Magazine article American Banker

Subprime Veteran Joins Civis to Sell to Underbanked

Magazine article American Banker

Subprime Veteran Joins Civis to Sell to Underbanked

Article excerpt

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. …

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