, such as those involving TikTok, the Chinese social media platform.

But the talks with the U.S. steel titan and its Japanese acquirer provide another example of Trump taking an expansive interpretation of his power as commander in chief.

Under the terms of the deal with the steel companies, the president could exert significant influence over U.S. Steel’s board. The president has the authority to directly appoint one of the board’s three independent directors, and approve or reject appointments for the other two, the two people familiar with the negotiations said.

The golden share in U.S. Steel cannot be transferred or sold by a future president, they said. They also described the share as “noneconomic,” meaning that it would not affect the size of other U.S. Steel shareholders’ stakes or give the U.S. government the chance to directly profit from U.S. Steel in the form of dividends.

For many national security experts, the concept of the golden share itself is perhaps more seismic than the terms of the actual security agreement.

Aaron Bartnick, an official in the Biden White House and Treasury Department who worked on national security reviews of foreign investments, said that taking equity in a company as a condition for such an approval was “pretty unprecedented.”

“It’s not at all clear to me how the equity stake — as opposed to just the associated governance rights — is necessary for safeguarding national security,” he added.

Lutnick, a former New York bond broker, has been particularly interested in injecting out-of-the-box thinking from the investment world into Washington. He has expressed interest in helping to establish a sovereign wealth fund, and has been a strong proponent of the golden share, a concept familiar to Wall Street investors who have dealings in countries such as Britain, China and Brazil.

While such investment deals are typically led by the Treasury Department, it was Lutnick who led the negotiations with Nippon Steel and U.S. Steel, partly because of his advocacy for the golden share idea. David E. Shapiro and Michael Grimes, senior officials at the Commerce Department who work on its newly created “investment accelerator,” also played key roles in the discussions last week, shortly after Lutnick had returned from trade talks with Chinese officials in London.

Trump had ordered a new national security review of Nippon’s deal with U.S. Steel soon after taking office. Government agencies offered Trump suggestions for ways to mitigate any national security concerns arising from Nippon’s acquisition, but Trump had rejected them. The concept of the golden share, however, appealed to Trump. About a week and a half ago, Trump asked Lutnick to finalize the arrangement.

While Lutnick agreed to some concessions, he also demanded that the president be able to veto the company’s actions in nearly a dozen areas, including decisions around relocating U.S. Steel’s headquarters or factories.

While talks were held at the Commerce Department on Thursday night, Israel had attacked Iran’s nuclear facilities. The conflagration diverted Trump’s and the White House’s attention Friday. But by late Friday afternoon, Trump had signed the papers finalizing the deal.

“We have a golden share, which I control, or the president controls,” Trump told reporters Thursday. “Now I’m a little concerned whoever the president might be, but that gives you total control.”

Globally, golden shares have typically been reserved for companies that countries consider national champions: Brazil owns a stake in the plane maker Embraer; China has an indirect stake in TikTok’s parent, ByteDance; and the United Kingdom holds a golden share in the defense company BAE systems.

U.S. officials have historically taken issue with these structures, arguing instead for freer markets. European courts have struck down a number of golden shares on grounds that they limit the flow of capital.

Related Articles

Business People: Suresh Krishna takes over as CEO at Proto Labs

Real World Economics: Storm clouds gathering for a new farm crisis  

Working Strategies: Competing offers prove both a good, and bad, dilemma to have

Sonnen’s Pet Shop, among city’s oldest stores, closes after over 130 years downtown

Meta invests $14.3B in AI firm Scale and recruits its CEO for ‘superintelligence’ team

Security experts said the adoption of a golden share in the United States could permanently alter the way that foreign investors view deal making in the country.

“A bigger issue is the messaging that it sends to the market, which is the U.S. government is intervening increasingly in transactions that don’t seem to have — by traditional standards — significant national security risks,” said Stephen Heifetz, a partner at the law firm Wilson Sonsini Goodrich & Rosati.

“It is going to cause people to spend more time thinking about the obstacles to investing in the U.S. market,” he said.

This article originally appeared in The New York Times.