Navy Federal Accused of Racial Bias in Mortgage Lending

A lawsuit alleges the credit union approved a higher percentage of mortgage applications from white borrowers than from minority applicants, even after accounting for income and other variables.

• Navy Federal Credit Union is facing a lawsuit accusing the lender of discriminating against minority home loan applicants, with approval rates of 77% for white borrowers, 56% for Latinos, and 48% for Black applicants in 2022.
• The lawsuit was filed following a CNN report that found Navy Federal had the greatest disparity among the 50 largest residential mortgage lenders in the U.S., even after accounting for variables such as applicants' income, debt-to-income ratio, property value, and down payment percentage.
• Rep. Maxine Waters of California, the ranking Democrat on the House Financial Services Committee, expressed shock at the findings and called for Navy Federal to explain its practices and corrective measures.
• Navy Federal has denied the allegations, stating that the statistics in the CNN article did not consider several key credit criteria that all financial institutions rely on to assess mortgage applications.
• The lawsuit seeks to represent all Navy Federal minority home loan applicants from 2018 through 2023, and alleges that Navy Federal approved a higher percentage of applications from white borrowers making less than $62,000 a year than it did from Black borrowers making $140,000 or more.

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