Major League Soccer uses $25 million loan with Black Bank Syndicate

Major League Soccer today announced what is being hailed as a historic $25 million loan to a consortium of black banks to encourage more investment in black-owned businesses and communities.

It is the first time that a professional sports league has participated in a major commercial transaction involving only black banks and is supported by the non-profit National Black Bank Foundation (NBBF).

The move, one of several by MLS to address inequality issues over the past two years, is prompted by a series of numbers. According to the NBBF, there are currently only 21 black-owned banks in the US, down from 36 a decade ago. Collectively, these banks control $4.8 billion, which is less than 1% of the nation’s banking assets, and restrict the flow of capital to black communities. At the same time, studies show that about half of the country’s black families have little or no bank accounts, compared to 15% of white families.

The loan aims to expand black Americans’ ability to access credit and grow their wealth by creating borrowing capacity for home equity and small business loans.

According to Zillow Black applicants were denied a mortgage at a rate 84% higher than white applicants in 2020, an increase of 10 percentage points since 2019. Lack of access to essential financial services has forced black households to rely on alternatives such as check cashing services and payday loans, money orders and Prepaid credit cards with high interest rates and fees.

MLS will work with the National Black Bank Foundation, 100 Black Men of America, the National Coalition of 100 Black Women and Black Players for Change to “educate their constituents and members about economic empowerment programs,” according to an announcement.

The syndication team brokering the deal includes Birmingham-based Alamerica Bank and Atlanta-based Citizens Trust Bank.

MLS Commissioner Don Garber said the partnership will “raise awareness of the importance of black-owned banks and their impact on the economy.”

NBBF co-founder Ashley Bell said the announcement “raised the bar for American businesses.”

“As other leagues and major corporations follow the MLS model, the lives of black families across the country will change for the better because their local black bank will have the capital resources to approve historical numbers of home and small business loans,” he said Bell.