Crump Files Lawsuit In Virginia Alleging NFCU Mortgage Bias

By Rosaland Ttyler
Associate Editor
New Journal and Guide

On Feb. 20, prominent civil rights attorney Ben Crump was among a team of attorneys who appeared at a news conference after filing a federal lawsuit against Virginia-headquartered Navy Federal Credit Union for disproportionately denying mortgages to Black applicants.

Court records show the lawsuit was filed in the U.S. District Court, Eastern District of Virginia. It alleges the denial rate for Blacks seeking mortgages was 52 percent in 2022, compared to a 23 percent denial rate for White applicants and a 44 percent denial rate for Hispanics.

The lawsuit alleges the Virginia-based company rejected about 3,700 Black applicants who applied for home loans in 2022. The denials not only blocked them from buying a home just as interest rates spiked but also forced people of color to seek loans that charged higher interest rates.

“As a result of race-based factors, Black and Hispanic borrowers have paid $765 million more in interest rates per year than White borrowers,” Crump said at the recent press conference, citing data from reports that were compiled by Navy Federal, the nation’s largest credit union.

According to his website, Crump filed the lawsuit with Attorney Adam Levitt, in Vienna, Va. The lawsuit was filed “on behalf of Black plaintiffs Laquita Oliver and Cherelle Jacob who sought home loans with defendant Navy Federal Credit Union. The lawsuit alleges that Oliver and Jacob’s denials for their home loans are due to Navy Federal’s discriminatory lending practices.”

Levitt, an attorney for the plaintiffs, said in a statement on Crump’s website, “We hope this legal action will stop racial lending discrimination in its tracks and require Navy Federal to right their wrongs.”

Levitt said, “Home ownership is recognized as the cornerstone of the American Dream. We will not sit by while that dream is denied to hard-working and deserving Americans based on discriminatory practices and algorithms.”

According to a CNN report in December 2023, ”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.”

“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 different variables – including income, debt-to-income ratio, property value, down payment percentage, and neighborhood characteristics – were the same,” CNN noted..

In a statement, Navy Federal spokesperson Bill Pearson defended the credit union’s lending practices.

“Navy Federal Credit Union is committed to equal and equitable lending practices and strict adherence to all fair lending laws,” Pearson said.

A spokesperson from Navy Federal said CNN’s analysis was not an accurate reflection of their lending practices because it did not account for other factors, such as credit score, cash in the bank, and relationship history with the lender.

According to a Feb. 16 CNN report, three members of the Congressional Black Caucus recently questioned Mary McDuffie, the CEO of Navy Federal Credit Union, for about an hour. CBC members “demanded answers in the wake of CNN’s reporting on racial disparities in the lender’s mortgage approvals.”

After the meeting,  Rep. Steven Horsford, a Nevada Democrat, said, “We’re trying to achieve the goal of closing the racial wealth gap in America. You cannot do that with practices like this that deny equal opportunity to homeownership.”

McDuffie declined to answer CNN’s questions as she entered and exited the closed-door meeting with Horsford, the chair of the Congressional Black Caucus; Rep. Emanuel Cleaver of Missouri, the ranking Democrat on the House Subcommittee on Housing and Insurance; and Rep. Sydney Kamlager-Dove of California.