Incident 618: Navy Federal Credit Union Faces Allegations of Racial Bias in Mortgage Approvals

Responded
Description: Navy Federal Credit Union, serving military members and veterans, faced allegations of racial bias in its mortgage approval process, which relies on automated underwriting technology. In 2022, data revealed significant disparities in loan approvals, with over 50% of Black applicants denied, compared to higher approval rates for white applicants.

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Incident Stats

Incident ID
618
Report Count
3
Incident Date
2023-12-14
Editors
Daniel Atherton
Applied Taxonomies
GMF, MIT

MIT Taxonomy Classifications

Machine-Classified
Taxonomy Details

Risk Subdomain

1.1. Unfair discrimination and misrepresentation

Risk Domain

  1. Discrimination and Toxicity

Entity

Human

Timing

Post-deployment

Intent

Intentional

The nation’s largest credit union rejected more than half its Black conventional mortgage applicants
cnn.com · 2023

The largest credit union in the US has the widest disparity in mortgage approval rates between White and Black borrowers of any major lender, a trend that reached new heights last year, a CNN analysis found.

Navy Federal Credit Union, which…

Lawmakers call on federal regulators to review Navy Federal over mortgage approval disparities, citing CNN investigation
cnn.com · 2024
Casey Tolan, Rene Marsh post-incident response

More than four dozen members of Congress signed on to two letters Thursday expressing concern about the lending practices of the nation's largest credit union, citing a CNN investigation into racial disparities in the lender's mortgage appr…

Senators call on HUD, CFPB to review mortgage approval gaps at Navy Federal
financialregnews.com · 2024
Dave Kovaleski post-incident response

A group of U.S. senators are calling on the Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB) to review the gap in mortgage approval rates between white applicants and Black and Hispanic a…

Variants

A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.
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