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Navy Federal Not Friendly to Black Borrowers

The largest credit union in the US has the widest disparity in mortgage approval rates between white and Black borrowers of any major lender, a trend that reached new heights last year, a CNN analysis found.

According to the most recent data from the Consumer Financial Protection Bureau, the Navy Federal Credit Union, which lends to military service members and veterans, approved more than 75% of the white borrowers who applied for a new conventional home purchase mortgage in 2022. However, CNN found that less than 50% of Black borrowers who applied for the same type of loan were approved.

While many banks also approved white applicants at higher rates than Black borrowers, CNN said the nearly 29-percentage-point gap in Navy Federal’s approval rates was the widest of any of the 50 lenders that originated the most mortgage loans last year.

The disparity remains even among white and Black applicants who had similar incomes and debt-to-income ratios. CNN said that Virginia-based Navy Federal approved a slightly higher percentage of applications from white borrowers making less than $62,000 a year than Black borrowers making $140,000 or more.

A deeper statistical analysis performed by CNN found that Black applicants to Navy Federal were more than twice as likely to be denied as white applicants even when more than a dozen variables – including income, debt-to-income ratio, property value, down payment percentage, and neighborhood characteristics – were the same.

Navy Federal, originally founded in 1933 to serve Navy employees, is now open to all members of the armed forces, Department of Defense personnel, veterans, and their relatives. It has about 13 million members and over $165 billion in assets.

Ebony Huerta Wells has over 25 years of writing and media experience. She was a former business journalist with a major newspaper and worked for other niche publications.

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