For almost a quarter century, Michael Nathans has been fighting to improve credit for renters. Has he finally found the solution?
Michael Nathans’ favorite hobby is to take his 38-foot sailboat, High Adventure, out onto the Chesapeake Bay, find a good hard wind, and steer into it. This is the hardest thing to do in sailing, making forward progress against the wind. It requires extreme concentration plus deep knowledge of complex systems – wave action, the weather, your boat’s proclivities – just to make any headway at all.
“If you’re good, you can do it fast and get there way before everyone else,” Nathans says.
In the world of credit, Nathans has been sailing against the wind since 1986. In the ensuing years he has created three separate companies to do something that, like sailing into wind, looks easy from shore but actually turns out to be complicated and hard: Help people with little credit prove that they can be trusted to repay a loan.
“Instead of getting a car loan at 25-percent interest, they can get a car loan at 10-percent interest,” says Nathans, 57. “It’s profound. It can get you out of poverty or it can keep you in poverty.”
Nathans sold the first business. The second ended in disaster. Now he’s launching the third. He now has the support of federal regulators, who agree that his interpretation of a little-known law creates a new opportunity for people to improve their credit without taking on new debt.
If he succeeds, it could mean lower bills and increased wealth for millions of Americans. If he fails, many renters could be stuck in poverty. And Nathans could be stuck right along with them.
“I poured a huge amount of my own savings into this, more than I should’ve,” he says. “But we’re almost there. We’re as close as we have ever been.”
Image courtesy Michael Nathans