After 15 years in subprime consumer lending, Bruce Hammersley says "the opportunity to lead in a market that has tremendous growth opportunity" led him to quit HSBC Holdings PLC for a fledgling marketer of prepaid cards.
Mr. Hammersley, who became the president and chief executive of Civis Financial Group of North Aurora, Ill., several weeks ago, said in an interview Tuesday that even though the subprime market still offers significant opportunities, the underbanked market, where there is less consolidation and more room for innovation, is more promising.
"I guess there is beginning to be some larger players, but it is still fairly fragmented," he said. "It's a little more difficult of a market to reach. And that's why the opportunity is there."
The lack of a viable credit-scoring tool for the underbanked — something already available to subprime lenders — is one potential area to exploit, he said.
Civis is in discussions with Visa U.S.A. Inc., MasterCard Inc., and Morgan Stanley's Discover Financial Services LLC about cobranding the company's CivisCard, Mr. Hammersley said.
A deal with one or more of those networks would allow customers to use the CivisCard to make payments at retail locations around the country (and, in the cases of Visa and MasterCard, around the globe) and would provide access to even more automated teller machines.
The CivisCard already runs on First Data Corp.'s Star network, which can be accessed by roughly 80% of all ATMs, Mr. Hammersley said. The cardholder can load it only at Civis' two branches, both in Chicago, but Mr. Hammersley said Civis customers will be able to load their cards at all ATMs running on the Star network in the next 60 days.
Civis hopes to finalize a cobranding agreement with one of the major networks "as soon as possible," he said, and it is in discussions with banks about processing the transactions. (CivisCard funds are stored at Taylor Capital Group Inc.'s $3.2 billion-asset Cole Taylor Bank of Chicago.)
Consumers pay a $19.95 initiation fee and a monthly service charge of $12.95 for the CivisCard, which provides them with unlimited bill payments.
Mr. Hammersley said Civis also plans to roll out a payroll card. Many CivisCard customers already receive funds on their cards through direct deposit, but a payroll card would standardize a direct deposit program for employers and could be given the brand of CivisCard or a partner bank, Mr. Hammersley said.
He acknowledged that better established companies like First Data have already entered the payroll card business.
"It is certainly not an empty market. … What we are trying to do is get out there as quickly as possible."
Mr. Hammersley said Civis hopes to expand its branch network and franchise products such as its payroll card to other financial services providers.
Civis, which was founded in 2001 and is privately owned, also provides cardholders with free advice about mortgages and auto loans, and Mr. Hammersley said it hopes to find a way to make money from this activity by collecting referral fees from banks.
He joined Household International Inc. in 1990 and worked in a variety of jobs at that company, which HSBC bought in 2003. In March of last year he was put in charge of business development for the private-label card business.
Mr. Hammersley said that even though the British company has endured a "tumultuous year," he remains "bullish" about HSBC and will remain a shareholder.
"What I learned from HSBC is how to lead during change, … how to manage growth in tough times," he said.
