Gov. Minner bringing her scissors to Newark
New financial services startup to celebrate grand opening
By LESLIE A. PAPPAS, The News Journal,
Posted Monday, May 21, 2007
For the second time this month, Gov. Ruth Ann Minner will cut the ribbon on a new financial services startup created by
former MBNA executives.
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Credit One Financial Solutions (www.creditonefs.com), a lending company offering debt consolidation to consumers with good credit, opened in March and now employs 51 people at its headquarters on Continental Drive in Newark.
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From left to right: Tim Staley, Dan Kennedy, Gov Minner, Paul Thome, Dan Hill, and Joe DePaulo |
Today at 9:30 a.m., it will hold its official grand opening, with speeches by the governor and state dignitaries. The company hopes to double its Delaware work force in 2008.
Credit One decided to locate in Delaware because it is a bank-friendly state and the talent pool is strong, said Joseph DePaulo, the company's chief executive officer. DePaulo worked at MBNA for 14 years and left after its merger with Bank of America.
"This is a great place to find very talented people," DePaulo said. Of the current staff, "a majority -- more than half -- were working at MBNA at one time."
That staff consists primarily of what the company calls ICPs, or individual credit planners, who work with consumers on the phone to consolidate up to $50,000 in debt through an unsecured personal line of credit. Unlike money taken out on a credit card, however, Credit One's loans are structured around fixed monthly payments. The company is marketing its services to consumers via the Internet and direct mail.
The company is the second ex-MBNA startup to make headlines this month.
On May 2, a group of former MBNA workers launched Swift Financial Services (www.swift financial.com), offering $100,000 lines of credit to small-business owners nationwide.
Tim Staley, Credit One's chief operating officer, who also left MBNA after the merger, said he expects to see more Delaware startups from MBNA alumni in the future.
"Things happen for a reason," he said. "There's going to be a lot of good coming out of the MBNA acquisition."
Like Swift Financial, Credit One is partnering with an out-of-state bank to do business.
Loans are originated through MetaBank of Sioux Falls, S.D., and billing services are outsourced through FDR Omaha. The company has licensed its name from Credit One Bank of Las Vegas, after doing market research on a series of different names.
The Delaware company will focus on sales, marketing and data management of clients, DePaulo said.
Credit One's decision to target only prime borrowers -- consumers who pay their bills on time and have high credit scores -- sounds like a smart strategy, said Steven I. Butler, a bank consultant based in Avondale, Pa. Although the company will have to compete to offer the lowest interest rates, the likelihood of its customers defaulting on loans is lower than with subprime borrowers.
"They may have a smaller margin but they'll keep more of it because they'll have fewer losses," Butler said.
Contact Leslie A. Pappas at 324-2880 or lpappas@delawareonline.com.
Originally appeared in The Wilmington News Journal, May 21, 2007