Class-Action Lawsuit Alleges: Navy Federal Credit Union, the largest credit union in the US, is facing a class-action lawsuit over alleged racial disparities in its mortgage lending practices. The lawsuit, filed in federal court in Virginia, follows an investigative report revealing significant racial gaps in Navy Federal’s mortgage approval rates.
The complaint alleges that the credit union discriminated against Black and Latino applicants, violating the Fair Housing Act of 1968 and the Equal Credit Opportunity Act. According to the lawsuit, Navy Federal had the widest disparity in conventional mortgage approval rates between White and Black borrowers among major lenders in 2022.
The complaint refers to Navy Federal’s claims of championing community and celebrating diversity, emphasizing the contradiction between those claims and alleged systematic discrimination in housing. The lawsuit seeks to represent a broad class of potential plaintiffs, including minority residential loan applicants from 2018 to the present who were denied, approved at higher interest rates, subject to less favorable terms compared to non-minority applicants, or experienced delayed processing.
US Rep. Maxine Waters, the ranking Democratic member of the House Financial Services Committee, expressed her dismay over the findings and called on Navy Federal to explain its practices to Congress and take immediate corrective action. Waters urged federal regulators, the Consumer Financial Protection Bureau, and National Credit Union Administration to investigate the matter promptly.
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The lawsuit provides the stories of two named plaintiffs, Cherelle Jacob and Laquita Oliver, whose mortgage applications were denied by Navy Federal. Both plaintiffs are described as having strong financial profiles and meeting the criteria for mortgage approval. The legal action seeks economic justice for Black and Latino borrowers allegedly denied their piece of the American Dream by Navy Federal.
Navy Federal, which lends to military servicemembers, defense personnel, veterans, and their families, defended its lending practices in a statement last week. The credit union emphasized its commitment to equal and equitable lending practices, with embedded measures such as employee training, fair lending statistical testing, third-party evaluations, and compliance reviews to ensure fairness.
Navy Federal spokesperson Bill Pearson stated that analysis did not accurately reflect the credit union’s practices as it did not consider major criteria required for mortgage loan approval, including credit score, available cash deposits, and relationship history with the lender. However, Navy Federal declined to release additional data about its loans that included borrowers’ credit scores or other variables.
Our Reader’s Queries
What are the risks of joining a class action lawsuit?
Participating in a class action lawsuit can be a potent means of seeking justice. However, there are certain risks involved in joining such a lawsuit. These risks include legal uncertainties, diminished personal control over the lawsuit, the likelihood of receiving lower individual compensation, and a lengthy and time-consuming legal process.
Who gets the most out of a class action lawsuit?
It’s a common misconception that class action settlements are distributed equally among all members of the class. In reality, the lead plaintiffs tend to receive the largest portion of the settlement. This is because they often have the most severe injuries and damages. It’s important to understand that the distribution of funds in class action lawsuits is not a one-size-fits-all approach. Each case is unique and requires careful consideration of the individual circumstances.
What is a class action suit and why are they important?
In a class action, a group of people known as the class are represented by one or more plaintiffs who bring a lawsuit on their behalf. If the lawsuit is successful, any money awarded after legal fees are deducted is divided among all members of the class. This allows individuals to band together and seek justice as a collective group.
How do you beat a class action lawsuit?
To effectively defend against class actions, it’s crucial to gather all the facts and understand the legal issues at hand. Knowing the key players and hiring experts can also make a significant difference. It’s important to ensure that outside counsel fully comprehend the business and develop a litigation plan with the end goal in mind. Defining what “victory” means and getting a handle on the damages are also essential steps. By following these 20 best-practice tips, you can be well-prepared to defend against class actions.