Lawsuit Investigation: Does Navy Federal Discriminate Against Black and Latino Mortgage Applicants?

Attorneys working with ClassAction.org would like to speak with Black, Latino or otherwise non-white individuals who have applied for a mortgage at Navy Federal Credit Union.

An investigative report published by CNN on December 14, 2023 revealed that Navy Federal—the largest credit union in the country—showed the widest racial disparity in mortgage approval rates among the nation’s major lenders. In fact, an analysis of public mortgage data by CNN found that Black applicants were more than twice as likely to be denied by Navy Federal as white applicants with the same financial profile.

A handful of proposed class actions have already been filed against Navy Federal in the wake of CNN’s report, and now attorneys working with ClassAction.org want to hear from non-white mortgage applicants who feel they were discriminated against by the credit union. 

If you’re a non-white individual who submitted a home loan application to Navy Federal Credit Union, learn more about what you can do by filling out the form on this page. After you get in touch, an attorney or legal representative may reach out to you directly to ask you a few questions and explain more.

What Does the Report Say About Navy Federal?

CNN’s analysis of home mortgage data made available by the Consumer Finance Protection Bureau shows that in 2022, Navy Federal approved 77.1 percent of white borrowers who applied for a new conventional home purchase mortgage. Only 55.8 percent of Latino borrowers and 48.5 percent of Black borrowers who applied for the same type of loan were approved that year.

According to the article, Navy Federal’s nearly 29-percentage-point gap between Black and white applicants was “by far” the largest observed among any of the top 50 mortgage originators in 2022.

“The disparity remained even after accounting for variables such as applicants’ income, debt-to-income ratio, property value, and down payment percentage,” CNN reported in a December 19 article.

Attorneys working with ClassAction.org believe that, in addition to its stark racial approval rate gap, Navy Federal may systematically offer Black and other non-white borrowers higher-interest loans compared to those offered to white borrowers.

How Could a Lawsuit Help?

A class action, if successful, could force Navy Federal to change how it processes mortgage applications to reduce racial disparities. For example, advocates have urged lenders like Navy Federal to improve their use of automated underwriting systems to deny or approve mortgage applications, given that these algorithms can contain hidden bias and lead to disparate outcomes for non-white customers.

A successful case against Navy Federal could also help Black, Latino and other minority applicants recover money they may have overpaid as a result of the credit union’s possible interest rate markups.

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