A round of top-management musical chairs has put Advanta Corp. back at the center of consumer credit industry attention.
The credit card issuer that recently set off legal alarms when it joined in a marketing program with American Express Co. started a chain reaction this week when its president and chief operating officer resigned.
The executive, Richard A. Greenawalt, is leaving to work for an auto lender and was replaced by David A. Brooks. Mr. Brooks spent the last three years as executive vice president of Visa U.S.A., which has sued Advanta over its American Express venture.
And that is just part of a web of political and personal intrigue that has the credit industry abuzz.
Mr. Greenawalt, 53, in his new role as chief executive officer of Olympic Financial in Minneapolis, will rejoin Warren Kantor, a retired vice chairman of Advanta and acting Olympic CEO who will now serve as chairman.
Mr. Brooks, 57, with an impressive list of senior-level credentials from places like Citicorp and First Chicago Corp., will be reunited with Advanta CEO Alex W. Hart.
Mr. Hart - who once reported to Mr. Brooks at First Chicago - has become one of the more vocal critics of MasterCard and Visa policies that prevent closer alliances between banks and American Express.
After pondering the announcements made late Monday, industry observers found it easier to understand Mr. Greenawalt's move than Mr. Brooks'.
"There were just too many chiefs" at Advanta, said James Shanahan, principal with Business Dynamics Consulting. "Something had to happen sooner or later."
Mr. Greenawalt was one of the Spring Hill, Pa., company's old guard, as was Mr. Kantor and Robert A. Marshall, who resigned in October. Chairman Dennis Alter is the only survivor from that faction that began to break apart when Mr. Hart arrived in 1994.
Mr. Hart, former chief executive officer of MasterCard International, recruited a number of key executives from the association and has pushed Advanta aggressively beyond credit cards. The company recently hired William J. Razzouk from America Online Inc. and Olaf Olaffson from Sony Interactive Entertainment as CEO and vice chairman, respectively, of Advanta Information Systems.
Mr. Brooks rounds out Mr. Hart's hand-picked team at the eighth-largest bank credit card organization.
Mr. Hart "is a very shrewd manager with clear strategic vision," said Anat Bird, chief operating officer of Roosevelt Financial Group in St. Louis. "He's balancing his management team with a complete representation of the best minds in the credit card business.
"It's a very smart thing to do," said Ms. Bird, who in a previous consulting job did work for Advanta.
Still, Mr. Hart raised eyebrows by recruiting his old friend and former boss away from an organization at legal loggerheads with American Express.
Mr. Hart said Mr. Brooks' association with Visa is a plus. "We believe that our membership in both associations is crucial to our future," Mr. Hart said. He called Mr. Brooks "the finest retail banker in America."
During his negotiations with Advanta, Mr. Brooks said he stayed clear of the legal maneuverings, adding that Visa had put a "Chinese wall" around him.
"I don't think I have any thing valid to put in play on either side," said Mr. Brooks, who oversaw member relations and had a close relationship with his current boss and another former banking colleague, Visa U.S.A. president Carl Pascarella.
Advanta continues to abide by a "standstill agreement" not to market the Rewards Accelerator product with American Express through Jan. 22.
"I have spent more time running a business than I have being an association person," said Mr. Brooks. "I'll never regret my stay here, but I really am anxious to get back and be actively engaged in the business side of it."
But Mr. Greenawalt's departure led Janet McCabe, analyst with Legg Mason in Baltimore, to downgrade Advanta to market perform from buy. She said called it a "psychological negative," compounding uncertainties in the third-quarter earnings report.
Mr. Greenawalt - a MasterCard director and a former Citicorp colleague of Mr. Brooks - said the timing was right after nine years at Advanta to "take a shot at a CEO job at a niche finance company." His hiring ended a four-month search to replace Jeffrey C. Mack, who left Olympic in a strategic disagreement.
