5 Questions with Raul Vasquez

April 25, 2018

Raul Vazquez is the CEO of Oportun, a community development financial institution (CDFI) with a mission of providing access to affordable credit to the 45 million individuals living in the U.S. who have little or no credit history. Our president & CEO, Barrett Burns, got to know Raul through their service together on the Federal Reserve Board of Governors’ Community Advisory Council, and we’re pleased to welcome Raul to share an update on Oportun in this month’s newsletter.

Oportun is able to offer products to those with limited or no credit history. How has underwriting that population changed over the past few years?

We’ve always believed that there are responsible, hardworking people who would be both willing and able to repay a loan on time, if only they were given the opportunity to do so. It has been nearly a dozen years since we disbursed our very first loan, and our risk engine has become increasingly sophisticated as we continue to add data sources, incorporate insights from 12 years of lending, and leverage machine
learning to ensure our approach improves over time.

Since our first loan in 2006, we’ve disbursed more than $5 billion through more than two million loans and served one million customers. We’ve also helped nearly half of our customers (500,000 people) establish credit history for the first time.

How and why is Oportun leveraging mobile technologies to better serve customers, and how do you
coordinate this strategy with a more localized, personal experience for your customers?

Our goal is to serve customers however they want to be served. If they want in-person service and prefer
making payments in cash, they can come to one of our 270 locations from coast to coast and get the help they need. If they prefer conducting transactions on their mobile phone without ever speaking to a human being, that works, too. We’re also discovering that some people use a combination of both: They might apply for their first loan with the help of one of our customer loyalty representatives at a location and then use their mobile phone subsequently.

How have your previous roles as president of Walmart West and CEO of Walmart.com informed how you approach building a strategy for Oportun?

Oportun’s strategy relies on the combination of advanced analytics, technology, and in-person service. My time at Walmart prepared me very well for articulating and delivering that kind of strategy. Oportun has 270 retail locations from California to Florida, so I greatly benefited from having worked at Walmart and learned the retail business. My experience there also taught me a great deal about how to leverage scale and technology to generate cost savings that we can pass along to our customers.

In California, Oportun is lending under a pilot program to increase access to affordable small-dollar installment loans. What do you hope to learn from the pilot program?

Oportun is actually the largest lender in the program you’re referring to: the California Pilot Program for Increased Access to Responsible Small Dollar Loans. The program was designed to increase the availability of responsible and affordable small loans ($300 – $2,500) for low-income, credit-challenged consumers. Interest rates on these loans are capped at 36%, and lenders may charge a modest origination fee. In exchange, the program mandates that several consumer-friendly features are built into
the loans in order to ensure affordability and help the borrower to establish or rebuild credit.

The program has been a tremendous success. Since 2011, several hundred thousand Californians have begun establishing their first credit score through the program. In addition, a recent report by the California Department of Business Oversight found that multiple loan borrowers in the program saw their credit score increase by an average of 355 points. I think a key learning for many observers is that the program demonstrates that there is more to responsible lending than simply capping interest rates, and you can really make a positive impact on borrowers if you design your product with their success in mind.

American Banker just named Oportun one of the best places to work in fintech. What is it about your
company culture that keeps your employee family happy?

I think the bottom line is that people find true meaning and purpose here. Our mission is to provide affordable loans that help people with little or no credit history establish credit and build a better future.
At Oportun, everyone knows that their work contributes to making a positive difference in the lives of others.

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