What is it, why is it important
Black Players for Change formed in response to nationwide protests following the 2020 police killing of George Floyd. An independent organization of over 170 Major League Soccer players, coaches and staff, the BPC aims to “close the racial equality gap”. in American society.
On Thursday, MLS announced one of the organization’s biggest wins to date, a $25 million loan from a syndicate of black banks. The historic agreement will help close this racial economic gap in a way never before seen in American professional sports.
A tangible contribution – and one step of many – to closing the racial wealth gap in the United States.
– Major League Soccer (@MLS) March 10, 2022
The loan was facilitated by the non-profit National Black Bank Foundation (NBFF) in conjunction with Black Players for Change, the Black Bank Fund and Bernice A. King, daughter of King Center CEO Dr. Martin Luther King Jr. and member of the board of directors of the NBBF. King, who has been the hitter for the Golden Spike in Atlanta United games, put the deal in motion in February 2021.
“This transformative partnership between MLS and black banks across the country is proof of what can happen when leaders bravely stand up and decide to be part of equitable change,” said Bernice King. “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 across our country. a significant moment in the ongoing struggle for civil rights in the United States.
This is a historic moment – in sports history, in civil rights history, in American history.
— UNITY National Bank (@UNITYNationalB1) March 10, 2022
What does the MLS Black Banks loan do?
So what exactly is this loan for? What’s the point of taking out a $25 million loan in a league that requires 10 times the expansion fee? A broad look at the numbers explains why it’s needed and how it will affect black communities.
Why MLS Black Bank Loan is needed
In 2020, the Federal Reserve said the median wealth gap between black and white families was $161,000. This means that the typical white family had $184,000 in wealth while the typical black family had $23,000 in wealth. (Note: When we talk about white families, we are referring to non-Spanish speaking families.)
Additionally, 82% of black families have less wealth than white families. This number is important because this number was 85% in 1963, at the height of the civil rights movement, which means that little progress has been made in almost 60 years. Additionally, black families are about twice as likely to be denied loans as white families, and about half of black families are unbanked or underbanked, compared to 15% for white families. When you add in expensive banking alternatives like check cashing services, payday loans, money orders and prepaid credit cards, it can cost Black families up to $40,000 over a lifetime.
It doesn’t take a math whiz to realize that these numbers shouldn’t be so far apart, and that’s only scratching the surface. Additionally, the racial economic divide has been exacerbated by Covid-19. You would have to be a racist not to be worried about this huge wealth gap.
We don’t have the time or the expertise to go through all the reasons for this gap, but centuries of racist economic policies (think educational opportunities, redlining and good old-fashioned racism) have contributed to this significant disparity.
Ashley Bell of the National Blank Bank Foundation tells me what this means for the black community https://t.co/BJZRJ3GgGP
— Drake Hills (@LiveLifeDrake) March 10, 2022
How the MLS Black Bank loan will affect black communities
The racial economic gap makes investing in Black communities all the more important, and this MLS Black Banks loan will do just that.
The loan was extended to seven black banks across the country, including in Atlanta, New York, Birmingham, Alabama, Milwaukee, Durham, North Carolina and Houston. Through fixed fees and interest rates, banks’ capital cushion will increase, allowing banks to provide more credit for home or business loans in Black communities. Essentially, for every dollar these banks make from this deal, they can reinvest $10 back into Black businesses and families.
This means Major League Soccer’s $25 million loan could have an economic impact of $250 million.
“By reaching agreements like the one we are celebrating here today, we are directly addressing and establishing a platform to overcome the undervaluation of black participation in the economic ecosystem,” said Quincy Amarikwa, founder of BPC. and 11-year MLS veteran. “Creating opportunities like this demonstrates that we are headed in the right direction. We welcome the opportunity to build on this positive momentum in partnership with MLS and others.”
I’m so proud to be an MLS owner of LAFC! MLS officially announced a new partnership exclusively with black banks allowing banks to create additional lines of credit for lending in communities of color. This is a significant moment in sports history and in American history. pic.twitter.com/orKiEDyTW1
While some prematurely declared racism in America in the wake of the 1960s civil rights movement and others said it ended when Barack Obama was elected president in 2008, a real look at the country shows the opposite. The racial economic gap is just one of the many ways racism continues to impact people of color, especially in black communities.
While this deal won’t erase racism and its myriad issues, it is a historic investment in black communities unparalleled in sports (the Atlanta Hawks have a similar deal through the NBBF, but it’s is the first league-wide agreement).
Since 2020, Major League Soccer has been committed to fighting racism and championing social justice. By bringing Black Players for Change to the table, the league was able to effect positive change both on and off the pitch.