Major League Soccer strikes ‘historic’ $25 million deal with Black-owned banks
Deal is part of MLS' effort to help close the Black-white economic gap
A major sports league has announced it will borrow $25 million from Black-owned banks to help close the Black-white economic gap in what it calls an “historic” agreement.
Major League Soccer said the partnership, facilitated with the National Black Bank Foundation, marks the first time any sports league has partnered exclusively with Black-owned banks in a major commercial transaction.
“As a league, we continue to increase our initiatives in support of racial justice,” MLS Commissioner Don Garber said in a news release announcing the partnership.
“In order to make a genuine impact, economic justice must be part of the equation. This transaction with a syndicate of community-focused Black banks is an important measure, and it is our hope this will raise awareness of the importance of Black-owned banks and their impact on the economy,” Garber added.
The Federal Reserve notes that wealth inequality grew between 1989 and 2016, the latest year comparative statistics were available, with Black and brown people struggling the most.
“We find that families who are thriving tend to be white, college-educated, and/or older. We find that families who are struggling tend to have one or more of these characteristics: black or Hispanic; no four-year college degree; and/or younger,” according to a Federal Reserve report that examined what wealth inequality in America looks like.
MLS’ effort hopes to make a difference. The loan will allow Black-owned banks to gain additional capital through interest and fees. The banks can then use that extra money to lend to small businesses and make other loans in the communities they serve.
The Federal Reserve also said that Black households tend to be “unbanked” or “underbanked” more than any other demographic group. Unbanked means these Black households don’t have a bank account, and underbanked means they use alternative and more expensive financial services like payday lenders, the Federal Reserve report noted.
“I brought MLS and NBBF together because I saw an opportunity to create a partnership with the power to transform lives in Black communities and change hearts and minds throughout our nation,” Bernice A. King, King Center CEO and National Black Bank Foundation board member, said in the news release.
“This deal undoubtedly marks an important moment in the continuing struggle for civil rights in the United States,” she added.
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