Navy Federal Credit Union, the largest credit union in the United States, is under fire for exhibiting the most substantial racial disparities in mortgage approval rates among major lenders.
The disparities, reaching new heights in 2022, underscored a pronounced contrast in approval rates for white and Black borrowers.
Recent Consumer Financial Protection Bureau data indicated that Navy Federal approved over 75% of white applicants for new conventional home purchase mortgages in 2022. In stark contrast, the approval rate for Black borrowers applying for the same type of loan was less than 50%. The nearly 29-percentage-point gap in approval rates at Navy Federal stands out as the widest among the top 50 lenders originating the most mortgage loans last year.
Even when considering similar incomes and debt-to-income ratios, the racial disparity persisted. Navy Federal approved a higher percentage of applications from white borrowers earning less than $62,000 annually than Black borrowers earning $140,000 or more.
A detailed statistical analysis conducted by CNN revealed that Black applicants to Navy Federal were more than twice as likely to be denied compared to white applicants, even when multiple variables, including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics, were identical.
Navy Federal, initially founded in 1933 to serve Navy employees and now open to all armed forces members, Department of Defense personnel, veterans, and their relatives, boasts about 13 million members and holds over $165 billion in assets. Last year, the credit union rejected approximately 3,700 Black applicants for home purchase mortgages, potentially impeding their path to homeownership, notably as interest rates spiked.
Bill Pearson, a spokesperson for Navy Federal, defended the credit union’s lending practices.
“Navy Federal Credit Union is committed to equal and equitable lending practices and strict adherence to all fair lending laws,” Pearson said.
However, experts in mortgage lending and advocates for fair housing express concerns about the institution’s practices, emphasizing that the racial gaps in approval rates raise questions about Navy Federal’s commitment to fairness.
The widening gap in homeownership rates between white and Black Americans, exemplified by Navy Federal’s 2022 approval rates of 77.1% for White applicants, 55.8% for Latino applicants, and 48.5% for Black applicants, mirrors a broader national issue. In comparison, other major lenders like Wells Fargo, US Bank, and Bank of America exhibit smaller racial approval rate gaps.
CNN reported that advocates have urged lenders to improve automated underwriting systems to reduce racial disparities in decision-making. Some experts pointed out that Navy Federal’s unique member base may have different financial characteristics than large banks, potentially influencing the observed racial differences.
While federal regulators review banks’ lending under the Community Reinvestment Act, the network reported that credit unions like Navy Federal are not subject to the same scrutiny. Calls for legal revisions to ensure credit unions adhere to similar rules as banks have continued.
Sara Pratt, a lawyer at Relman Colfax, noted that racial disparities in mortgage lending may also be linked to loan officers assisting white borrowers more than Black ones. Despite having no evidence of such practices at Navy Federal, Pratt emphasized that the approval rate gaps demand explanations from the lender.
Federal law stipulates that lenders can be in violation of fair lending rules without intentional racism, as a “disparate impact” on minorities can lead to discrimination claims.
This is not the first time Navy Federal has faced scrutiny over racial disparities, as a previous analysis in 2019 indicated significant gaps. This trend appears to have only intensified since then.
Thank you for this information. I have an account with Navy Federal credit Union. How can the government let this go on for so long. Please keep this story on the front burner. I will be pulling my money out as soon as I find another credit Union. I have a great deal of money in the Navy credit union. I am also black to think they would use my money to help whites who make less than me is heart breaking. Because of institutions like this, black people will never get ahead. I am good enough for you to use my money, but not good enough for you to loan me money.
I’m brown..and We “black” people will always find a way! Don’t put that on our people. We’ve came so far and this is just the start of the beginning! But they denied me too..twice. Even with a 800+ score. Even outside of the loan they denied me twice for the flagship card! I just wanted the loan for better credit mix to get to my goal of 850 credit. So I would have pay most of it off the same week and pay a min amount for as long as possible. But there is a workaround with a pledge loan so again…there may be a way available to you and anyone reading if your credit is good enough.
NFCU has always been good to me. Built my credit with them when I listed in the US Navy. I had tough times and they helped me out. From 500 to over 800 credit score. Today a VA home loan and all my credit card with them. They have alway put the service member and veteran first. ⚓️
I understand and agree with you 100%. I too have accounts with this Credit Union and am
Saddened to hear this news. I think a lot of us who are forced to identify as “Black” whatever that is and “African American” although we have no proof that all blacks are actually from Africa… and are actually from the Americas… will be parting ways with this financial institution. We are beyond tired of this same ole story when it comes to people of color in this country and any country. We know our worth and aren’t allowing mistreatment from anyone ever again.
Yes Jacqueline, I will also pull my money out as well. I too, have a large amount of money with Navy. They did approve my mortgage loan, but I was VA, so maybe that why I was fortunate. But I’m not going to let them use my money, especially if they’re doing wrong. We need our own banks and credit unions. Which they would probably block that as well.
I couldn’t have said that better.
Well said and it is heart breaking.
Exactly!!! I feel the same way!!
I completely agree with you, Jacqueline. Well said.
27 years at Navy Federal. What’s going on here? Shame!
As a member I don’t think it is limited to mortgage lending I have been a member for years with all of my direct deposits and primary banking done there but have been turned down for several loan products over the years and was able to get them somewhere else it is sad to think that in this day and age that we are still systematically targeted and the government has yet to put a end to these practices what is the point of having a fair credit act if those who issue loans do not respect them
I have a lot of money there, I’m also thinking about taking my money out . I agree with you.
When you find somewhere that’s not doing the same thing let me know .
This wrong what they do to our people it makes me sick.
Can we get a savvy lawyer who is willing to take up a case against Navy Federal for violation of fair lending practices against black and brown applicants?
I appreciate the information. Information is knowledge and knowledge is power. This is just one more stepping stone that we as a people have to live with. Currently we average amongst the lowest on the totem pole whether we have a substantial amounts of money in these institutions or not. This is ridiculous, 2023 and we still face racial discrimination by not only people of any color besides black, but now by banks that we put our trust and our money into. Guess until we are no longer existing is when we will finally get peace as black individuals. This country was built in the backs of blacks and we still get treated like the lowest of the low…..so much for “ending racism in America, pitiful country!
Wow! I am shocked to hear this. I am black and I also bank with Navy Federal. This is totally unacceptable and I will be following this and other articles like this. I served my country and I want to be treated with the same amount of respect as all others in this country. I use several credit unions. I mat need to transfer my accounts to other banks. Absolutely abysmal…
It sickens me to find this information out but I’m not surprised. Although I have an account at Navy Federal and USAA I will more than likely be moving my money from NFCU to USAA. We always hear how “America is the greatest country on earth” what is this based on? Yes I’m a Black man and yes I’m feed up with crap like this! I encourage my Black and Brown brothers and sisters to VOTE.
Who do i contact about this law suit? I definitely feel discriminated against & I knew it the 1st time, I attempted to get a loan & then a again a 2nd time
The exact same thing happened to me as happened to the guy in the video. I had an approval letter and my score was in the 820-838 range. My dissaproval was for a VA loan. Exactly two week before I was suppose to close they cited the same thing. Income Ratio. I had an approval in Texas for about $ 673,000. Two weeks later I was approved from another bank for 0% down and for $850,000. Veterans United. I want to file a complaint. Who do I do it with?
Very limited data about debt to income ratio. A person making $140,000 a year may have a terrible credit score. Like a $6000.00 Month Mortgage, $3000.00 Month Car payment. Be paying child support to multiple moms,
Owe on a boat. Be paying to be a member of multiple clubs, enjoying several expense vacations each year and so on.
None of this is factored in – CNN trying to paint a picture in your mind by leave info out.
Yep! People are so quick to jump to conclusions.
I really don’t think NFCU is actively trying to reject black loan applicants. It is more likely that one of the measures they use to make their decisions is inadvertently racist.
Like, I (a white person) was just approved for an NFCU loan, but I have NO DEBT, and I put down 75%.
This is very disturbing to hear. I have been a member since 2017 so is my daughter and we are black and we went to this bank because my son is a deceased veteran. I am very disappointed. We are thinking about closing our accounts as well.
This is heart wrenching! The fact that African Americans are making money & business owners but yet are still being compromised is unreal! Today many of us are stomping the industry and the last thing we want to know is that we’re not approved because of the color of our skin. This is an article that needs to be bought to all major headlines. & EVERY application that was denied needs to be examined just like EVERY application that was approved. Its sad that this is still happening & no one is paying close attention. How can this type of discrimination be stopped?
In 2021 I applied for a car loan from Navy Federal Credit Union. I was approved at a higher interest rate. In 2022 I applied for a mortgage and was denied basis on my credit rating. I knew their were something funny about their action.
Car loans are less money –> Less risk for the lender.
If you have a bad credit rating, you shouldn’t be taling out loans.
This is stupid, this is leaving out the most important variable. Credit. It doesn’t matter if your income is the same, the location your buying is the same, your debt is the same. If the Credit is not the same you’re going to get a higher rate. Your credit is the most important factor in this.
I was turned down several times for trying to get a Navy Fed credit card. I will be closing my accounts after reading this article.
A shame that as a Veteran I have my monthly deposit sent to NFCU and I’ve been a member for 2 years every time I submit a loan with Navy Federal Credit Union I get denied I reported this to Transunion and recently opened a account with USAA very happy with my new house in Alabama I plan on finishing payment on truck with NFCU and closing my account immediately 12 denial for loan with NFCU is terrible I understand why I’m a Disabled Veteran Black living in Alabama I hate Navy Federal Credit Union they have always approved white customers quickly and denied me numerous times someone please do something please.
I always thought that lending money is base on credit not base on the color of your skin. Next time when I need a loan I’ll make sure to let NFCU know the color of skin. Maybe I’ll get a lower interest rate.
I was recently denied a mortgage loan with Navy Federal Credit Union. I have been banking with them for years. I am a Service Member. I asked what should my debt to income ratio be and they answered lower.
I’m very disappointed in NFCU. I’m black and have been a member since 1983. I currently have several accounts with them, and in the market to purchase a new home within a matter of months-new construction. NFCU “was” my first choice as a lender. After reading this article, I will NOT even consider them now. Please, keep Americans informed with these unfair loan practices.
I’ve been black member for 20yrs and have never experienced any racism from anyone at NFCU. It annoys me when people who are simply trying to redirect the blame towards someone else when they may have been the issue. What we should be asking is: What is your credit score? What is your debt to income ratio? What is your repayment history?
I’m constantly seeing commercials about banks that offer overdraft forgiveness. When do we start holding everyone accountable for their actions? If you don’t have the consistent means to pay back your loan reconsider your decision. The American Dream starts with Building your credit to buy a car, a house and start a family.
I’m very concerned about more than mortgage loans Credit cards debt and interest needs to be investigated as well. 22 years a member and I can’t borrow 22 dollars with a high interest rate !
They denied me more 3 different tiles even though I was active duty and my credit was good. They took part in ruin my credit.
I was not surprised. After using them for almost 11 years and I can’t be approved for a single Morgage loan. I have 3 houses in Chicago and I’m 11 years active Navy not even a single one of those loans comes from Navy federal. The only loan they gave me was a car loan which is paid off already. Everytime I applied for Morgage loan they always came up with some bull shit almost making me lost bids on the home because they failed to approve the preapproval. The reason why I closed my children’s fixed deposit account with them.
I experienced the same exact discrimination for mortgage, and also for my business they are very races, but guys we got options. Just Google find out how many other black owned credit unions and banks they are we need to take our money out of there and go patronize the banks that own by black owners.
Very despicable! Very demoralizing! Board of Trustees pr the NFCU’s governing body (bodies) should stick their faces on the sand, if for nothing else, in shame that whatever is concocted in the dark secrets of their hearts shall (and has) come to the open. The Scriptures lie not, people!
Robing Peter to pay Paul?? Shamefully so.
I need more details of this. It seems to be that (and I’m black) folks are lying on their applications and getting rejected. I say this because it’s plenty of viral videos from Earn Your Leisure that are telling black people to say their grandad was in the military, get an account, say they make $150,000 a year, and then say their expenses are $2000 a month. Then when Navy Federal does their underwriting these lying mofos are being rejected and it’s contributing to the disparities listed in the articles
I got denied a mortgage loan by navy federal as well. I’m a black person who paid a mortgage for 5 years never late. Purchased another home and got denied by navy federal even with the VA guarantee. This sad. My husband got approved through automated underwriting to purchase a car. They called him the day after with some lie about the car being a risk and to find another car. Well he found another car and then they denied him. They canceled his first application and made him reapply only to deny. I believe this was racially motivated and something must be done.
I agree with Ms. Pratt, it begins with the Loan officer, (once again one of those things you can’t prove), but people your not stupid some will work harder to make it a reality for them than us. I’ve been a victim of a similar situation and found out a few days later the person didn’t put the necessary information to make it happen. But I was blessed and the next person did and I was approved. This undercover, CIA stuff does deserve an explanation, but it will never be the truth!
Thanks for bringing this to light my fiancé and I were recently denied for a home equity loan with navy federal dispute saying we meet the criteria we were given loan terms and after loan went to underwriting we were told we were denied couldn’t believe it we made a combined 300k good credit 30% debt I want justice this is unfair that we are still being denied lending based on our race.. we couldn’t obtain the equity out of our home this was just 3 months ago
When we were purchasing our dream home last year, on the surface NFCU seems to have a very competitive rate and personally I wanted to use them but our realtor advised us otherwise due to his past experiences with credit unions in mortgage lending practices. Not until I read CNN’s findings, now I count myself lucky for not even attempting to go through them.
Appreciate all the insight.. I will be pulling everything away from “Negative credit Union”.. If iam not shit my money not either.. Iam so sick of the foolishness.. Racist ass MF…
Why is it all about race? What about credit ratings? Every time I visit my Navy credit union, majority of workers and customers are minorities, what wrong with that picture? If it is so racists, why would they remain?, there are many more credit unions!!
I am so glad I read this I have been a member of this credit union for about 6months, after reading this I will not continue my membership with them, I dare them use my money for anything and not approve my people for mortgages,
This is one of the most horrific act of in your face racism that needs to be corrected, based on the numbers ratio provided. Praying God to step in and change it, since those with the powere to do so has refused to move in the right direction repented to make it right, since the 2017 negative reporting. This sadly represents the military that should step up, into, and make some noise, allowed practice of a bank thats supposed to represent its all military people, justly and fairly. God can and will prevail over the plans of man. This is whats needed now to pray to change the heart and plans of man, in Jesus Name, Amen. Replcing the unjust wicked decision makers with the righteous ones like King David, men after the Heart Of God, doing what pleases God. No one likes being mistreated or discriminared on for any reason. So stop doing what you dont want done to you, by what you do to others do come back on you as written in the Bible, True Word of God.
This is so wrong. I know I have money in Navy fed and I will have to look at other banks to invest my money in. If it wasn’t for rate locks and timelines I definitely would consider taking my money out. I will move my money out once my terms have been met
I have an account with them as well. I have experienced high rate spikes with them with car loans. Then I apply at another credit union under the same circumstances and it’s significantly lower. I started to think it was a race thing.
This is so true. I have been a member for a few years and have been denied for all loans with them. But, my direct deposit goes into them biweekly. I feel stuck.
I have experienced racial equality ..my daughter and myself went into a branch help with. A locked account . And deposited a government check and had to cash the check to get back our hotel homeless no money but the check..my daughter being eighteen could handled on her own I was asked for my military before they would let her have any of hermoney….I truly think we would have been stranded without them checking to see if I was really military..I clearly had on an Army retired cap..and my I’d should not have been needed and my daughter also had in her possession a validation military I’d and contained my info but showed her age and being a dependent of me..I think I’m on the bandwagon on this being black and being abused and harrassed by these people at the branch have did and spoken enough….GOD HELP US
.PURE HATRED
LOL. What?
Victim much? They are supposed to see your hat and take that as proof?
I will be closing out my accounts from Navy Federal
They look at credit history! This is a fake story. If the credit union does not loan money they do not make money! I have had an account for 20 years and know they are completely fair.
Thank you very much for making me aware of this, I’m a veteran who was going to open an account with Navy Fed.and deposit a substantial amount of money, thanks, I’ll go somewhere else.
I think it is very unfair and We has Military fighting for Our Country as Well as others. There must be some kind of thought How does this keep on Happening. We must be Fair in all things so We as A Nation of People can Grow and be Blessed. If We see this Happening let Speak Up and Stop this Division in Our Black Community!
Only in America… Things will never change…
Really? Only in America?
….with that attitude, I guess things never will change.
Just one question I want to ask then you think about it if god call us home you think we not going at the same time or you think whites first then black not we going at the same time stop learn how to treat all people right that’s why we all can get ahead now
That’s the USA
So SAD !!!!
My daughter was done the same just months ago. How do we file a claim?
The fact that l just opened a business account with them and having to read this, is quite hurting .
How sad. You have the nerve to be racist and discriminate against many people who served for your freedom. May you be judged for your ignorance
I am a member of Navy and never would have suspected this type of ignorance
I believe what is written about NFCU mortgage practices. We went through great difficulty securing a mortgage with them last Summer. We have excellent credit and have been members for over 45 years. We have never had difficulty getting mortgages with other banks. This explains the terrible experience we encountered. I guess Black service members should look elsewhere for mortgages.
Wow, and to think I refer this racist credit union to other blacks to use. Let me find somewhere else to do business. Hulllll will Taylor Perry or Oprah open a credit union please
This is why African-Americans are not willing to fill in the race section of a mortgage application.
I agree with Jacqueline. I have multiple accounts with Navy Federal. I will be checking and CD accounts asap.
Thanks. I also have a Navy Federal Credit Union. They have treated me poorly. With police report and documents they deny me for everything
Look into their hiring practices as well. I’m sure you will find they also discriminate when hiring also. In 2017-18 I was told by a recruiter for Navy Federal not to even bother to apply for a position I was well qualified for if I had ANY blemish on my credit history in my Lifetime. I told her I had a BK 10 years ago due to a layoff at JP Morgan Chase. But that was well past the 7 year mark that it stays on credit. The recruiter for Navy Federal told me it did not matter, do not apply they will reject you for ANY blemish, even a single late payment 20 years ago they will not hire you. I was discouraged from applying as i am sure many others have as well. And why are you checking credit for employment anyway that is just another form if discrimination that needs to be addressed with all employers that check credit. Navy Federal has processes in place that allow them to discriminate by hiring and granting mortgages to as little non whites as possible. And they are well aware of this.
Definitely would not trust any data analysis from CNN. That news organization thrives on stoking racial hate. Would be better to see a real financial analysis from a credible source before passing judgement. Would like to think mortgage lending is based on loan size, credit scores, property value and debt to income ratio. Race should never be a factor.
Here we go again with the WOKE business. I am so sick of it! I turn on the TV and it’s about woke this woke that and it’s over the top. Navy Fed is the best Credit Union ever.
We are all created equal. The disparities of slavery was horrific but that was then and this is now. A lot of people whether black white have all sorts of issues. My ancestors came from a difficult place and struggled although they weren’t bonded into slavery, they had their own problems.
It is the far left agenda that’s pushing this WOKE stuff and it’s dividing our country more than ever. Parents don’t have rights in the school board meetings. Woke in the schools and business is causing racial divide, not unity. Fewer men and women are signing up for the military because it has changed and this WOKE in the military is hurting our national defense. If you’re one of these people pushing the woke ideology, go back in your house and shut the door and stay there because I bet 95% of Americans are sick of it. If you don’t like Navy Fed pick yourself up and go to another credit union or Bank. People are pouring into our country because they love America “just want to get here.” So if you don’t like America please allow someone else to take your place that does.. That’s all that you have to do.
NAVY FED is all about helping ALL members of the military, all the men and women who have been out there fighting for us and our freedoms. so enjoy the holidays be happy because I say life is too short to be talking about these things over and over again. Navy Fed is far, far from being discriminatory. I’m in there all the time and I see nothing but good things. So “Go Navy Fed. ” ️.
Now go on and tell us how “reverse racism” is the REAL problem in America today and how it’s everywhere.
I have accounts, credit cards and loans. I tried to do a home loan and the processor told me they could not pull my credit, but you were able to pull my credit for the car loan and the credit card.
I am very disappointed to here such thing I also have money in I will consider moving my accounts as well.I thought they where for all people Black and White.But I quess that’s not the case.I am really glad I read this.
Now I understand why I have been denied over and over again
I totally agree.
Navy Federal Credit Union needs to revisit the Fair Housing Act of 1968 as well as Redlining. Just like Roland Martin ‘s book, “White Fear.” Some people just don’t want Black people to get ahead.
It’s sad to know that America is holding on to that old “Jim Crow” attitude. We are living in the third decade of the 21st century. Get over it!
Thank you for the article, Mr. Brown. I plan to withdraw my money from Navy Federal Credit Union. Additionally, I plan to notify NFCU leadership my reason for withdrawing my funds. It is appalling that I have less than a 50% chance in getting a mortgage loan at the institution that I have had money in for years.
They overcharge black people for oops feees significantly. This needs to be under investigation. They stole hundreds. They charge if your negative and fail to pull from your savings and they are all linked
Did CNN share *partial truths* just to enrage us?
I was originally outraged — I have no love of NFCU from personal experience. But I had to go back and read this again. Did you notice that “Credit History” and “Credit Score” were not listed in the variables that were the compared and the “same”? I am not saying Black people or minorities have bad credit scores, but to have left credit history — probably *the most critical aspect* of the risk evaluation done by lenders — out of the comparison smacks of an agenda. How someone pays their bills now is probably the best indicator of how well they will pay their mortgage. I have had to turn down hundreds of applicants due to multiple, recent late payments. That doesn’t make me racist. I never evaluated those to determine if there was a racial disparity.
Maybe the problem is that we need to educate EVERYONE starting in high school about credit history, sound credit usage and its impact on your financial opportunities!
VA regulations are VERY clear about how many late payments, collections and charge offs you can have in the last 12 months and still qualify for a VA loan. FHA has similar restrictions but for the last 24 months!
Again — I am not saying that minority applicants have worse credit history, but I am saying that CNN gave us partial truth apparently for the sole purpose of enraging us against a generally reputable lender. What is their agenda?