February 25, 2024
In January, legislators called on federal regulators to look deeper at the approval discrepancy of Navy Federal Credit Union after CNN conducted an investigation and found marked discriminatory lending practices.
Navy Federal Credit Union, the largest credit union in the world, is being accused of employing racially motivated lending practices. As WAVY reported, the lawsuit was filed in December, but is now receiving renewed attention due to a news conference presented by a team of attorneys, including Benjamin Crump, the renowned national Civil Rights attorney.
As BLACK ENTERPRISE previously reported, Navy Federal Credit Union stands accused of approving white mortgage applicants at a much higher rate than Black and Latinx applicants. However, the bank says that the disparity in approvals in 2022 does not consider the myriad factors that go into its approval process while also touting its record of lending to Black people and its programs designed to aid fair lending practices.
Navy Federal Credit Union data revealed they denied African American home loan applications at a rate of 52%, Latino home loan applications at a rate of 44%, and White applicants at a rate of just 23%. We will continue to fight for those affected by this disparity in lending! pic.twitter.com/HHDcVXn3nn
Today, victims of Navy Federal Credit Union’s alleged discriminatory lending practices spoke their TRUTH. These brave men & women served our country, & many of them were years-long customers of Navy Federal — only to be unfairly denied access to loans.
📷: @JtTheCr8Guru pic.twitter.com/ltPYwXswFB
MEDIA ALERT: @AttorneyCrump, Adam Levitt, and Hassan Zavareei will hold a news conference tomorrow at 11:30 a.m. ET to discuss the filing of a lawsuit on behalf of Black, Latino, and Native American plaintiffs who sought but were denied home loans with Navy Federal Credit Union. pic.twitter.com/vJwfzEUjv8
Bob Otondi, one of the plaintiffs in the lawsuit, is a Texas-based executive who said during a Feb. 22 news conference that the bank’s decision to reverse their initial approval of his mortgage is, in his view, based on his race. “I know that the reason that Navy Federal denied my mortgage application was because of my race,” Otondi said. “That is very wrong. That flies in the face of everything that makes this country great.”
In January, legislators called on federal regulators to look deeper at the approval discrepancy of Navy Federal Credit Union after CNN conducted an investigation and found marked discriminatory lending practices. Ten Democratic Senators petitioned the Department of Housing and Urban Development and the Consumer Finance Protection Bureau via a letter to investigate the bank’s lending practices and see if the NFCU violated federal anti-discrimination laws.
“Navy Federal’s members have made countless sacrifices in their service to our country,” the senators wrote. “We must do all we can to ensure illegal barriers are not placed on their path to homeownership.”
The Congressional Black Caucus also wrote a letter to the bank, inquiring about setting up a meeting with its CEO as well as wanting both answers and additional data about their alleged racially discriminatory mortgage lending practices.
The letter states, in part, “Navy Federal should explain its increasingly widening racial lending gap and how more than half of the Black service members, veterans, and their families who applied for a conventional mortgage in 2022 were rejected and denied homeownership and wealth building opportunities. Navy Federal should also disclose whether Black applicants were approved at higher interest rates or subject to less favorable terms compared to similarly situated White applicants. We expect to be provided, at minimum, aggregate data from Navy Federal regarding credit scores or any other non-public variable that Navy Federal has suggested serves as an explanation for Navy Federal’s alarming racial approval gap.”
Andre M. Perry, the senior fellow at Brookings Metro, wrote in a December op-ed for MSNBC that although Navy Federal was being placed under scrutiny for their lending practices, that the entire financial industry needed to be held accountable for standard practices that enable and underpin the industry as a whole. Perry likened the mortgage lending issue to the issue of discriminatory home or property appraisals, which similarly skew in favor of white homeowners; Perry followed this up by critiquing “race-neutral policies” and also offered up a possible solution to the problem.
“The news of Navy Federal Credit Union and the racial disparities CNN found should sound an alarm. Navy Federal and its peers shouldn’t shy away from it. It’s in the interest of their members for them to explain the racial disparities CNN found. However, the best response would be from the industry as a whole in the form of new mortgage products and practices that replace the vestiges of our segregated past that are very much legal, accepted and in everyday use.”
RELATED CONTENT: Civil Rights Attorney Ben Crump Files Class Action Discrimination Lawsuit Against Navy Federal Credit Union
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