Tuesday, July 22, 2014
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CEO Lord: Why I'm moving Sallie Mae to Delaware

Will Sallie Mae succeed the former MBNA as Delaware's most dynamic financial company?

CEO Lord: Why I'm moving Sallie Mae to Delaware

"Delaware's the home of the consumer credit business," Sallie Mae (formerly Student Loan Marketing Corp.) chief executive Albert Lord told us reporters in a phone conference this morning. "There's a lot of expertise in Delaware. You recently lost MBNA in an acquisition to Bank of America," which has laid off thousands since buying the former credit card giant four years ago, leaving "a lot of talent available" for hire.

As I wrote yesterday, Sallie Mae plans to move its headquarters to the Newark, Del. area from Reston, Va. Lord said he's looking for sites to accomodate up to 2,000 additional workers in the neighborhood as Sallie Mae closes offices elsewhere and weighs plans to start a bank holding company and other businesses.

Although Delaware plans to give Sallie Mae $3 million if it adds all 2,000 jobs, Lord added that his plans aren't yet set, and may not end up including major expansion, just the headquarters, and some executives moving up here from Virginia.

Sallie Mae opened an office in Newark two years ago, and now employs 891 servicing loans - "call center folks, collection folks, underwriting people. An amalgamation of talents and cultures," as Lord put it. The office is run by John Hewes of West Chester, a Norwood native (corrected) and St. James High grad who used to run the credit desks, among other things, at MBNA.

Could Sallie Mae succeed MBNA as Delaware's most dynamic company? Sounds ludicrous at first: Sallie Mae lost a bruising struggle with President Obama and Democrats in Congress and has been eliminated from its old role delivering subsidized student loans and keeping a cut of the proceeds. It's now limited to servicing loans, making private loans, and trying to figure out new business lines.

But Lord is ambitious to "restructure" his company. U.S. Sen. Tom Carper (D-Del.) and Rep.Mike Castle (R-Del.) were among Sallie Mae's most vigorous defenders in Washington. Is moving here Lord's payback? "Politics always affects one's thinking," he said. "We want to be where our representatives are supportive; it was, of course, a plus."

But "the biggest plus was Gov. (Jack) Markell, and the general business attitude" in Delaware, Lord added. Markell hired Sallie Mae last year to manage a tax amnesty, and brought in more than double the expected $10 million. A former Nextel and Comcast exectuive, Markell "knows what we need," Lord said.

Markell and his economic development guru, former Happy Harry's Discount Drugs owner Alan Levin, have been scrambling to lure companies like Sallie Mae to replace jobs lost to layoffs at BofA, DuPont, Valero Energy and other employers. "In Delaware, every job matters," Markell noted.

Sallie Mae had other friends, like US Rep Paul Kanjorski, D-Pa., whose hard-coal-country district includes another Sallie Mae office, I pointed out. Did the company consider locating in Pennsylvania, and was Gov. Rendell's administration any less positive than Markell's? Lord pleaded the Fifth Amendment on that one.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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