House Democrats Request Hearing on Navy Federal Discrimination Allegations
CNN reported wide disparity of treatment between Whites and Blacks seeking mortgages
Democrats on the House Financial Services Committee are requesting that Chairman Rep. Patrick McHenry, R-N.C., hold a hearing on allegations that Navy Federal Credit Union discriminated against Black members seeking to purchase a home.
“A public hearing on this matter will not only shed light on the practices of Navy Federal Credit Union but will also serve as an opportunity to explore potential solutions and reforms that can be implemented to ensure fair and equitable lending practices by all lenders,” the committee members, led by ranking Democratic Rep. Maxine Waters of California wrote in a letter to McHenry this week.
CNN reported in December that Navy Federal, the nation’s largest credit union, approved 75% of White borrowers who applied for a conventional home purchase mortgage in 2022, compared with less than 50% of Black borrowers who applied for the same type of loan. The gap between White and Black borrowers was the widest of any of the 50 lenders that originated the most mortgage loans in 2022.
Responding to the allegations in December, Navy Federal released a statement that said, in part, “We take our responsibility to fair lending very seriously and are closely examining the allegations in the recent CNN article. The statistics in the article do not appear to have considered several key credit criteria that all financial institutions, including Navy Federal, rely on to assess mortgage applications.”
Navy Federal said it had retained Debo Adegbile, a former commissioner on the U.S. Commission on Civil Rights, to assess the institution’s lending policies and to make recommendations about how the credit union could expand home ownership.
That apparently is not good enough for Democrats on the Financial Services Committee. In their letter they asked McHenry to have Mary McDuffie, Navy Federal’s president/CEO, testify to explain the disparities.
The Democrats also took a shot at McHenry, who disbanded the subcommittee’s diversity subcommittee when Republicans took control of the House. At the time McHenry said that all subcommittees would have diversity issues on their agenda.
“Despite pledging to keep diversity and inclusion as an area of focus on the committee’s agenda and make it a component of every sub-panel when you disbanded the Subcommittee on Diversity and Inclusion, the Committee has yet to have a hearing focused on these issues since you stepped into leadership,” they wrote.
On the Senate side, Democrats, including Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, wrote a letter asking the Biden Administration to investigate the credit union’s lending practices.
“Consumers often turn to credit unions, which are financial institutions built on the principle of member-ownership, for their family’s biggest financial decisions,” the Democrats wrote in a letter to Department of Housing and Urban Development Sec. Marcia Fudge and Consumer Financial Protection Bureau Director Rohit Chopra. “Members want to trust their credit unions. This trust is lost if they are not confident whether they are being fairly evaluated.”