REPORT: Home loans denied at twice rate for Black applicants

[Consumer Reports]   Dear Friend, The revelation last week that the nation’s largest credit union denied home loans for Black applicants more than twice as often as White applicants with the same financial profile underscores the need for clear rules to ensure computer algorithms assessing your creditworthiness don’t discriminate. Data from the Consumer Financial Protection Bureau (CFPB) shows that Navy Federal Credit Union, which serves active duty military and veterans, approved 75 percent of all mortgages to White borrowers – but less than 50 percent of all Black borrowers who applied for the same type of loan. This was the widest gap observed among the top 50 lenders who originated mortgages last year. And Navy Federal also approved Latino borrowers at significantly lower rates than White borrowers. Lenders are increasingly using computer algorithms that can contain hidden bias to help make some of their decisions on who gets a loan and who doesn’t – and it’s time for our consumer watchdog to do more to ensure all consumers are treated fairly when they seek a loan. [Join us in calling on the CFPB to investigate Navy Federal, and to set clear guidance for lenders on the fair and responsible use of computer algorithms.](  [Sign the Petition](  While lenders are required to exclude protected class traits of applicants – such as race – from decision-making to avoid discrimination, historical and systemic biases still seep into these algorithms. Lenders can introduce bias by using data points in their computer programs that are proxies for race. And they can avoid accountability by obscuring their use of algorithms, or failing to put in place safeguards to mitigate bias – resulting in consumers being denied opportunities that they deserve. Our consumer watchdog took an important step by forcing lenders who use algorithms to give notice to consumers whose loan applications were denied, and what led to that decision. But the technology now exists for less discriminatory loan underwriting models, and lenders should be required to use them. Urge the CFPB to do more to hold lenders accountable, [and ensure no consumer who deserves a loan is denied because of a biased computer algorithm!](  [Sign the Petition](  Help us spread the word by sharing this email with friends and family so they can join you in sending a strong message on this important issue. Thank you, Angel Han Consumer Reports [Unsubscribe from Consumer Reports action alerts.]( © 2022 Consumer Reports, 101 Truman Avenue, Yonkers, NY, 10703 [Contact Consumer Reports](