Navy Federal class action claims credit union discriminates against minorities

Navy Federal class action lawsuit overview:

• Who: Plaintiffs Kristoffer Hicks and Masheeha Hopper filed a class action lawsuit against Navy Federal Credit Union.
• Why: Navy Federal’s alleged discrimination against minority applicants caused them and other class members to pay more for their homes.
• Where: The Navy Federal class action lawsuit was filed in Virginia federal court.

Navy Federal Credit Union denies mortgage applications to minority applicants that would have been approved for similarly situated white Americans, according to a Navy Federal class action lawsuit filed Dec. 28 in Virginia federal court.

Plaintiffs Kristoffer Hicks and Masheeha Hopper are both African American members of Navy Federal Credit Union. They both claim Navy Federal discriminated against them based on race by denying their mortgage applications.

The Navy Federal class action lawsuit points to 2022 data showing the credit union denied 52 % of African American applicants, 44% of Latino applicants and 36% of Native American applicants but only 23% of white applicants.

“With homeownership serving as the traditional foundation of a stable, middle-class life, Navy Federal’s practices deny minority borrowers access to the American dream,” the Navy Federal class action lawsuit says. 

“Compounding these problems, Navy Federal’s customer base primarily consists of active-duty military, military families and veterans, meaning that when Navy Federal discriminates, it’s the current and former members of the armed forces – and their families – who are harmed.”

Plaintiffs say Navy Federal discrimination caused them to pay more for their homes

Hicks is an active-duty military member and had an annual income of roughly $90,000 when he applied for a Navy Federal home loan, according to the complaint. After his application was denied, he was able to find a loan through another lender but he says he pays more to live in a smaller home due to the Navy Federal discrimination he faced.

Hopper was eligible for a Navy Federal membership because her sister served in the U.S. Army, the Navy Federal class action explains. Between 2021 and 2023, she submitted applications with Navy Federal for a mortgage, to refinance her mortgage and a home equity line of credit but was denied each time despite having an annual income of about $86,000.

After Navy Federal denied her mortgage application in 2021, Hopper secured a loan from another lender that required her to pay $12,000 toward her down payment. If she had qualified for a Navy Federal home loan, she would not have needed a down payment, the complaint says.

Due to the Navy Federal discrimination they experienced, Hicks and Hopper say they had fewer home options and had to pay more for their homes than they would have had their Navy Federal loan applications been approved.

The Navy Federal class action lawsuit asserts claims for violations of the Fair Housing Act and the Equal Credit Opportunity Act.

In 2022, a Navy Federal Credit Union member asked a New York federal judge not to dismiss a class action lawsuit over allegations the credit union failed to notify account holders that they would not be reimbursed for losses caused by Zelle fraud.

What do you think about the Navy Federal discrimination allegations? Join the discussion in the comments.

Hicks and Hopper are represented by Peter Silva, Hassan Zavareei, Andrea Gold, Wesley M. Griffith and Cort Carlson of Tycko & Zavareei LLP.

The Navy Federal discrimination class action lawsuit is Kristoffer Hicks, et al. v. Navy Federal Credit Union, et al., Case No. 1:23-cv-01789, in the U.S. District Court for the Eastern District of Virginia.

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