The executives of a Richmond-based credit card provider say they are on a mission.
The company – called Mission Lane – has been growing by building a customer base of more than 1.7 million Americans who have trouble accessing credit because they either have not established a credit profile or have difficulty maintaining good credit scores.
“Our mission is to serve the half of America that has largely been left behind and ignored by traditional financial service companies,” CEO Shane Holdaway said.
“We all want to make progress, but a little over 100 million Americans – about half of the adult population of the US – struggle to make progress in their financial life either because of lower credit scores, or they don’t have a credit file at all, so they struggle to get into the mainstream financial system,” Holdaway said.
Mission Lane offers credit and debit cards to customers with the goal of giving them an opportunity to build up their creditworthiness, thus what the “lane” part of the company’s moniker refers to.
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“It is about the road of progress,” Holdaway said.
Mission Lane was spun-off as a standalone credit card business from San Francisco-based LendUp Global Inc., a fintech company that had opened its first East Coast office in Chesterfield County in late 2015 and hired more than 50 people in the Richmond area by 2018.
Since the spin-off, Mission Lane has moved to a new office in a renovated former warehouse in the Scott’s Addition area of Richmond and built its staff to about 450 people nationwide, including about 300 in the Richmond area.
Holdaway joined the company as CEO in August 2019, a few months after the spin-off. He had previously worked as CEO of Barclay’s US consumer bank, and prior to that for about 14-plus years for Capital One Financial Corp., including a stint in the Richmond area and then nearly five years as CEO of Capital One’s credit card business in Canada.
Mission Lane’s main customer targets are those “underserved” or “underbanked” people.
The company identifies those customers, prices its products, and manages risk mainly through data analytics, which enable it to identify customers whose creditworthiness may be higher than their FICO scores indicate, Holdaway said.
On the other hand, the company also can identify people whose creditworthiness may be riskier than their scores indicate.
“If you really want to boil it down – it is about data, data, data,” Holdaway said. “That is the key.”
“The bad news is the most financial institutions and even FinTechs are not serving this population, for various reasons,” Holdaway said. “Some of it is because it is technically difficult, because there is a higher risk in lending money to populations that do not have a credit score. You have to be really thoughtful about how to do it. The data and the algorithms and machine learning modes We use are really sophisticated.”
Mission Lane wants to be the company to give consumers a first or even second chance when others won’t, he said.
“Those can be distinct populations. Someone who is just coming out of high school or college may be viewed as risky just because a traditional lender does not have any data on them. So how can we serve them better?” he said. “You may have someone who just went though a rocky divorce or a health challenge, and their credit score may have taken a step back, but they are good hard-working people and they just need another chance.”
The company serves a pretty broad range, Holdaway said. “We also serve prime customers, but much of our focus is on those first-chance or second-chance customers.”
“There is more demand from customers for quality financial services than there is supply of quality financial services,” he said.
Mike Lempner, the company’s head of engineering who was part of the LendUp staff before the spinoff of Mission Lane, said one of the biggest challenges for the underserved customer segment is the credit-risk.
“It is about how we understand the credit risk so that we can come up with a product and a credit line that works for our customers. So we pride ourselves on leveraging third-party data and internal data that we have. We run through a variety of different machine-learning models to assess whether we think somebody is worthy of credit and also secondarily how much credit we are able to give,” Lempner said.
“We can apply machine learning over time, and we are constantly making those machine learning models better over time,” said Lempner, a University of Richmond graduate who previously also worked in consulting helping clients build financial management software systems. “We constantly are revisiting those models, refining them and enhancing them.”
“Income volatility” is a common characteristic, said Chris Cox, who leads customer operations for Mission Lane.
“There are folks who have lived largely a cash-centric kind of lifestyle and don’t have a credit score. Lots of different pockets of folks are coming to us with either damaged credit or trying to build their credit,” Cox said.
“We also see with our customers a desire to get better and have control, and to reduce their anxiety and angst” about financial stability, he said.
“Every day we make decisions that are right for the customer, even it’s not right for our bottom line in the short term,” he said.
In May 2020, Mission Lane moved its headquarters into a 20,000-square-foot, renovated former warehouse space at 1504 Belleville St. in Scott’s Addition. The company also has opened a 4,500-square-foot annex office building next door to its main offices.
The company’s revenue has grown more than 100% each of the last two years, Holdaway said. “This year, if we meet our goals, we will more than double,” he said.
As of the end of 2021, Mission Lane serviced more than $670 million in credit card receivables
The company has raised more than $425 million in investments.
Holdaway said the company is expecting to hire employees “across the board” this year, in engineering, marketing, operations and customer service.
About 90 people work for the company in technology and engineering in Richmond and in San Francisco, and remotely from other locations.
Even with the new headquarters, the COVID-19 pandemic meant the company had to change how its operations worked. It has gone to a mostly remotely workforce, with attendance at the office being optional.
The company also has shifted its hiring to bring on more remote workers. While its offices are in Richmond and San Francisco, it now has employees working in 32 states.
“The vast majority of even our front-line staff is virtual,” Cox said.
That includes a call center staff and customer service staff of about 120 people working in the Richmond area.
“We have started hiring call center staff across the entire country,” Cox said. “We just hired someone in Hawaii a couple of weeks ago.”
Cox joined the company two years ago after a career that included consulting work and management roles for companies such as Genworth Financial Inc. and Capital One.
“The mission of serving our customers and this customer base really put a fire in my belly,” Cox said. “It was something different from what I had been seeing at different financial institutions in my career.”