JACKSONVILLE, Fla. – The nation’s largest credit union has the widest home loan approval rate gap among Black and white applicants, revealing a racial disparity issue between borrowers with similar incomes and debt-to-income ratios, according to a CNN analysis including data collected by the Consumer Financial Protection Bureau.
The analysis showed that Navy Federal Credit Union approved more than 75% of white borrowers who applied for a new conventional home purchase mortgage in 2022, while less than 50% of Black borrowers who applied for the same type of loan were approved in 2022.
The armed forces bank has about 13 million members — including military service members, veterans and their families — and multiple locations in Northeast Florida and Southeast Georgia.
CNN reported that while many banks’ approval rates for white applicants are higher compared to Black borrowers, Navy Federal had a 29% gap in approval rates, making it the widest gap among 50 lenders that originated the most mortgage loans last year.
CNN found that Black Navy Federal applicants were “more than twice as likely to be denied as white applicants even when more than a dozen different variables – including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.”
A spokesperson for the credit union responded to the results in a statement:
“Navy Federal Credit Union is committed to equal and equitable lending practices and strict adherence to all fair lending laws. Employee training, fair lending statistical testing, third-party evaluations, and compliance reviews are embedded in our lending practices to ensure fairness across the board. CNN’s recent analysis of mortgage lending data does not accurately reflect our practices, and furthermore their mortgage data model does not account for major criteria required by any financial institution to approve a mortgage loan.
As a not for profit, member centric, membership organization, we are focused on expanding awareness and access to home ownership across the country. We are proud of the fact that we provide a higher percentage of mortgage loans to Black applicants than the vast majority of the top 50 mortgage originators nationwide.
Navy Federal has more than 350 branches worldwide with over half of our stateside branches located in minority communities. In addition, we hosted over 600 home buying education seminars nationwide this year. Navy Federal is a trusted financial partner for all its members and advises each member based on their unique financial needs.”
Navy Federal Credit Union Spokesperson
To read the full report, click here.