WASHINGTON–The credit union trade groups are calling an analysis by CNN that found Navy Federal Credit Union highly biased against Black mortgage borrowers “misleading” and further stating some of the conclusions in the analysis need to be corrected.
The trade groups’ did not say what it is that is specifically incorrect in the CNN analysis or methodology.
As CUToday.info reported, CNN said its analysis of home mortgage lending data found the $165-billion Navy Federal approved more than 75% of the White borrowers who applied for a new conventional home purchase mortgage in 2022, but less than 50% of Black borrowers who applied for the same type of loan, based on the most recent data available from the Consumer Financial Protection Bureau.
CNN further stated the disparity was the widest of any of the major lenders it reviewed.
Statement from Groups
In response, the CEOs of CUNA, NAFCU, and the African American Credit Union Coalition (AACUC) issued a joint statement saying, “Credit unions recognize that owning a home is at the heart of many families’ financial dreams. As an industry, we have intentionally worked to address the challenges and inequities that working Americans, including minority and underserved communities, have in achieving this goal.
“Fair lending practices are foundational to the credit union mission; however, we acknowledge there is more work to be done to reduce disparities within our industry,” the statement continued. “It’s unfortunate that a recent CNN analysis misconstrued credit union mortgage lending data to paint an inaccurate picture and draw false conclusions about Navy Federal Credit Union, and the entire credit union industry. The CNN numbers failed to calculate a large number of factors, leading to a flawed headline and disingenuous narrative that misrepresents credit union mortgage lending.”
Corrections Requested
The trade groups said in their statement that some of the key data points that “need a correction for the record.” Their statement said that at Navy Federal Credit Union, 18.4% of NFCU conventional originations came from Black applicants compared to 8.4% for the top 50 lenders.
Overall Data
The groups also released data around credit unions generally, including that:
- Credit unions outperform on key mortgage portfolio share indicators, and that Black borrowers make up 6.5% of credit unions’ mortgage originations compared to 5.5% of banks’, and low-income borrowers make up 8.3% of credit unions’ originations compared to 6.1% of banks’.
- A broader analysis of mortgage lending data shows that borrowers saved as much as $70,000 over the life of a 30-year fixed rate mortgage in 2022 when financing with a member-owned credit union rather than Wall Street banks and mortgage companies. The savings are largest for those with significant credit score challenges.
Navy FCU Statement
As CUToday.inifo also reported, in response, the world’s largest credit union published a statement on its website stating, “Navy Federal was recently included in a news story about lending practices in the mortgage industry. We care deeply about this issue and want you to know the report does not accurately reflect our lending practices and is rooted in an incomplete analysis of lending data that does not account for major criteria required by any financial institution to approve a mortgage loan. We proudly provide a higher percentage of mortgage loans to Black applicants than the vast majority of the top 50 mortgage originators nationwide.
“Our members put their faith in us to do right by them financially, and we stand by the promise that we are abiding by all fair lending practices,” the statement continued.