A small number of people have an outsize influence on the balance of your bank account, the fortunes of your investment portfolio, how you communicate and what you buy. They're not necessarily masters of the universe, but their thoughts, their actions, and even their whims impact your bottom line. They also make up the Power 30 -- our annual list of the folks shifting and shaping economic currents in the U.S. and around the world.
Financial clout doesn't have a scorecard. No formula or algorithm determines what groups or individuals most have their fingers on the pulse of American pocketbooks or their thumbs on the scales. So our reporters and editors consulted with experts and analysts to assemble this year's list -- which ranges from the man trusted with steering the nation's economic recovery to the woman who just became the youngest Fortune 500 CEO. The roll call may not be scientific or comprehensive, but it highlights the thinkers and decision-makers worth paying close attention to in the coming year.
Monday, we highlighted the top technology innovators. Today, we look at individuals who are redefining the consumer experience: The list ranges from the airline CEO responsible for a slew of new fees to consumers' new Washington watchdog.
- President, LoyaltyOne
In the three decades since the first frequent-flier programs were introduced, consumers have turned accumulating loyalty rewards into a kind of obsession -- not just through airlines, but also credit cards, hotels, even the corner drugstore. Bryan Pearson is the behind-the-scenes marketing whiz responsible for much of the boom: As president of LoyaltyOne, he advises companies worldwide on how to build effective loyalty programs. And he gathers key data on the loyalty "industry" through Colloquy, the research arm of the firm.
The stats tell the story: Since 2000, the number of memberships in loyalty programs has more than doubled in the U.S. to 2 billion-plus, according to LoyaltyOne. But Pearson is convinced that this is just the beginning: New technology is allowing companies to gather more data about their regular customers -- and, in turn, to make more targeted and timely offers to those shoppers, especially via mobile phones. "The early loyalty programs were about points. Today, it's about the exchange of information," says Pearson, whose recent book, "The Loyalty Leap," provides a road map to forging this next-generation connection with consumers. Privacy advocates, however, have expressed concerns about how this consumer data is used, shared or sold.
But while Pearson is talking about how companies can take advantage of the opportunities that await, he's already done quite well for himself. LoyaltyOne, which is part of the global information giant Alliance Data, has seen its annual revenue grow by 80% over the past five years to nearly $1 billion, Pearson says.
- Director, Consumer Financial Protection Bureau
In the year since his new federal agency was formed, Cordray has already succeeded in rattling many of the biggest banks. In July, the CFPB ordered Capital One to pay $210 million in penalties and refunds to 2 million credit-card customers over deceptive marketing claims for payment-protection and credit-monitoring services. Since then, other major card issuers, including Bank of America and American Express, have begun winding down similar programs.
And in an unprecedented move, the CFPB started monitoring the largest credit bureaus, which maintain credit reports on some 200 million consumers, and often determine whether they can get credit, a job or an apartment. "No one has had supervisory authority -- the kind that we will now be able to exercise," says Cordray, 53. "[We] will have every right to collect and amass information and to get the true story of what goes on in these institutions -- that's been a real question mark for many people."
Next up on the CFPB's to-do list are bank overdraft fees, prepaid cards and payday loans, he says. "We understand the need for short-term credit but want to make sure they don't turn into long-term debt traps," he says. Next year, the CFPB will announce new mortgage rules, including requirements that mortgage servicers work with troubled borrowers to avoid foreclosure and the removal of incentives for lenders to place borrowers in expensive mortgages. Of course, given that Cordray and his agency have faced tremendous opposition from Republicans, his fate -- and that of the CFPB -- likely depends on the outcome of November's election.
- President and CEO, Spirit Airlines
At a time when rising fuel costs and a turbulent economy have bedeviled most airlines, Spirit's revenue has soared. After going public last year, the low-cost carrier became the nation's most profitable airline. "There's nobody within shouting distance of their revenue per mile," says Fred Lowrance, a senior research analyst at Avondale Partners. CEO Ben Baldanza,50, deserves much of the credit, experts say -- but it will also be on him to find ways to keep those numbers up.
Since taking the top spot in 2006, Baldanza has been a driving force behind the low-cost culture, even taking on cleaning tasks at headquarters. ("I have to keep the vacuum cleaner right in my office," he confesses.) Baldanza introduced fees that fliers love to hate, and that other airlines watch -- and emulate. (Spirit was the first to debut the now-ubiquitous checked-bag fee, in 2007.) The latest: raising the cost for a carry-on bag registered at the gate from a current $45, up to $100, effective Nov. 6. Baldanza says the key difference is that Spirit uses new fees to lower fares, while other airlines just tack them on. The carrier's average fare last year was $81, down from $98 in 2007 -- and that low cost appeals to budget, no-frills travelers. "I'm not going to say there's not going to be any more fees, because if we could find a way to make that $80 fare a $70 fare we'd do it," he says.
Spirit often runs just one or two scheduled flights out of a given airport each day, and carries just 1% of the nation's fliers. Baldanza says expansion is on the agenda, but analysts say maintaining Spirit's margins could be tougher as the airline moves into new markets.
Sen. Tom Harkin (D., Iowa)
- Chairman, Senate Committee on Health, Education, Labor and Pensions
As head of his Senate committee, Harkin's decisions on higher education impact millions of families. He supported the temporary extension of the 3.4% rate on the popular Stafford loan, which was set to expire in July, and says he'd like to extend it for at least another year. He's also considering changes to how the subsidized loan's rate is determined and whether it should remain fixed. Also on the table: Harkin, 73, says he'd like students to receive financial counseling before signing up for college loans.
How far any of this goes will depend on the November elections. If Democrats maintain control of the Senate, Harkin will oversee the reauthorization of the Higher Education Act next year. This law controls all federal student aid, including loans and grant funding and eligibility requirements. Harkin says he plans to turn up the heat on states, many of which have cut funding to public colleges. "We can't just say states will cut support for higher education and the federal government will come in and supplant that -- the states have to have some skin the game if we're going to be supplying money," he says.
Harkin also plans to continue his push for a ban on taxpayer money being used by colleges for marketing and recruiting purposes. He's been especially tough on for-profit colleges, convening hearings focused on their low graduation rates and recruiting tactics.