Charles M. Cawley

Charles M. Cawley co-founded Wilmington, Delaware-based MBNA, one of the world’s largest issuers of credit cards and, at one point, among the most profitable financial companies in the U.S.

Cawley expanded MBNA rapidly through affinity marketing, meaning MBNA issued credit cards adorned with the various college mascots, national parks, dog breeds, state icons and professional sports teams to which customers forged a relationship. This now seemingly ubiquitous strategy, adopted by many companies since, helped boost the popularity of the company’s cards. Moreover, many customers retained cards with their favored logos, rather than trade them for credit cards with more favorable rates.

Cawley also employed credit analysts to help the company attract a mixed portfolio of cardholders.

Cawley was born in 1940 in Beverly, Mass., and died in 2015 at the age of 75. He graduated from Georgetown in 1962. He began his career with Maryland Bank National Association, where he worked for about 20 years before starting MBNA in 1982. MBNA officially separated from Maryland Bank National Association and went public in 1991. Cawley retired in 2003, succeeded by Bruce L. Hammonds.

Cawley spent considerable time during his life in Camden, Maine and Vero Beach, Florida. He and his wife donated millions to various charitable causes.

In his professional life. Cawley took a small credit card unit of Maryland National and grew it into a notable credit card empire. Bank of America eventually bought out MBNA in 2006 for about $36 billion. At the time of the takeover, MBNA employed more than 25,000. According to a Bank of America press release, the acquisition allowed BofA to add 20 million new customer accounts and become one of the largest credit card issuers in the U.S., with a combined $143 billion in account balances.

In addition to fostering the growth of affinity cards, Cawley helped to spearhead the securitization of credit card debt via so-called asset-backed securities. He essentially repackaged MBNA’s credit card portfolio to other financial backers such as insurance and investment management firms. This process not only spread the company’s risks, it allowed MBNA to offer more credit cards to more individuals, by requiring less MBNA capital to directly back each opened account. This helped MBNA grow quickly.

While still a minority asset class within fixed income, many professional investors see asset-backed securities as a way to diversify bond portfolios, and an additional means to earn yields above Treasury investments. Today, companies such as Bloomberg Barclays track the aggregate performance of securitized credit cards, as they do Treasury securities, corporate bonds and other securitized assets such as commercial mortgage-backed securities.