Racial Disparity in Mortgage Approvals: The Case of Navy Federal Credit Union

🔍Navy Federal Credit Union has the largest loan approval gap between black and white applicants among the top 50 lenders.

📉African-American mortgage applicants were significantly denied more than white applicants by Navy Federal.

💔The approval rate for white applicants with incomes less than $62,000 was higher than for black applicants earning $140,000.

📊Credit unions like Navy Federal are not subject to the same oversight for Community Reinvestment Act compliance as banks.

⚖️The focus should be on addressing the use of algorithms and AI in lending decisions for fair and unbiased outcomes.

What is the loan approval gap between black and white applicants at Navy Federal Credit Union?

—Navy Federal Credit Union has the largest loan approval gap between black and white applicants among the top 50 lenders.

How does the approval rate compare for African-American and white mortgage applicants?

—African-American mortgage applicants were significantly denied more than white applicants by Navy Federal Credit Union.

Were white applicants with lower incomes approved at a higher rate than black applicants with higher incomes?

—Yes, the approval rate for white applicants with incomes less than $62,000 was higher than for black applicants earning $140,000.

Is Navy Federal Credit Union subject to the same oversight for Community Reinvestment Act compliance as banks?

—No, credit unions like Navy Federal are not subject to the same oversight for Community Reinvestment Act compliance as banks.

What should be done to address biased lending practices?

—The focus should be on addressing the use of algorithms and AI in lending decisions for fair and unbiased outcomes.

00:00According to a recent CNN report, Navy Federal Credit Union, the nation's largest credit union, has come under scrutiny for its significant loan approval gap between black and white applicants.

05:36Navy Federal approved over 75% of white applicants for conventional home purchase mortgages in 2022 but denied African-American applicants at a higher rate.

08:39The approval rate for white applicants with incomes less than $62,000 was higher than for black applicants earning $140,000.

11:40Credit unions, like Navy Federal, are not subject to the same oversight for Community Reinvestment Act compliance as banks.

13:16Addressing the use of algorithms and AI in lending decisions is crucial to ensure fair and unbiased outcomes.