Senators call for agency review of Navy Federal Credit Union

Senate Banking Committee Chairman Sherrod Brown (D-Ohio) along with nine senators yesterday called on the Consumer Financial Protection Bureau and Department of Housing and Urban Development to review Navy Federal Credit Union’s mortgage lending practices following media reports that it denied mortgages to Black and Hispanic applicants at high rates.

In a letter, the senators pointed to a CNN report that found that the credit union was twice as likely to deny a loan from a Black applicant as a white applicant, and that Hispanic applicants were around 85% more likely to be denied compared to white applicants. They urged the agencies to “thoroughly review” Navy Federal’s mortgage lending practices and compliance with federal fair housing and fair lending laws and regulations.

“While it is appropriate for a lender to deny a mortgage application when the loan will not be sustainable for the borrower, those decisions are made based on a borrower’s financial ability to repay the loan,” the senators said. “It should go without saying that a person’s race, or any other protected characteristic, should never be a factor.”

In related news, a group of 40 House lawmakers last week requested a meeting with Navy Federal CEO Mary McDuffie about what actions the credit union is taking to address the alleged bias in its lending practices. “Navy Federal should explain its increasingly widening racial lending gap and how more than half of the Black service members, veterans and their families who applied for a conventional mortgage in 2022 were rejected and denied homeownership and wealth-building opportunities,” they said.