A significant legal action has emerged in Charlotte, North Carolina, targeting the nation's largest credit union for alleged discriminatory lending practices. After CNN announced the findings of their investigation into their lending practices, Navy Federal Credit Union is now at the center of this class-action lawsuit led by Attorney Ben Crump, accusing the institution of racial bias in its loan approvals, particularly affecting qualified African American applicants. The examination by CNN revealed that credit-worthy Black applicants seeking home loans were twice as likely to face rejection compared to their white counterparts.
For Jerome Singletary, a U.S. Army veteran, and his family, the pursuit of homeownership has been challenging.
Since relocating to Charlotte in 2021, the Singletarys have encountered ongoing difficulties securing affordable housing. Jerome shared their experience of moving from an expensive extended-stay accommodation to applying for a VA home loan through Navy Federal; however, the credit union denied the loan due to issues with the Singletary's credit. This denial led them to a distressing situation, forcing them into a shelter.
CNN's analysis of federal consumer protection data further confirmed the troubling trend at Navy Federal Credit Union, revealing that Black loan applicants were denied home loans twice as often as white applicants with similar credit histories and incomes. When questioned if he felt race played a role in the denial, Singletary expressed his belief that being white might have resulted in approval, highlighting the perceived racial bias in the process.
Despite Singletary's efforts as a working disabled veteran, including reapplying for the loan, he faced repeated denials. CNN's research uncovered another startling fact: Navy Federal approved more white applicants earning under $62,000 annually than Black applicants earning over $140,000.
Curtis Drafton, founder of the U.S. Veterans Hall of Fame, brought attention to this issue within the veteran community. A survey by the organization revealed that within two days, 21 veterans reported loan denials from Navy Federal, with no clear rationale following standard protocols. Drafton pointed out the broader implications of such disparities, including increased veteran homelessness, as veterans lose faith in financial institutions and face extreme financial hardships.
Drafton emphasized the urgent need for Navy Federal to transform from a barrier to a facilitator in the journey toward homeownership, suggesting the need to implement programs to guide veterans through the loan process.
In response to these allegations, Navy Federal Credit Union issued a statement emphasizing the gravity of the claims. The credit union has engaged Debo P. Adegbile, a prominent civil rights attorney and former commissioner on the United States Commission on Civil Rights, to review its mortgage lending policies and practices to enhance access to homeownership.
Meanwhile, Mr. Singletary remains hopeful about the future. He and his wife are actively participating in first-time homebuyer classes and working on credit repair, with plans to reapply for a Navy Federal loan.
The legal battle against Navy Federal Credit Union continues to unfold. The lawsuit cites instances of highly qualified applicants – one from Washington state and another from Florida – being denied home loans despite substantial incomes, minimal debt, and high credit scores, further fueling the claims of discriminatory lending practices.
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