Charles M. Cawley, who led the move of MBNA Corp. from Maryland to Delaware and helped build it into the world's second-largest credit-card company, will retire Dec. 30, capping a 22-year career as a financial innovator and influential civic leader with strong political ties.
MBNA's Maryland roots will continue to be felt in the executive suite. The 63-year-old Cawley will leave two former Baltimoreans to head the company, which employs 1,200 at an operations center in Hunt Valley - a fraction of the 10,500 it employs in Wilmington and elsewhere in Delaware.
In keeping with a transition plan announced in mid-2002, Bruce Hammonds will take over as chief executive after Cawley steps down, the company said yesterday. Hammonds, 55, currently is chairman and chief executive of MBNA America Bank, MBNA Corp.'s primary subsidiary.
John Cochran, 52, will replace Hammonds as chief executive at MBNA America Bank. He currently is president of the unit.
Both Hammonds, a University of Baltimore graduate, and Cochran, a graduate of Loyola College, have worked with Cawley since before MBNA's founding in 1982, when it was part of Maryland National Corp.
"The great thing about that company is that all of those leaders have been with that company from the beginning, so that tells you something about the man, that nobody left," said Francis X. Kelly, a former Maryland state senator and friend of Cawley's since the early 1960s. "He's a marketing genius."
Cawley was a central figure in what some say turned out to be one of the biggest legislative blunders in recent Maryland history.
In the early 1980s, interest rates were sky high, prompting many credit card companies to boost rates to keep pace with market conditions. But state law limited the interest rates Maryland companies could charge.
Concerned about protecting consumers, state lawmakers balked at changing the law after Maryland National threatened to move to Delaware, where banking laws were more liberal. At the time, the company's budding credit-card subsidiary employed about 200 workers.
"The point was that it was putting Maryland at a terrific disadvantage," said Mark Wasserman, who was on now-Comptroller William Donald Schaefer's staff when he was mayor of Baltimore. Wasserman recalls taking a trip to Annapolis with Schaefer, who tried to warn lawmakers about the potential consequences of the law.
Schaefer's words fell on deaf ears and the bank made good on its threat, with the result that Maryland lost what turned into a credit card giant that today has $113 billion in outstanding loans and a 15 percent share of the U.S. market. Wilmington has been transformed by MBNA, which owns six opulent office buildings downtown and is spending about $32 million to renovate a former courthouse for its new headquarters.
Cawley ran MBNA from its founding as a subsidiary of MNC Financial Inc., which was bought by NationsBank in 1994. MBNA was spun off and taken public in 1991, raising $955 million in its initial public offering.
Cawley, who was paid $50.4 million in cash and stock last year, pioneered the marketing of "affinity cards," which appeal to customers with affiliations to sports teams or professional organizations. One featured an aerial view of Oriole Park at Camden Yards, drawing thousands of O's fans to sign up for the card.
Under Cawley, MBNA has spent lavishly on offices and corporate jets, while giving generously to charities, including several in Maryland.
The company and its executives also give generously to politicians. Cawley friend C.A. Dutch Ruppersburger, the former Baltimore County executive who now is in Congress, is among those who have benefited from MBNA's largess in past years, raising ethical concerns among some government watchdog groups in 1999.
Ruppersburger and Kelly, the former senator, were among those who helped persuade Cawley to bring an operations center to Baltimore County in 1996, helping to spark a revival in the Hunt Valley business center.
Arielle Whitman, an analyst at Sandler O'Neill & Partners LP, said operations centers such as the one in Hunt Valley have helped MBNA spread its risk by becoming less dependent on any one area. She described Cawley's departure as a nonevent for the company.
"This management team has been together for a very long time," she said. "I don't expect any hiccups down the road."