How tennis superstar Emma Navarro's father became rich on the backs of people with poor credit

Navarro and Hildebrand, whose role in the business has never before been detailed, have become two of America’s wealthiest people at the expense of some of the country’s most financially vulnerable. The vast majority of their wealth comes from Las Vegas–based Credit One, a credit card bank that targets subprime customers.

Ben Navarro travels the globe to watch his daughter, Emma, a tennis star Image: Henry Nicholls / Afp / Getty Images; Emateo Villalba / Getty Images

Credit One is commonly confused with the much larger Capital One, which has a nearly identical name and logo. (Capital One had the name first but Credit One introduced the logo in 2006, two years before Capital One.) Forbes estimates that Navarro owns almost half of both Credit One and Sherman. He is the bank’s controlling shareholder as well as a board member; Hildebrand trimmed his ownership in Sherman to a small minority stake a few years ago after falling out with Navarro, 

according to someone familiar with the matter, but held on to his estimated 40 percent stake in Credit One and was still a board member as of late 2024. The pair also helped build one of the nation’s largest debt collection businesses, Resurgent Capital Services, which was part of Sherman from 1998 until 2021, when it was sold.

Navarro pocketed an estimated $170 million from the sale; it’s unclear what Hildebrand, who had already stepped back from Sherman, got from the transaction. Forbes estimates that Navarro and Hildebrand received $2.5 billion and $1.2 billion, respectively, in dividends from Credit One and Sherman over the years.

Neither Navarro nor Hildebrand agreed to be interviewed for this story, but a Credit One spokesperson sent back statements responding to some of our questions. Forbes also spoke with over 30 people, including customers, attorneys and nine former employees of Sherman companies, in addition to reviewing hundreds of pages of public legal and financial documents. What emerges is a portrait of an opportunistic but brilliant duo who anticipated—and profited from—America’s debt binge. 

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“It felt a little slimy the way we made our money,” says Todd Haynal, a former Credit One assistant vice president who worked there from 2014 to 2020. “You’re not only gouging [customers] with fees; you’re also not giving them tremendous ways to help themselves,” he adds. “It isn’t a great product for people who are struggling... it was fee, fee, fee.” 

Credit One disputes this characterisation. “Some people may believe that consumers with limited or imperfect credit don’t deserve access to a mainstream financial product. We don’t share this view,” says a spokesperson for the bank. “Despite the inherent risk of providing credit to consumers with limited or imperfect credit history, through our Credit Rebuilding product, Credit One has established a sustainable, economically viable business model. Many companies have tried but struggled or failed to do the same.” 

Americans are borrowing more than ever, with US household debt (excluding mortgages) hitting a record $5 trillion last year. More than 100 million people, an astounding 42 percent of the US adult popu­lation, have bad (or no) credit, according to a 2022 study published by the credit bureau Experian and consulting firm Oliver Wyman. But many still want credit cards. 

That’s where Credit One has stepped in, targeting customers from “all walks of life,” inclu­ding the “one in three Americans considered to be below ‘prime’,” as described by a Credit One spokesperson, and turning this risky segment into a cash cow. The bank reports assets of $1.7 billion but has paid dividends of $2.4 billion (pretax) since 2010, nearly $1 billion of which Forbes estimates went directly into Navarro and Hildebrand’s pockets. And that’s just what’s publicly disclosed. Credit One sells around 90 percent of “receivables” (the debt its customers run up on their credit cards) to Sherman, according to two former executives. If you add back the $11 billion of debt it sold to Sherman, the bank’s outstanding consumer debt was closer to $13 billion. While most credit card issuers package their loans and sell them to investors, what makes Credit One unique is that a related party—Sherman—is the only known buyer. As a result, most income generated by Credit One loans is captured by Sherman—not Credit One. Forbes estimates Navarro and Hildebrand have netted over $2.7 billion in additional cash distributions through Sherman since 2007. That allows Credit One to keep higher-quality loans on its balance sheet while offloading the debt more likely to be “charged off” (that is, not paid back) to Sherman, which does not have to publicly report its financials. 

Big banks avoid deep subprime customers, but they have no problem lending money to Navarro’s Sherman so it can purchase Credit One’s debt, according to two former execu­tives. “I always thought that was ironic. Because [these banks] would claim they were never going to do subprime,” says one former Credit One executive, who described how Sherman’s lenders would visit Credit One’s Las Vegas offices once or twice a year. Chase and Citi, two of the banks cited by this former executive as having provided the credit lines, declined to comment, while an insider at Wells Fargo, a bank named by another executive as doing business with Sherman, confirmed that both Credit One and Sherman are “very large” clients and have been for decades. “We think very highly of the team,” says the Wells Fargo insider. 

Credit One has grown its net income an average of 30 percent annually for the last 15 years. Total outstanding loans on Credit One cards hit $12.9 billion in 2024, up from $6.8 billion in 2020, according to the Nilson Report, a payments industry tracker. Last year, the bank posted $470 million in pretax income on revenue of $1.7 billion, making it the firm’s best year yet. “It has a remarkable track record,” says Dwayne Safer, a former banking executive-turned-finance professor at Messiah Univer­sity in Pennsylvania. “Overall the business has been very well run.” 

Navarro grew up in a sporting family. He was one of eight children of legendary Williams College football coach Frank Navarro, who served as a model for Norman Rockwell’s painting The Recruit. Frank never went to his son’s sporting events. “He wanted the focus of the house to be on creating entrepreneurs and kids who could take advantage of what this amazing country has to offer,” Navarro told Charleston’s Post and Courier in 2018. 

Navarro paid his own way through college at the University of Rhode Island by waiting tables and, according to the Post and Courier, selling advertising on “VIP cards” that offered students discounts at local businesses. After graduating in 1984, he went to work at Chemical Bank (later absorbed into Chase) issuing loans to mortgage banks and savings-and-loan associations. He then spent two years at Goldman Sachs in fixed income and commodities before moving to Citicorp in 1988, where he was co-head of the mortgage sales and trading department. 

Hildebrand graduated in 1984 from MIT with degrees in economics and computer science and earned a master’s there in mathematics the following year. He also worked at Citi and Goldman Sachs, where he may have met Navarro. 

In 1997, Navarro and Hilde­brand struck out on their own, operating Sherman out of a Manhattan apartment; they moved the headquarters to Charleston after the September 11, 2001, attacks. Navarro was the gregarious, charismatic team leader and dealmaker, while Hildebrand was the left-brained math whiz. 

Sherman set up debt collection firm Resurgent in Greenville, South Carolina, in 1998. To fund its growth, the partners sold 90 percent of Sherman the same year to a pair of insurance firms for $40 million, according to a 2021 Wall Street Journal article. In 2005, Sherman picked up the First National Bank of Marin, a small bank with around 1 million active accounts and less than $400 million in receivables. Twice in the previous five years, federal investigators accused the bank of misleading vulnerable customers with poor or non-existent credit histories to apply for credit cards and then imposing huge fees. Both cases were settled with agreements to reimburse customers; the bank did not admit wrongdoing. 

Sherman rebranded the bank Credit One, kept on CEO Robert DeJong—who still runs it today—and grew by mailing millions of credit card offers each month. In January 2008, Credit One hit $1 billion in total credit card receivables. Things were going so well that by mid-2010, Navarro, Hildebrand and other Sherman affiliates finished buying back the part of Sherman they didn’t own; the total amount they spent was over $900 million. By 2016, Credit One’s loan book had more than quadrupled in size, driven by what could be called a move-fast culture. “It was a little bit like the Wild, Wild West of banking,” says Haynal, the former Credit One assistant VP. “You can’t be all black and white. You’ve got to be able to operate in the grey.” He recalls how one year, end-of-year numbers were reconciled by “a single kid working on a spreadsheet trying to go through a bunch of reports to try to figure out where the missing money was.” 

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A Credit One spokesperson says the bank “undergoes annual safety and soundness examinations” and that it has received “unqualified audit opinions”, meaning a clean review from independent auditors, for the last 20 years. 

As business boomed, the bank’s employees enjoyed the spoils. Haynal remembers one company party at M Resort, a luxe four-star hotel and casino in Vegas, at which all staffers received envelopes stuffed with $500 in cash with which to gamble. Top executives did even better: A few had multiple exotic sports cars, inclu­ding Bentleys, Lamborghinis and Aston Martin Vanquishes, that they would drive to the office, according to Haynal. Another former executive recalls the time when one of the bank’s top execs had a new Aston Martin delivered to the office as lower-level employees watched: “I didn’t appreciate that personally.” 

Credit One’s 18 million customers probably wouldn’t appreciate it either. While most credit card issuers generate more revenue from interest paid on card balances than from fees, since 2013 Credit One has reported the reverse: Just $1.1 billion in interest income, dwarfed by $2.4 billion in customer fees. Since the bank sells most of its loans (and their associated interest income) to parent Sherman, it’s impossible to know the overall ratio of interest to fees, but the operation is clearly a fee machine. One of Credit One’s most commonly issued cards, ‘the Platinum Visa for Rebuilding Credit’, has a $75 annual fee—which increases to $99 after the first year (customers can cancel within 90 days of signing up and have these fees refunded). Then, in some cases, there are additional fees for services such as raising credit limits or applying a payment faster to free up credit. At one point, customers had to pay fees just to change their name, even if they had recently gotten married, according to Haynal. 

Sometimes, the fees surpassed a customer’s credit limit: Numerous Credit One users start with an unsecured card—meaning no deposit or collateral is needed to open the account—with a credit line as low as $300. (A person familiar with the bank says its average credit line is around $1,000.) “They’re just there to take the fees, make money and make sure they keep getting the extra payments of monthly fees,” says Geet, a former customer who asked to be identified by his first name only. Geet signed up for the Credit One card as a student in 2016, confusing it for Capi­tal One, and was approved for a $300 credit line. He barely used it and closed the account last year after paying more than $800 in fees—which felt like “a lot of money for someone with no money”, he says. 

Navarro’s father, Frank (centre), Williams College’s football coach at the time, was asked by Norman Rockwell to model as the coach for his famous 1966 illustration, The Recruit, which ran in Look magazine with an article about recruiting high school athletes Image: Norman Rockwell Museum Collection, Norman Rockwell Art Collection Trust, Nract.1973.128 Image Copyright Norman Rockwell Family Agency. All Rights Reserved

On Credit One’s income statements, one levy trumps all others: Credit Protection, a monthly fee based on the outstanding balance that cardholders can pay to receive leniency on future missed payments in cases of emergency. Last year, the bank brought in $350 million, or about 20 percent of its total revenue, from Credit Protection fees.

Craig DiPaola, a New Jersey–based transportation logistics manager, says he was drawn to Credit One’s American Express card a few years ago after he was recommended it by a credit card research tool operated by Experian. Despite having no memory of signing up for it, DiPaola says he was enrolled for Credit Protection. Each time he would call customer service to opt out of the programme, he was re-enrolled, resulting in some $250 in fees over four years. DiPaola describes the experience as “horrendous” and says he repor­ted Credit One to the Consumer Financial Protection Bureau last year. (One former Credit One exec said the bank did not auto-enroll customers in Credit Protection.) 

“They’re nickel-and-diming these subprime clients,” says Ali Besharat, a professor and marketing department chair at the University of Denver’s Daniels College of Business. “They’re going after a segment that is untapped because it’s a very high-risk segment of clients. They’re going to default.” Credit One reported an average charge-off rate of 8 percent over the past five years, but former insiders say the real rate is higher, since the worst debt is offloaded to Sherman. Haynal recalls the bank’s default, or charge-off, rate to be around 14 percent or higher, while another former senior manager who worked there more recently says charge-offs fluctua­ted between 10 percent and 16 percent. (The industry average is 4.7 percent.) 

The bank has its defenders. “Keep in mind, this is the riskiest consumer in America,” says one former Credit One executive. Adds another: “I think the fees Credit One charges are commensurate with the risk they take on.” 

Analytics firm JD Power ranked Credit One as the worst credit card issuer in America for eight years running. While subprime borrowers tend to be less satisfied with their credit cards in general, Credit One stands out compared to competitors for its high fees and relatively meagre rewards, says John Cabell, managing director of payments intelligence at JD Power. A spokesperson for Credit One said the bank is “unfamiliar with JD Power’s methodology” and “is proud to receive strong ratings and reviews from its customers and numerous publications”.

After an expansion in 2021, Credit One’s headquarters on the Las Vegas beltway is now a sprawling $75 million, 300,000-square-foot complex Image: Shutterstock

Credit One has tried to move a bit upstream, offering a Credit One Bank American Express Card to customers with “average to excellent credit”. However, the card’s benefits fall far short of American Express’ direct offerings: 1 percent cash back rewards and a 29 percent annual percentage rate, versus up to 6 percent cash back on certain purcha­ses and 0 percent APR for the first year with American Express’ Blue Cash Preferred Card. Credit Karma, which has a partnership with Credit One and recommends at least one of its cards highly, says about half of the customers who “matched” with this or similar cards have “poor” credit, while less than a quarter have “good” or “excellent” credit. 

“I feel like they’re sort of trying to tell a story that’s maybe evolving a bit beyond the subprime focus,” says Bankrate’s Ted Rossman, a senior industry analyst specialising in credit cards. “They have moved upmarket in a way,” he adds. But “underneath the hood, they are still [for people with] fair credit at best and subprime at worst.” 

Not surprisingly, Credit One has been hit with lawsuits. California sued in 2021, alleging that the bank “engaged in collection campaigns invol­ving unreasonable frequent and harassing phone call patterns and conduct, even after consumers’ requests to stop the calls”. The state claims that “tens of thousands of consumers received millions of improper automated debt collection phone calls and that many of them were direc­ted to individuals having no relationship whatsoever to Credit One”. Credit One has been fighting California’s requested document production; the state has asked the judge for monetary sanctions on Credit One for obstructing proceedings, which the bank is contesting. The case is ongoing. 

A class action lawsuit in the Southern District of New York has been winding its way through the courts since 2015. The case, which was one of seven similar cases filed against several banks (nearly all of which settled except for Credit One), involved failure to update credit bureaus when clients with bad debts declared bankruptcy. Credit One fought so mightily to avoid giving up information about Sherman and its ownership structure that the judge, Robert Drain, issued a default judgment in 2022 ordering the bank to pay between $50 and $1,000 to each affected customer who didn’t opt out (up to $288 million in all) due to “extraordinary discovery abuse”. The ruling is in limbo after Drain retired a few weeks after his decision; the case was transferred twice, and the current judge, John P Mastonado III, has not made a decision on a motion from Credit One, which is challenging the judgment. 

Low-key Hildebrand, who lives in Charleston and previously served on the boards of two water non-profits, has ploughed his money into financial technology, biotech and artificial intelligence startups. Navarro gave the public the first glimpse of his extreme wealth when he emerged with a surprise bid for the Carolina Panthers NFL franchise in 2018. (He lost out to hedge fund mogul David Tepper.) Navarro’s family office, Beemok Capital, has since spent $450 million on historic properties in Charleston and purchased two tennis tournaments for around $300 million; one of the latter, the Charleston Open, is now named the Credit One Charleston Open. Credit One announced a sponsorship deal for Emma in January 2024. 

Navarro’s profile is growing in South Carolina, where he’s lauded by some of the state’s most powerful figures, inclu­ding former Charleston Mayor Joseph Patrick Riley Jr, who has praised Navarro’s “remarkable impact in South Carolina”, and US Senator Tim Scott, who is, conveniently, the chairman of the Senate Committee on Banking, Housing and Urban Affairs. Scott has described Navarro as a “friend”; Navarro, his wife and at least eight other family members have given more than $8 million to Scott’s Senate campaigns and his short-lived 2024 presidential nomination bid. 

Navarro teaches a class at the College of Charleston’s School of Business on personal growth, and founded four schools in the area that serve 1,700 children. He also owns a theatre, a restaurant and a luxury hotel in the city. His latest project: A roughly 70-acre stretch of Charleston’s downtown waterfront known as Union Pier that he plans to redevelop. He has reportedly put down $250 million so far. “I hope to leave Charleston better off than I found it 20 years ago,” he wrote in a March 2024 opinion piece in the Post and Courier. That’s all well and good, but perhaps he should think more deeply about the source of all those funds. There is a real need being met by providing people with low or no credit with cards. And some of Credit One’s customers are indeed building better credit. But providing that service shouldn’t require charging rapacious fees that exploit the most financially vulnerable.