VIENNA, Va.–In the wake of an explosive 2023 CNN report that alleged Navy FCU has the widest disparity in mortgage approval rates between White and Black borrowers of any major lender in the U.S., the credit union said an external review it commissioned has found “no race-based decision making” in its underwriting.
Following the CNN report in December 2023, the $171-billion Navy Federal hired civil rights lawyer and former commissioner of the U.S. Commission on Civil Rights, Debo Adegbile of WilmerHale, to review its lending.
“CNN’s analysis was incomplete, and the article’s suggestion that Navy Federal discriminates against its members is unsupported,” said Adegbile. “In fact, our review found that when all relevant factors are controlled for, which CNN did not do, the difference in approval rates between Black and White borrowers falls to less than 1%. The remaining difference in approval rates is explained by legitimate, non-race factors like income verification and incomplete credit applications. Navy Federal is exploring opportunities to enhance its mortgage lending practices and drive further access to home ownership.”
‘We Treat Our Members Fairly’
In a statement accompanying the release of Adegbile’s findings, Navy Federal said, “That external review confirmed what we at Navy Federal know to be true – we treat our members fairly, regardless of their race or background,” the credit union said in a statement. “Mr. Adegbile has now completed his review and found no race-based decision making in our mortgage underwriting. His analysis showed that when all non-public underwriting factors are accounted for – including credit score, income verification, debt-to-income ratio, and incomplete credit applications – any suggestion of discrimination by the CNN article is completely unsupported.
“As the largest home lender to Black Americans by percentage of loans successfully made, we continue to work to make home ownership accessible to all,” Navy FCU added.
The CNN report has led to the filing of lawsuits, a press conference by the Rev. Al Sharpton that also included the announcement of a class action lawsuit, and letters from Congress demanding answers.
‘Values’ All Members
“Navy Federal values each and every one of our members. Black members make up one in four of our members, and we rank first among large lenders in the percentage of mortgage loans made to Black borrowers,” the credit union said in its statement. “We are proud to serve as an industry leader in expanding economic opportunity for our 13 million members, and we are committed to identifying opportunities to further drive home ownership. Working with our internal stakeholders and external partners, we are currently examining initiatives to build on our mission of expanding access to credit for our diverse community of members and continue our efforts to address systemic barriers to home ownership. This is a challenge that requires action across the industry, and we are working to make sure we do our part.”
Navy FCU said its initiatives have included:
- A newly created Office of Financial Opportunity, led by Executive Vice President of Real Estate Lending Brittani Ivey.
- Free financial counseling and credit-modeling products to help its 13 million members around the world “learn how to build and maintain credit”
- Unique support for first-time home buyers of modest means, educational seminars for members, and more.
Statement from America’s Credit Unions
Following release of the report, Carrie Hunt, chief advocacy officer with America’s Credit Unions, issued a statement saying, “We commend Navy Federal for proactively undertaking an independent analysis to take a hard look at their internal practices and data, and hearing concerns raised by lawmakers and other stakeholders. Navy is one of the nation’s top lenders in terms of the percentage of its mortgage loans originated to borrowers in the Black community. America’s Credit Unions and the industry as a whole are committed to providing safe, affordable financial products and services to all. Navy is making clear its continued commitment to its members by establishing an Office of Financial Opportunity. We will continue to support efforts to identify gaps in financial services and work toward solutions to accomplish this mission.”
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