Charlotte veteran denied Navy Federal VA home loan as credit union faces class-action lawsuit
CHARLOTTE, N.C. (QUEEN CITY NEWS) — Plaintiffs have filed a class-action lawsuit against the largest credit union in America alleging discriminatory practices.
Navy Federal Credit Union is accused of discriminating against Black borrowers. An analysis by CNN found Black borrowers were twice as likely to be denied home loans.
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Homeownership is part of the American dream, but for U.S. Army veteran Jerome Singletary and his family, it’s a dream deferred. They moved to Charlotte in 2021 and have struggled to find and keep affordable housing since.
“The extended-stay got a little pricey for us. So, then we fill out an application with Navy Federal for a VA home loan,” Singletary said. “We were denied because of our credit, and it was just a little hard for us. Things got really too complicated. So, we were forced to move into the shelter.”
An analysis of federal consumer protection data by CNN revealed Navy Federal Credit Union denied Black applicants home loans twice as often as white applicants with the same credit history and income.
“Do you feel that if you were white, you would have been approved?” reporter Kaci Jones asked Singletary. “Unfortunately, yes, I do. It’s sad to say, but yes,” he answered.
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Singletary says he found ways to work as a disabled vet and reapplied for the same loan but was still denied.
Research compiled by CNN revealed Navy Federal approved a higher percentage of applications from white borrowers making less than $62,000 a year than it did Black borrowers making $140,000 or more.
Curtis Drafton, founder of the U.S. Veterans Hall of Fame says his organization ran a survey to ask who had been denied for the loans.
“Within 48 hours, 21 veterans said, ‘Yes, I was denied by them,’” Drafton said. “Then when they looked for the response on why they were there, no there was no applicable response according to protocol on why they should have been denied.”
Drafton says the disparity of denials leads to more veteran homelessness.
“They get frustrated with the system. They don’t trust the credit unions,” Drafton said. “And they say, you know what? It’s easier for me to go out here and stand on a corner and ask for money. I can live off 20 bucks a day sleeping in a tent.”
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“Veteran homelessness right now, in Charlotte over the last three years has doubled the national average. It’s gone up 35 p on veteran homelessness to the sort of where it went from 60,000 up to 95,000. So when we look at that, we literally have to look at this thing as though it’s an epidemic. Right. But we know the root cause.”
He says Navy Federal should be a bridge not a barrier to homeownership.
“Create fast tracked programs so they don’t deny the veteran, they say, well, this could be fixed, or your credit score could come up and they have programing to guide the veteran into the home loan,” Drafton said.
Navy Federal Credit Union issued a statement saying in part “We treat the recent allegations very seriously, and we have retained a leading civil rights lawyer, Debo P. Adegbile, former commissioner on the United States Commission on Civil Rights, to assess our mortgage lending policies and practices and make recommendations to drive further access to home ownership.”
Singletary hopes this dream temporarily deferred, won’t be a permanent dream denied.
“We can turn our key. We don’t have to worry about anything else. Our mind is clear and focused on our families,” Singletary said. “If Navy Federal can do that for us, I feel like we will be in a much better place physically, mentally and emotionally, as well as spiritually.”
Singletary and his wife are now in first-time home buyer classes and working on repairing their credit. He plans to try again for another Navy Federal loan.
Two women are now suing the credit union for violating the Equal Credit Opportunity Act. According to the suit, one woman from Washington state and her husband together earn $200,000 a year, have no debt, and credit scores above 800, but were denied a home loan.
The suit claims another woman from Florida earns $100,000 a year and has very little debt and was also denied.
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