Largest U.S. credit union scrutinized over approval rates for White and Black borrowers

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 percent 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 percent. 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, down payment percentage, and neighborhood characteristics, were...